ITEM 14
EXHIBIT 10.6
[EXECUTION COPY]
================================================================================
CREDIT AGREEMENT
Dated as of February 9, 1996
among
MUEHLTEIN HOLDING CORPORATION,
as Guarantor
X. XXXXXXXXXX & CO., INC.,
PEGASUS POLYMERS INTERNATIONAL INC.,
XXXXXXXXXX INTERNATIONAL, LTD. and
X. XXXXXXXXXX & CO. (CANADA) LIMITED,
as Borrowers
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
CITICORP USA, INC.,
as Agent
and
CITIBANK CANADA,
as Canadian Agent
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms......................................... 1
1.02. Computation of Time Periods................................... 51
1.03. Accounting Terms.............................................. 51
1.04. Other Definitional Provisions................................. 51
1.05. Other Terms................................................... 52
1.06. Payments by the Borrowers..................................... 52
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01. The Revolving Credit Facility................................. 52
2.02. Letters of Credit............................................. 58
2.03. Evidence of Indebtedness...................................... 66
2.04. Authorized Officers and Agents................................ 66
ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01. Prepayments; Reductions in and Reallocations
of Revolving Credit Commitments.......................... 67
3.02. Payments...................................................... 70
3.03. Taxes......................................................... 76
3.04. Increased Capital............................................. 80
3.05. Cash Management and Cash Collateral Accounts.................. 81
3.06. Right to Remove Affected Lender............................... 87
ARTICLE IV
INTEREST AND FEES
4.01. Interest on the Loans and Other Obligations................... 88
4.02. Special Provisions Governing Fixed Rate Loans................. 91
4.03. Fees.......................................................... 95
-i-
Page
----
ARTICLE V
CONDITIONS TO LOANS AND LETTERS OF CREDIT
5.01. Conditions Precedent to the Initial Loans and
Letters of Credit........................................ 97
5.02. Conditions Precedent to All Subsequent Revolving
Loans, Swing Loans and Letters of Credit.................100
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01. Representations and Warranties of the Borrower................102
ARTICLE VII
REPORTING COVENANTS
7.01. Financial Statements..........................................115
7.02. Events of Default.............................................117
7.03. Lawsuits......................................................117
7.04. Insurance.....................................................117
7.05. Borrowing Base Certificate....................................118
7.06. ERISA Notices.................................................118
7.07. Environmental Notices.........................................120
7.08. Labor Matters.................................................121
7.09. Public Filings and Reports....................................121
7.10. Notices under Acquisition Agreement...........................121
7.11. Other Information.............................................122
ARTICLE VIII
AFFIRMATIVE COVENANTS
8.01. Corporate Existence, Etc......................................122
8.02. Corporate Powers; Conduct of Business, Etc....................122
8.03. Compliance with Laws, Etc.....................................122
8.04. Payment of Taxes and Claims; Tax Consolidation................122
8.05. Insurance.....................................................123
8.06. Inspection of Property; Books and Records;
Discussions.............................................124
8.07. [Intentionally omitted].......................................124
8.08. ERISA Compliance..............................................125
8.09. Foreign Employee Benefit Plan Compliance......................125
8.10. Maintenance of Property.......................................125
8.11. Further Assurances; Additional Collateral.....................125
8.12. Landlord and Bailee Waivers...................................126
8.13. Environmental Compliance......................................127
8.14. Interest Rate Contracts.......................................127
-ii-
Page
----
ARTICLE IX
NEGATIVE COVENANTS
9.01. Indebtedness..................................................128
9.02. Sales of Assets...............................................129
9.03. Liens.........................................................130
9.04. Investments...................................................131
9.05. Accommodation Obligations.....................................132
9.06. Restricted Junior Payments....................................133
9.07. Conduct of Business; Subsidiaries; Acquisitions...............134
9.08. Transactions with Shareholders and Affiliates.................135
9.09. Restriction on Fundamental Changes............................135
9.10. Sales and Leasebacks; Operating Leases........................136
9.11. Margin Regulations; Securities Laws...........................136
9.12. ERISA and Certain Employment Matters..........................136
9.13. Issuance or Sale of Capital Stock.............................137
9.14. Constituent Documents.........................................137
9.15. Fiscal Year...................................................138
9.16. Cancellation of Debt; Prepayment..............................138
9.17. Environmental Matters.........................................138
9.18. Cash Management...............................................138
9.19. [Intentionally Omitted].......................................139
9.20. No New Restrictions on Subsidiary Dividends...................139
ARTICLE X
FINANCIAL COVENANTS
10.01. Minimum Consolidated Tangible Net Worth......................139
10.02. Minimum Fixed Charge Coverage Ratio..........................140
10.03. Maximum Capital Expenditures.................................140
ARTICLE XI
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.01. Events of Default............................................140
11.02. Rights and Remedies..........................................144
11.03. Cash Collateral..............................................146
11.04. License for Use of Software and Other
Intellectual Property....................................147
ARTICLE XII
THE AGENT AND THE CANADIAN AGENT
12.01. Appointment..................................................147
12.02. Nature of Duties.............................................149
12.03. Rights, Exculpation, Etc.....................................149
12.04. Reliance.....................................................150
12.05. Indemnification..............................................150
-iii-
Page
----
12.06. Citicorp and Citibank Canada Individually....................151
12.07. Successor Agents; Resignation of Agents......................152
12.08. Relations Among Lenders......................................153
12.09. Concerning the Collateral and the Loan
Documents................................................153
ARTICLE XIII
MISCELLANEOUS
13.01. Assignments..................................................157
13.02. Expenses.....................................................161
13.03. Indemnity....................................................162
13.04. Change in Accounting Principles..............................164
13.05. Setoff.......................................................164
13.06. Ratable Sharing..............................................165
13.07. Amendments and Waivers.......................................166
13.08. Notices......................................................167
13.09. Survival of Warranties and Agreements........................168
13.10. Failure or Indulgence Not Waiver; Remedies
Cumulative...............................................169
13.11. Marshalling; Payments Set Aside..............................169
13.12. Severability.................................................169
13.13. Headings.....................................................169
13.14. Governing Law................................................169
13.15. Intercreditor Agreement......................................169
13.16. Successors and Assigns.......................................170
13.17. Certain Consents and Waivers.................................170
13.18. Counterparts; Effectiveness; Inconsistencies.................171
13.19. Limitation on Agreements.....................................171
13.20. Confidentiality..............................................172
13.21. Judgment Currency............................................172
13.22. Entire Agreement.............................................173
-iv-
EXHIBITS
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Borrower Guaranty
Exhibit C -- Form of Borrower Pledge Agreement
Exhibit D -- Form of Borrower Security Agreement
Exhibit E -- Form of Borrowing Base Certificate
Exhibit F-1 -- Form of Collateral Access Agreement
(Landlord)
Exhibit F-2 -- Form of Collateral Access Agreement (Bailee)
Exhibit G -- Form of Collection Account Agreement
Exhibit H -- Form of Company Trademark Security Agreement
Exhibit I -- Form of Holdings Guaranty
Exhibit J -- Form of Holdings Pledge Agreement
Exhibit K -- Form of Holdings Security Agreement
Exhibit L-1 -- Form of Notice of Borrowing (U.S. Facility)
Exhibit L-2 -- Form of Notice of Borrowing (Multicurrency
Facility)
Exhibit L-3 -- Form of Notice of Borrowing (Canadian
Facility)
Exhibit M -- Form of Notice of Continuation/Conversion
Exhibit N-1 -- Form of Notice of Letter of Credit Issuance
(U.S. Facility)
Exhibit N-2 -- Form of Notice of Letter of Credit Issuance
(Canadian Facility)
Exhibit O-1 -- Form of Notice of Withdrawal (Multicurrency
Facility)
Exhibit O-2 -- Form of Notice of Withdrawal (Canadian
Facility)
Exhibit P -- Form of Officer's Certificate
Exhibit Q -- Form of Subsidiary Guaranty
Exhibit R -- Form of Subsidiary Security Agreement
Exhibit S-1 -- Form of U.S. Loan Note
Exhibit S-2 -- Form of Multicurrency Loan Note
Exhibit S-3 -- Form of Canadian Loan Note
Exhibit T -- List of Closing Documents
Exhibit U -- Form of Intercompany Note
Exhibit V -- Form of Collateral Assignment of Agency
Agreement
-v-
SCHEDULES
Schedule 1.01.1 -- Revolving Credit Commitments
Schedule 1.01.2 -- Payment Accounts
Schedule 1.01.3 -- Permitted Existing Accommodation
Obligations
Schedule 1.01.4 -- Permitted Existing Indebtedness
Schedule 1.01.5 -- Permitted Existing Investments
Schedule 1.01.6 -- Permitted Existing Liens
Schedule 6.01-C -- Authorized, Issued and Outstanding
Capital Stock; Subsidiaries
Schedule 6.01-D -- Conflicts with Contractual Obligations
and Requirements of Law
Schedule 6.01-E -- Governmental Consents
Schedule 6.01-I -- Litigation; Adverse Effects
Schedule 6.01-O -- Environmental Matters
Schedule 6.01-P -- ERISA Matters
Schedule 6.01-R -- Labor Matters
Schedule 6.01-U -- Patent, Trademark & Permits
Schedule 6.01-V -- Assets and Properties
Schedule 6.01-Y -- Transactions with Affiliates
Schedule 6.01-AA -- Collection Account Banks; Bank Accounts
-vi-
[EXECUTION COPY]
CREDIT AGREEMENT
This Credit Agreement dated as of February 9, 1996 (as amended,
supplemented or modified from time to time, this "Agree ment") is entered into
among Xxxxxxxxxx Holding Corporation, a Delaware corporation (with its
successors and permitted assigns, "Holdings"), X. Xxxxxxxxxx & Co., Inc., a New
York corporation and direct wholly-owned Subsidiary (as defined below) of
Holdings (with its successors and permitted assigns, the "Company"), Pegasus
Polymers International Inc., a Connecticut corporation and a direct wholly-owned
Subsidiary of the Company (with its successors and permitted assigns,
"Pegasus"), Xxxxxxxxxx International, Ltd., a New York corporation and a direct
wholly-owned Subsidiary of the Company (with its successors and permitted
assigns, "Xxxxxxxxxx International"), X. Xxxxxxxxxx & Co. (Canada) Limited, an
Ontario corporation and a direct wholly-owned Subsidiary of the Company (with
its successors and permitted assigns, the "Canadian Borrower"; and together with
the Company, Pegasus and Xxxxxxxxxx International, the "Borrowers"), the
institutions from time to time a party hereto as Lenders, whether by execution
of this Agreement or an Assignment and Acceptance, the institutions from time to
time party hereto as Issuing Banks, whether by execution of this Agreement or an
Assignment and Acceptance, Citicorp USA, Inc., a Delaware corporation
("Citicorp"), in its capacity as agent for the Lenders and the Issuing Banks
hereunder (with its successors in such capacity, the "Agent"), and Citibank
Canada, a Canadian chartered bank ("Citibank Canada"), in its capacity as agent
for the Canadian Lenders and the Canadian Issuing Banks hereunder (with its
successors in such capacity, the "Canadian Agent").
ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms. In addition to the terms defined above,
the following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined:
"Accommodation Obligation" means any Contractual Obligation,
contingent or otherwise, of one Person with respect to any Indebtedness of
another, if the primary purpose or intent thereof by the Person incurring the
Accommodation Obligation is to provide assurance to the obligee of such
Indebtedness of another that such Indebtedness will be paid or discharged, or
that any agreements relating thereto will be complied with, or
-2-
that the holders thereof will be protected (in whole or in part) against loss in
respect thereof including, without limitation, direct and indirect guarantees,
endorsements (except for collection or deposit in the ordinary course of
business), notes co-made or discounted, recourse agreements, take-or-pay
agreements, keep-well agreements, agreements to purchase or repurchase such
Indebtedness or any security therefor or to provide funds for the payment or
discharge thereof, agreements to maintain solvency, assets, level of income, or
other financial condition, and agreements to make payment other than for value
received. The amount of any Accommodation Obligation shall be equal to the
lesser of (i) the principal amount payable under such Accommodation Obligation
(if quantifiable), and (ii) the portion of the obligation so guaranteed or
otherwise supported.
"Acquisition Agreement" means the Stock Purchase Agreement dated as
of October 30, 1995, between Holdings, as buyer, and Xxxxxxxxxx Holding
Corporation, as seller, as amended by the first amendment thereto dated as of
November 20, 1995, and as such agreement may be further amended, supplemented or
otherwise modified from time to time.
"Acquisition Documents" means the Acquisition Agreement and all
other instruments, agreements and written Contractual Obligations entered into
in connection with the Acquisition Agreement and otherwise relating thereto,
including, without limitation, the Supply Agreements (as defined in the
Acquisition Agreement), the License Agreement (as defined in the Acquisition
Agreement), the Shareholders' Agreement, the ESOP, the Retirement Plan, the
Nonvoting Common Stock Purchase Agreement and the instruments, agreements and
written Contractual Obligations entered into in connection with the Nonvoting
Common Stock Purchase Agreement.
"Acquisition Loans" means the Loans made to the Borrowers the
proceeds of which are used for the purposes described in the first sentence of
Section 2.01(g).
"Affiliate" means, as to any specified Person, any other Person (i)
which, directly or indirectly, controls, is controlled by or is under common
control with, such specified Person and includes each officer or director or
general partner of such Person, (ii) which beneficially owns or holds 12.5% or
more of the Voting Stock (after giving effect to any Capital Stock which is
convertible into Voting Stock) of such specified Person or (iii) of which 12.5%
or more of the Voting Stock (after giving effect to any Capital Stock which is
convertible into Voting Stock) is beneficially owned or held by such specified
Person or a Subsidiary of such specified Person. For the purposes of this
definition, (i) "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person directly or
indirectly, whether through the ownership of Voting Stock, by contract or
otherwise
-3-
and (ii) Mobil Corporation shall not be deemed an Affiliate of the Company
solely as a result of its ownership interest in the Preferred Stock but only so
long as it has no representative on the board of directors of Holdings.
"Agent" is defined in the preamble and shall include Citicorp and
any successor Agent appointed pursuant to Section 12.07; provided, however,
references to the Agent in the provisions of this Agreement as they relate to
the Canadian Facility, the Canadian Borrower or any of the Canadian Borrower's
Property shall be deemed to be references to the Canadian Agent.
"Applicable Fixed Rate Margin" means, as of any date, two and
one-half percent (2.5%) per annum.
"Applicable Floating Rate Margin" means, as of any date, (i) one
percent (1.0%) per annum for Floating Rate Loans denominated in Dollars, (ii)
one percent (1.0%) per annum for Floating Rate Loans denominated in Canadian
Dollars and (iii) two and one-half percent (2.5%) per annum for Floating Rate
Loans denominated in any Optional Currency.
"Applicable Lending Office" means, with respect to a particular
Lender, its Fixed Rate Lending Office in respect of provisions relating to Fixed
Rate Loans and Multicurrency Loans, its Domestic Lending Office in respect of
provisions relating to Floating Rate Loans (other than Canadian Loans) and its
Canadian Lending Office in respect of provisions relating to Canadian Loans.
"Assignment and Acceptance" means an Assignment and Acceptance in
substantially the form of Exhibit A delivered to the Agent in connection with an
assignment of a Lender's interest under this Agreement in accordance with the
provisions of Section 13.01.
"Available Currency" means, with respect to any Loan, the currency
in which such Loan is denominated pursuant to the terms hereof.
"Availability Reserves" means (i) any reserve against the
availability under any Credit Facility agreed to between the Agent and the
applicable Borrower or Borrowers and (ii) as of ten (10) Business Days after the
date of notice of any determination thereof to the Borrowers by the Agent (which
notice shall include a reasonably detailed explanation thereof), in the exercise
of its sole discretion exercised in a commercially reasonable manner and in
accordance with the Agent's customary practices, such amounts as the Agent may
from time to time establish against availability under any Credit Facility in
order either (A) to preserve the value of, or the Agent's Lien on, the
Collateral or (B) to reflect future liabilities (including, without limitation,
liabilities in respect of Currency Agreements, Interest Rate
-4-
Contracts and cash management agreements and arrangements) of the Borrowers.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C. xx.xx. 101 et seq.), as amended from time to time, and any successor
statute.
"Benefit Plan" means a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which the Company
or any ERISA Affiliate is, or within the immediately preceding six (6) years
was, an "employer" as defined in Section 3(5) of ERISA.
"Borrower Guaranty" means the Guaranty dated as of the Closing Date
duly executed and delivered to the Agent and the Canadian Agent by each of the
Domestic Borrowers substantially in the form of Exhibit B, as the same may be
amended, supplemented or otherwise modified from time to time.
"Borrower Pledge Agreements" means (i) the Pledge Agreement dated as
of the Closing Date by and between the Company and the Agent and (ii) the Pledge
Agreement dated as of the Closing Date by and between Xxxxxxxxxx International
and the Agent, in each case in substantially the form of Exhibit C, as each of
the same may be amended, supplemented or otherwise modified from time to time.
"Borrowers" is defined in the preamble.
"Borrower Security Agreements" means (i) the Security Agreement
dated as of the Closing Date by and between the Company and the Agent, (ii) the
Security Agreement dated as of the Closing Date by and between Xxxxxxxxxx
International and the Agent and (iii) the Security Agreement dated as of the
Closing Date by and between Pegasus and the Agent, in each case in substantially
the form of Exhibit D, as each of the same may be amended, supplemented or
otherwise modified from time to time.
"Borrowing" means a borrowing consisting of Loans under the same
Credit Facility of the same type (i.e., Floating Rate Loans or Fixed Rate Loans)
made on the same day by the same Borrower.
"Borrowing Base Certificate" means a certificate, in substantially
the form of Exhibit E (with such modifications thereto as shall be agreed to by
the Agent in accordance with the terms of this Agreement), setting forth (i) for
the Domestic Borrowers, the Collateral Value of Eligible Supported Foreign
Receivables, Eligible Domestic Receivables, Eligible Investment Grade Foreign
Receivables, Eligible L/C Backed Foreign Receivables, Eligible Other Foreign
Receivables, Eligible Domestic Inventory, Eligible Foreign Inventory, Eligible
Aged Inventory and the amounts on deposit in the Cash Collateral
-5-
Accounts of the Domestic Borrowers and (ii) for the Canadian Borrower, the
Collateral Value of Eligible Domestic Receivables, Eligible Domestic Inventory,
Eligible Aged Inventory and the amounts on deposit in the Canadian Cash
Collection Account and the Canadian Cash Collateral Account.
"Business Activity Report" means (A) a Minnesota Business Activities
Report from the Minnesota Department of Revenue or (B) a New Jersey Business
Activity Report from the New Jersey Department of Revenue.
"Business Day" means a day, in the applicable local time, which is
not a Saturday or Sunday or a legal holiday and on which banks are not required
or permitted by law or other govern mental action to close (i) in New York, New
York, (ii) in the case of Fixed Rate Loans or Multicurrency Loans, in London,
England, (iii) in the case of the Canadian Loans, in Toronto, Canada, or (iv) in
the case of Letter of Credit transactions for a particular Issuing Bank, in the
place where its office for issuance or administration of the pertinent Letter of
Credit is located.
"Canadian Agent" is defined in the preamble and shall include
Citibank Canada and any successor Canadian Agent appointed pursuant to Section
12.07.
"Canadian Borrower" is defined in the preamble.
"Canadian Borrowing Base" means, as of any date of determination,
with respect to the Canadian Borrower, an amount equal to (i) up to eighty-five
percent (85%) of the Collateral Value of Eligible Domestic Receivables of such
Borrower at such time, plus (ii) the lesser of (A) the sum of (1) up to
fifty-five percent (55%) (seventy percent (70%) in the case of plastics) of the
Collateral Value of Eligible Domestic Inventory of such Borrower at such time,
plus (2) up to thirty percent (30%) of the Collateral Value of Eligible Aged
Inventory of such Borrower at such time and (B) such Borrower's Inventory
Sublimit in effect as of such date, plus (iii) up to one hundred percent (100%)
of the Collateral Value of the aggregate amount of all Cash Collateral deposited
by or on behalf of such Borrower and held from time to time in the Canadian Cash
Collection Account or the Canadian Cash Collateral Account. For purposes of this
definition, Eligible Domestic Receivables, Eligible Domestic Inventory and
Eligible Aged Inventory, as of any date of determination, shall be determined
after deduction of all Eligibility Reserves then effective with respect to such
items. As of ten (10) Business Days after the date of notice of any
determination thereof to the Canadian Borrower by the Agent (which notice shall
include a reasonably detailed explanation thereof), (x) any advance rate
specified above may be reduced by the Agent in its sole discretion so long as
such adjustment is made in accordance with the Agent's customary practices and
(y) any advance rate so
-6-
reduced may be increased by the Agent in its sole discretion (but not in excess
of the percentages set forth above which shall require the consent of all
Lenders in accordance with Section 13.07(b)(ii)) so long as such adjustment is
made in accordance with the Agent's customary practices.
"Canadian Cash Collateral Account" means account number 2012-176018
maintained with Citibank Canada in Toronto, Ontario (i) into which proceeds of
Collateral (in Dollars) of the Canadian Borrower shall be deposited and (ii)
from which, subject to the provisions of Section 3.05, funds will be transferred
(A) to the Dollar Disbursement Accounts of the Canadian Borrower or (B) to the
Canadian Cash Collection Account (after conversion of such funds from Dollars to
Canadian Dollars).
"Canadian Cash Collection Account" means account number 2012-176026
maintained with Citibank Canada in Toronto, Ontario (i) into which (A) proceeds
of Collateral (in Canadian Dollars) of the Canadian Borrower shall be deposited
and (B) subject to the provisions of Section 3.05, funds will be transferred
from the Canadian Cash Collateral Account (after conversion of such funds from
Dollars to Canadian Dollars) and (ii) from which, subject to the provisions of
Section 3.05, funds will be (A) transferred to the Canadian Dollar Disbursement
Accounts of the Canadian Borrower or (B) applied to the Obligations of the
Canadian Borrower.
"Canadian Commitment" means, as to each Canadian Lender, the
Commitment of such Canadian Lender to make Canadian Loans to, and participate in
Letters of Credit Issued for the account of, the Canadian Borrower in the
aggregate principal amount outstanding not to exceed the amount on the Closing
Date set forth opposite such Canadian Lender's name on Schedule 1.01.1 under the
caption "Canadian Commitment", as such amount may be reduced or modified
pursuant to this Agreement; provided, however, at no time shall the aggregate
Canadian Commitments of all Canadian Lenders exceed the Dollar Equivalent in
Canadian Dollars of $10,000,000 less any permanent reduction made pursuant to
Section 3.01.
"Canadian Dollars" means the lawful money of Canada.
"Canadian Facility" means the facility provided by the Canadian
Lenders to make Canadian Loans to, and to Issue Letters of Credit for the
account of, the Canadian Borrower in accordance with the terms and conditions
contained in this Agreement.
"Canadian Indemnitee" is defined in Section 13.03.
"Canadian Issuing Banks" means Citibank Canada and each other
Canadian Lender (or Affiliate of a Canadian Lender) approved by the Canadian
Agent and the Canadian Borrower who has agreed to become a Canadian Issuing Bank
for the purpose of
-7-
issuing Letters of Credit under the Canadian Facility pursuant to Section 2.02.
"Canadian Lenders" means the Lenders designated as such on Schedule
1.01.1 under the caption "Canadian Commitment" and each other institution which
is party hereto as a Canadian Lender pursuant to an Assignment and Acceptance.
"Canadian Lending Office" means, with respect to any Canadian
Lender, such Lender's office, located in Canada, specified as the "Canadian
Lending Office" under its name on the signature pages hereof or in the
Assignment and Acceptance by which it became a Lender or such other Canadian
office of such Lender as it may from time to time specify by written notice to
the Canadian Borrower and the Agent.
"Canadian Loan" is defined in Section 2.01(a).
"Canadian Loan Note" means one or more notes made payable to the
Canadian Lenders evidencing the Canadian Borrower's Obligation to repay the
Canadian Loans.
"Canadian Prime Rate" means, for any period, a fluctuating interest
rate per annum in effect from time to time, which rate per annum shall at all
times be equal to the higher of:
(i) the rate of interest announced publicly by Citibank Canada in
Xxxxxxx, Xxxxxxx, from time to time, as Citibank Canada's prime rate for
determining rates of interest on commercial demand loans in Canadian
Dollars made by it in Canada; and
(ii) three-quarters of one percent (0.75%) per annum above the rate
for 30 day Canadian Dollar bankers' acceptances for Citibank Canada that
appears on the Reuters Screen CDOR Page at 10:00 a.m. (Toronto time) on
any date of determination.
"Canadian Swing Loan Bank" means Citibank Canada, in its individual
capacity or, in the event Citibank Canada is not the Canadian Agent, the
Canadian Agent (or any Affiliate of the Canadian Agent designated by the
Canadian Agent). The Canadian Swing Loan Bank may from time to time make in its
sole discretion Swing Loans under the Canadian Facility.
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether payable in cash or other Property or accrued as a
liability (but without duplication)) during such period that, in conformity with
GAAP, are required to be classified as capital expenditures; provided, however,
(i) Capital Expenditures shall include (A) that portion of Capital Leases which
is capitalized on the consolidated balance
-8-
sheet of the Company and its Subsidiaries and (B) expenditures for Equipment
which is purchased simultaneously with the trade-in of existing Equipment owned
by the Company or any of its Subsidiaries, to the extent the gross purchase
price of the purchased Equipment exceeds the book value of the Equipment being
traded in at such time; and (ii) Capital Expenditures shall exclude expenditures
made in connection with the replacement or restoration of Property, to the
extent reimbursed or financed from insurance or condemnation proceeds.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capital Stock", with respect to any Person, means any capital stock
of such Person, regardless of class or designation, and all warrants, options,
purchase rights, conversion or ex change rights, voting rights, calls or claims
of any character with respect thereto.
"Cash Collateral" means immediately available cash or Cash
Equivalents held by or on behalf of the Agent, any of the Issuing Banks or any
of the Lenders in any Cash Collateral Account or otherwise, as security for any
or all of the Obligations.
"Cash Collateral Accounts" means, collectively, the cash collateral
accounts set forth on Schedule 6.01-AA.
"Cash Equivalents" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations), which, at the time of acquisition, are rated A-1 (or
better) by Standard & Poor's Corporation (or its successors) or P-1 (or better)
by Xxxxx'x Investors Service, Inc. (or its successors); (iii) commercial paper
of United States and foreign banks and bank holding companies and their
subsidiaries and United States and foreign finance, commercial industrial or
utility companies which, at the time of acquisition, are rated A-1 (or better)
by Standard & Poor's Corporation (or its successors) or P-1 (or better) by
Xxxxx'x Investors Service, Inc. (or its successors); and (iv) marketable direct
obligations of any state of the United States of America or any political
subdivision of any such state given on the date of such investment the highest
credit rating by Xxxxx'x Investors Service, Inc. (or its successors) and
Standard & Poor's
-9-
Corporation (or its successors); provided, that the maturities of any such Cash
Equivalents referred to in clauses (i) through (iv) shall not exceed one year.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. xx.xx. 9601 et seq., any
amendments thereto, any successor statutes, and any regulations or legally
enforceable guidance promulgated thereunder.
"CERCLIS" is defined in Section 6.01(o).
"Change of Control" means (i) any change occurs in the direct or
indirect equity ownership or control of Holdings' Capital Stock resulting in (x)
Persons who control or own Holdings' Voting Stock on the Closing Date and their
respective Affiliates and (y) (A) officers of the Company and (B) members of the
Company's leadership committee, in each case who hold such positions as of the
Closing Date or who are appointed subsequent to the Closing Date in the ordinary
course of business and not in connection with any Change in Control arising
under any of the other clauses of this definition, collectively controlling or
owning less than 51% of Holdings' Voting Stock; (ii) (x) Persons who control or
own Holdings' Voting Stock on the Closing Date and their respective Affiliates
and (y) (A) officers of the Company and (B) members of the Company's leadership
committee, in each case who hold such positions as of the Closing Date or who
are appointed subsequent to the Closing Date in the ordinary course of business
and not in connection with any Change in Control arising under any of the other
clauses of this definition, shall cease to have the right to elect or designate
a majority of the board of directors of Holdings; (iii) a Person or entity or
group of Persons or entities acting in concert (other than, to the extent still
employed by the Company or its Subsidiaries, Persons that control or own
Holdings' Voting Stock on the Closing Date and that are not acting in concert
with Persons that did not control or own Holdings' Voting Stock on the Closing
Date), shall, as a result of a tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise, have become the beneficial owner
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) of securities of Holdings representing more than 20% of Holdings'
Voting Stock; (iv) four (4) members of the Company's leadership committee shall
have left the employ of the Company during any twelve month period (except for
reasons of death or disability), (v) the Company shall cease to own and control
100% of the outstanding Capital Stock of Pegasus, Xxxxxxxxxx International or
any other Subsidiary Guarantor; or (vi) Holdings shall cease to own and control
100% of the outstanding Capital Stock of the Company.
"Citibank" means Citibank, N.A., a national banking association.
-10-
"Citibank Canada" is defined in the preamble.
"Citicorp" is defined in the preamble.
"Claim" means any claim or demand, by any Person, of whatsoever kind
or nature for any alleged Liabilities and Costs, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute,
Permit, ordinance or regulation, common law or otherwise.
"Closing Date" means the initial Funding Date of the Loans.
"Closing List" is defined in Section 5.01(a)(i).
"Collateral" means all Property and interests in Prop erty now owned
or hereafter acquired by Holdings, the Borrowers or any of their respective
Subsidiaries upon which a Lien is granted under any of the Loan Documents,
provided, that the Collateral shall not include any Receivables sold pursuant to
the Permitted Receivables Financing Program (it being understood and agreed that
the proceeds of the initial sale thereunder shall constitute part of the
Collateral).
"Collateral Access Agreement" means (a) a landlord waiver (with a
copy of the relevant Lease attached) with respect to personal property located
at real property leased by the Company or its Subsidiaries, substantially in the
form of Exhibit F-1 (with such modifications as the Agent may approve in its
sole discretion) and (b) a bailee waiver with respect to personal property
maintained in a warehouse or with another bailee, substantially in the form of
Exhibit F-2 (with such modifications as the Agent may approve in its sole
discretion).
"Collateral Value" means (i) with respect to any Eligible
Receivable, the Dollar Equivalent of the unpaid face amount of such Receivable
(net of retainage and any other amounts deferred with respect thereto), (ii)
with respect to any item of Eligible Inventory, the Dollar Equivalent of the
value (determined at the lower of cost on a first-in, first-out basis and market
value) of such Inventory and (iii) with respect to Cash Collateral in any
Available Currency (other than Dollars), the Dollar Equivalent of the amount of
Cash Collateral in such Available Currency.
"Collection Account Agreement" means a collection account agreement
executed by a Collection Account Bank, the applicable Borrower or Borrowers, and
the Agent substantially in the form of Exhibit G (with such changes thereto
requested by the Collection Account Bank as may be acceptable to the Agent and
the applicable Borrower or Borrowers, as the case may be), as the same may be
amended, supplemented or otherwise modified from time
-11-
to time.
"Collection Account Bank" means each bank which has entered into
(or, in accordance with Section 8.11(a), will enter into) a Collection Account
Agreement or Standing Orders and which is identified as a Collection Account
Bank on Schedule 6.01-AA, as such schedule may be modified from time to time
pursuant to Section 7.11, at which proceeds of Collateral are deposited.
"Collection Accounts" means, collectively, the collection accounts
established at the Collection Account Banks which are (or, in accordance with
Section 8.11(a), will be) subject to a Collection Account Agreement or Standing
Orders.
"Commercial Letter of Credit" means any documentary letter of credit
Issued by an Issuing Bank pursuant to Section 2.02 for the account of a
Borrower, which is drawable upon presentation of documents evidencing the sale
or shipment of goods purchased by such Borrower in the ordinary course of its
business.
"Common Equity Notes" means (i) the promissory notes, substantially
in the form of Exhibit A to the Shareholders' Agreement issued to holders of
Common Stock pursuant to the Shareholders Agreement and (ii) the promissory
notes described in Section 11.3(a) of the ESOP issued to holders of Common Stock
pursuant to the ESOP.
"Common Stock" means the Common Stock, par value $0.01 per share, of
Holdings.
"Company Trademark Security Agreement" means the Trademark Security
Agreement dated as of the Closing Date by and between the Company and the Agent
substantially in the form of Exhibit H hereto, as the same may be amended,
supplemented or otherwise modified from time to time.
"Compliance Certificate" is defined in Section 7.01(c).
"Consolidated Cash Interest Expense" means, for any period, all as
determined in conformity with GAAP, (i) total interest expense and, after the
inception of the Permitted Receivables Financing Program, any discount
attributable to the payment of yield and any program, commitment, agency and
similar fees payable under the Permitted Receivables Financing Program, whether
paid or accrued (without duplication) (including the interest component of
Capital Lease obligations), of Holdings and its Subsidiaries on a consolidated
basis, including, without limitation, all recurring bank loan fees and
commissions, discounts and other fees and charges owed with respect to letters
of credit and net costs under Interest Rate Contracts, but excluding, however,
amortization of discount, interest paid in property other than cash or any other
interest expense not
-12-
payable in cash, minus (ii) any net payments received during such period under
Interest Rate Contracts.
"Consolidated Fixed Charges" means, for any period, the sum of the
amounts for such period of (i) Consolidated Cash Interest Expense, (ii)
scheduled payments of principal on the Indebtedness of Holdings and its
Subsidiaries (including the principal component of Capital Lease obligations but
excluding the Obligations), (iii) cash dividends paid in respect of the Capital
Stock of Holdings and (iv) cash payments in respect of redemptions of the
Capital Stock of Holdings.
"Consolidated Net Income" means, for any period, the net earnings
(or loss) after taxes of Holdings and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined in conformity
with GAAP.
"Consolidated Tangible Net Worth" means, with respect to any Person,
at any time, (i) total consolidated assets of such Person (including the
capitalized portion of Interest Rate Contracts), plus (ii) any negative
cumulative foreign exchange translation adjustments applicable to such Person,
minus (iii) total consolidated liabilities of such Person (excluding any accrued
and unpaid dividends payable on the Capital Stock of such Person), minus (iv)
any positive cumulative foreign exchange translation adjustments applicable to
such Person. There shall be excluded therefrom all General Intangibles (except
goodwill, tax refunds, tax refund claims, rights and claims against carriers,
shippers, franchises, lessors and lessees, and rights to indemnification),
organizational expenses and all unamortized debt discount and deferred charges
(including deferred taxes) and non-current pension liabilities or assets. Assets
and liabilities shall be determined in accordance with GAAP, except that
investments in and moneys due from Affiliates of the Borrowers (other than such
moneys in respect of trade accounts receivables and payables in the ordinary
course of business) shall be excluded from total consolidated assets.
"Contaminant" means any waste, pollutant, hazardous substance,
radioactive substance or material, toxic substance, hazardous waste, radioactive
waste, special waste, petroleum or petroleum-derived substance or waste,
asbestos in any form or condition, polychlorinated biphenyls ("PCBs"), or any
hazardous or toxic constituent thereof and includes, but is not limited to,
these terms as defined in Environmental, Health or Safety Requirements of Law.
"Constituent Document" means, (i) with respect to any corporation,
(A) the articles/certificate of incorporation (or the equivalent organizational
documents) of such entity, (B) the by-laws (or the equivalent governing
documents) of such entity and (C) any document setting forth the designation,
amount and/or relative rights, limitations and preferences of any class or
-13-
series of such entity's Capital Stock or any unanimous shareholder agreement
pertaining to the Canadian Borrower and (ii) with respect to any partnership
(whether limited or general), (A) the certificate of partnership (or equivalent
filings), (B) the partnership agreement (or equivalent organizational documents)
of such partnership and (C) any document setting forth the designation, amount
and/or rights, limitations and preferences of any of such partnership's
partnership interests.
"Contractual Obligation", as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument to which that Person is a party or by which
it or any of its properties is bound, or to which it or any of its properties is
subject.
"Credit Facilities" means, collectively, the U.S. Facility, the
Multicurrency Facility and the Canadian Facility.
"Cure Loans" is defined in Section 3.02(b)(iv)(C).
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.
"Currency Agreement Exposure" means, with respect to any Borrower at
any time and from time to time, an aggregate amount equal to one hundred and ten
percent (110%) of the then pre-settlement risk of such Borrower (determined by
the Agent in accordance with the Agent's (or its applicable Affiliate's)
customary practices) of each Currency Agreement entered into by such Borrower
and the Agent (or an Affiliate of the Agent) for the remaining term and volume
of such Currency Agreement, disregarding (subject to the immediately succeeding
sentence) any Currency Agreement with respect to which the pre-settlement risk
of such Borrower at such time is positive. If (i) such Borrower is a party to
(x) such Currency Agreement providing for such Borrower's purchase of a
particular currency and (y) a similar Currency Agreement with the same
counterparty providing for the sale of such currency and (ii) such Borrower and
such counterparty have entered into a netting agreement in form and substance
satisfactory to the Agent with respect to such Currency Agreements, then the
pre-settlement risk of such Persons at such time (determined by, the Agent in
accordance with the Agent's (or its applicable Affiliate's) customary practices)
under such Currency Agreements shall be netted against one another in
determining such Borrower's aggregate Currency Agreement Exposure (it being
understood and agreed that if any such netting of Currency Agreements results in
a positive net pre-settlement risk to such Borrower, such net pre-settlement
risk shall be disregarded in the calculation of such Borrower's aggregate
-14-
Currency Agreement Exposure).
"Customary Permitted Liens" means
(i) Liens (other than Environmental Liens and Liens in favor of the
PBGC) with respect to the payment of taxes, assessments or governmental
charges in all cases which are not yet due or which are not required to be
paid pursuant to Section 8.04;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, consignors, warehousemen, repairers or workmen and
other Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with GAAP;
(iii) Liens (other than any Lien in favor of the PBGC) incurred or
deposits made in the ordinary course of business in connection with
worker's compensation, unemployment insurance or other types of social
security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money), surety, appeal
and performance bonds; provided that all such Liens do not in the
aggregate materially detract from the value of any Borrower's or any of
its Subsidiaries' Property or materially impair the use thereof in the
operation of the business of such Borrower or any of such Subsidiaries;
(iv) Liens arising as a result of progress payments or otherwise
under government contracts; and
(v) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar charges or encumbrances on the use
of Real Property.
"Default" means an event which, with the giving of notice or the
lapse of time, or both, would constitute an Event of Default.
"Disbursement Accounts" means, collectively, the disbursement
account of each Borrower as set forth on Schedule 6.01-AA.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
-15-
"Dollars" and "$" mean the lawful money of the United States.
"Dollar Equivalent" means, with respect to any amount denominated in
an Available Currency (other than Dollars) on the date of determination thereof,
the equivalent of such amount in Dollars determined at the rate of exchange
equal to the Spot Rate on such date of determination.
"Domestic Borrowers" means, collectively, the Company, Pegasus and
Xxxxxxxxxx International.
"Domestic Borrowing Base" means, as of any date of determination,
with respect to the Domestic Borrowers, an amount equal to, with respect to each
category of Collateral set forth below, the Collateral Value of such Collateral
as of such date multiplied by a percentage, up to the applicable advance rate
set forth opposite such category of Collateral, provided, that, notwithstanding
the "Initial Advance Rates" set forth below, in September 1996, the Agent will
begin to permanently decrease (in a single decrease or a series of decreases)
certain of such "Initial Advance Rates" such that, on or before the second
anniversary of the Closing Date, the maximum advance rate with respect to each
category of Collateral set forth below is the "Revised Advance Rate" set forth
opposite such category:
================================================================================
Initial Revised
Category of Collateral Advance Advance
Rate Rate
================================================================================
(a) Eligible Supported Foreign 95% 85%
Receivables, up to an amount no
greater than the maximum coverage of
credit insurance relating thereto
--------------------------------------------------------------------------------
(b) Eligible Supported Foreign 75% 75%
Receivables in excess of such maximum
coverage
--------------------------------------------------------------------------------
(c) Eligible Domestic Receivables 90% 85%
--------------------------------------------------------------------------------
(d) Eligible Investment Grade Foreign 75% 60%
Receivables
--------------------------------------------------------------------------------
(e) Eligible L/C Backed Foreign 85% 85%
Receivables
--------------------------------------------------------------------------------
(f) Eligible Other Foreign Receivables 45% 40%
--------------------------------------------------------------------------------
(g) Eligible Domestic Inventory 70% 70%
consisting of plastics
--------------------------------------------------------------------------------
(h) Eligible Domestic Inventory 55% 55%
consisting of rubber
-16-
================================================================================
Initial Revised
Category of Collateral Advance Advance
Rate Rate
================================================================================
(i) Eligible Foreign Inventory consisting 65% 65%
of plastics located in the United
Kingdom
--------------------------------------------------------------------------------
(j) Eligible Foreign Inventory consisting 55% 55%
of rubber located in the United
Kingdom
--------------------------------------------------------------------------------
(k) Eligible Foreign Inventory consisting 50% 50%
of plastics located in any approved
European country (other than the
United Kingdom)
--------------------------------------------------------------------------------
(l) Eligible Foreign Inventory consisting 55% 55%
of rubber located in any approved
European country (other than the
United Kingdom)
--------------------------------------------------------------------------------
(m) All other Eligible Foreign Inventory 60% 60%
consisting of plastics
--------------------------------------------------------------------------------
(n) All other Eligible Foreign Inventory 50% 50%
consisting of rubber
--------------------------------------------------------------------------------
(o) Eligible Aged Inventory 30% 30%
--------------------------------------------------------------------------------
(p) Cash Collateral deposited by or on 100% 100%
behalf of any Domestic Borrower and
held from time to time in the
respective Cash Collateral Accounts
of the Domestic Borrowers
================================================================================
provided, however, the amount of Eligible Inventory included in the Domestic
Borrowing Base shall be the lesser of (i) the sum of the calculations for each
of the categories described in (g) through (o) above (i.e., the Collateral Value
of the Collateral in such category multiplied by the applicable advance rate)
and (ii) the Inventory Sublimit then in effect for the Domestic Borrowers. For
purposes of this definition, Eligible Supported Foreign Receivables, Eligible
Domestic Receivables, Eligible Investment Grade Foreign Receivables, Eligible
L/C Backed Foreign Receivables, Eligible Other Foreign Receivables, Eligible
Domestic Inventory, Eligible Foreign Inventory and Eligible Aged Inventory, as
of any date of determination, shall be determined after deduction of all
Eligibility Reserves then effective with respect to such items. As of ten (10)
Business Days after the date of notice of any determination thereof to the
Domestic Borrowers by the Agent (which notice shall include a reasonably
detailed explanation thereof), (x) any advance rate specified above (as reduced,
if applicable, by any permanent reductions of such advance rate) may be reduced
by the Agent in its sole
-17-
discretion so long as such adjustment is made in accordance with the Agent's
customary practices and (y) any advance rate so reduced may be increased by the
Agent in its sole discretion (but not in excess of the percentages set forth
above (as reduced, if applicable, by any permanent reductions of such advance
rate) which shall require the consent of all Lenders in accordance with Section
13.07(b)(ii)) so long as such adjustment is made in accordance with the Agent's
customary practices.
"Domestic Lending Office" means, with respect to any Lender, such
Lender's office, located in the United States, specified as the "Domestic
Lending Office" under its name on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such other United
States office of such Lender as it may from time to time specify by written
notice to the Borrowers and the Agent.
"EBITDA" means, for any period on a consolidated basis for Holdings
and its Subsidiaries, (i) the sum of the amounts for such period of (A)
Consolidated Net Income, (B) depreciation, amortization expense and other
non-cash charges, (C) Consolidated Cash Interest Expense, (D) charges for
federal, state, local and foreign income taxes, (E) extraordinary losses which
have been deducted in the determination of Consolidated Net Income, (F) other
non-operating expenses (including discounts and expenses under the Permitted
Receivables Financing Program) not otherwise included in Consolidated Net
Income, (G) non-recurring, non-operating expenses, (H) discretionary bonuses and
profit sharing (to the extent paid in Capital Stock of Holdings) and non-cash
deferred compensation expenses, net of any cash payments made in respect thereof
and (I) ESOP contribution expense, minus (ii) the sum of (A) extraordinary gains
not already excluded from the determination of Consolidated Net Income, (B)
income tax credits and (C) non-recurring, non-operating income.
"Eligibility Reserves" means, as of ten (10) Business Days after the
date of written notice of any determination thereof to the Borrowers by the
Agent (which notice shall include a reasonably detailed explanation thereof),
such amounts as the Agent, in the exercise of its sole discretion (and subject
to the Agent's customary practices), may from time to time establish against the
gross amounts of Eligible Aged Inventory, Eligible Domestic Inventory, Eligible
Domestic Receivables, Eligible Foreign Inventory, Eligible Investment Grade
Foreign Receivables, Eligible L/C Backed Foreign Receivables, Eligible Other
Foreign Receivables and Eligible Supported Foreign Receivables to reflect risks
or contingencies arising after the Closing Date which may affect such items and
which have not already been taken into account in the determination of Eligible
Aged Inventory, Eligible Domestic Inventory, Eligible Domestic Receivables,
Eligible Foreign Inventory, Eligible Investment Grade Foreign Receivables,
Eligible L/C Backed Foreign Receivables, Eligible Other Foreign Receivables and
Eligible Supported Foreign Receivables.
-18-
"Eligible Aged Inventory" means Eligible Inventory of a Borrower
which has not been sold or, in the case of returned Inventory, resold within one
(1) year after the date of such Borrower's original purchase thereof.
"Eligible Assignee" means (i) a Lender or any Affiliate thereof;
(ii) a commercial bank having total assets in excess of $500,000,000 or any
Affiliate thereof; (iii) a finance company, insurance company, other financial
institution or fund, acceptable to the Agent, which is regularly engaged in
making, purchasing or investing in loans and having total assets in excess of
$500,000,000; (iv) a savings and loan association or savings bank organized
under the laws of the United States or any state thereof which has a net worth,
determined in accordance with GAAP, in excess of $250,000,000; or (v) a finance
company, insurance company, bank, other financial institution or fund reasonably
acceptable to the Agent and the Borrower.
"Eligible Domestic Inventory" means Eligible Inventory of a Borrower
(other than Eligible Aged Inventory) which is then located in the United States
of America (including its territories and possessions) or, in the case of the
Canadian Borrower, Eligible Inventory (other than Eligible Aged Inventory) which
is then located in Canada.
"Eligible Domestic Receivables" means Eligible Receivables of a
Borrower which arise with respect to a sale to an account debtor located in (A)
with respect to any Domestic Borrower, the United States of America (including
its territories and possessions), (B) with respect to Receivables of the
Canadian Borrower, Canada or (C) with respect to any Borrower, in such other
jurisdiction or jurisdictions as the Agent may in its sole discretion determine
to be satisfactory for this purpose.
"Eligible Foreign Inventory" means Eligible Inventory of a Borrower
(other than Eligible Aged Inventory) which is then located in the United Kingdom
or Germany or, solely with respect to prepaid rubber Inventory, in Belgium or
The Netherlands or such other Inventory in such other jurisdiction or
jurisdictions (other than the United States (including its territories and
possessions) or Canada) as the Agent may in its sole discretion determine to be
satisfactory for this purpose.
"Eligible Inventory" means Inventory of a Borrower (other than any
Inventory which has been consigned to such Borrower) (i) with respect to which
the Agent has a valid and perfected first priority Lien (subject only to
Customary Permitted Liens), (ii) with respect to which no warranty contained in
any of the Loan Documents has been breached, (iii) which is not in the sole
discretion of the Agent (exercised in accordance with the Agent's customary
practices), obsolete, unmerchantable or subject to any statutory, contractual or
other
-19-
title retention or similar agreement or arrangement, and (iv) which the Agent
deems to be Eligible Inventory, based on such credit and collateral
considerations as the Agent deems appropriate. Except as otherwise agreed to by
the Agent, no Inventory of any Borrower shall be Eligible Inventory if such
Inventory is located, stored, used or held at a leased premises or the premises
of a third party unless (A) the Agent shall have received a Collateral Access
Agreement from such third party unless, solely with respect to Inventory located
in the United States of America (including its territories and possessions), a
Collateral Access Agreement is not required pursuant to Section 8.12 and (B)
appropriate UCC-1 financing statements shall have been executed or, in the case
of Inventory which is located, stored, used or held outside the United States of
America (including its territories and possessions), other appropriate action
satisfactory to the Agent shall have been taken to make the rights of the Agent
in such Inventory effective against third parties, with respect to such
location. The Agent reserves the right, upon ten (10) Business Days notice
thereof to the Borrowers (which notice shall include a reasonably detailed
explanation thereof), to create, from time to time, additional categories of
ineligible Inventory in accordance with its customary practices.
"Eligible Investment Grade Foreign Receivables" means Eligible
Receivables of a Borrower (other than any Eligible Supported Foreign Receivable,
Eligible L/C Backed Foreign Receivable or any Eligible Domestic Receivable) with
respect to a sale to an account debtor located in a country (other than the
United States of America (including its territories and possessions) or Canada)
the senior unsecured debt securities of which are rated BBB- (or better) by
Standard & Poor's Corporation (or its successors) or Baa3 (or better) by Xxxxx'x
Investors Service, Inc. (or its successors).
"Eligible L/C Backed Foreign Receivables" means Eligible Receivables
of a Borrower which arise with respect to a sale to an account debtor located in
any country (other than the United States (including its territories and
possessions) or Canada) and with respect to which the account debtor's
obligations (or that portion of such obligations which is acceptable to the
Agent) with respect to such sale is secured by a letter of credit, guaranty or
eligible bankers' acceptance having terms, and from such issuers and
confirmation banks, as are reasonably acceptable to the Agent (which letter of
credit, guaranty or acceptance is subject to the Lien of the Agent in a manner
reasonably satisfactory to the Agent).
"Eligible Other Foreign Receivables" means Eligible Receivables of a
Borrower which do not at such time constitute Eligible Domestic Receivables,
Eligible L/C Backed Foreign Receivables, Eligible Supported Foreign Receivables
or Eligible Investment Grade Foreign Receivables, provided that to the extent
-20-
that the Collateral Value of Eligible Other Foreign Receivables of the Borrowers
arising with respect to sales to account debtors located in a particular country
would in the absence of this proviso exceed 4% of the aggregate Collateral Value
of all Eligible Receivables of the Domestic Borrowers at such time, such
Receivables having an aggregate Collateral Value equal to such excess shall not
constitute Eligible Other Foreign Receivables.
"Eligible Receivables" means each Receivable of a Borrower which is
not at any time, except as otherwise agreed by the Agent, as the case may be, in
its sole discretion (exercised in accordance with its customary practices), of
any of the following types:
(i) (A) it is a Receivable which arises with respect to a sale to an
account debtor located in the United States of America (including its
territories and possessions), Canada or the United Kingdom the original
terms of which provide for payment more than 105 days (or such longer
period as the Agent may determine in its sole discretion) after the date
of the original invoice issued by such Borrower in connection with such
sale, (B) it is a Receivable (other than a Receivable referred to in
clause (A) above) that arises out of a sale the original terms of which
provide for payment more than 150 days (or such longer period as the Agent
may determine in its sole discretion) after the date of the original
invoice issued by such Borrower in connection with such sale or (C) it is
more than 60 days (or such longer period as the Agent may determine in its
sole discretion) past due, according to the original terms of sale; or
(ii) it arises out of a sale not made in the ordinary course of such
Borrower's business or a sale to a Person which is an Affiliate of such
Borrower; or
(iii) it fails to meet or violates any warranty, representation or
covenant contained in this Agreement or any of the other Loan Documents;
or
(iv) (A) the account debtor or any of its Affiliates is also such
Borrower's supplier or creditor and the Receivable is or may become
subject to any right of setoff by the account debtor, and such account
debtor has not entered into an agreement with the Agent with respect to
the waiver of rights of setoff or (B) the account debtor has disputed
liability with respect to such Receivable, or made any claim with respect
to any other Receivable due from such account debtor to such Borrower or
any of its Subsidiaries, in which case the Receivable shall be ineligible
to the extent of such dispute, claim or setoff; or
(v) the account debtor has filed a petition for or
-21-
assignment in bankruptcy or any other petition or application for relief
under the Bankruptcy Code or any similar statute of Canada, the United
Kingdom or any other relevant jurisdiction, or any political subdivision
thereof, made an assignment for the benefit of creditors, or if any
petition or other application for relief under the Bankruptcy Code or any
similar statute of Canada, the United Kingdom or any other relevant
jurisdiction, or any political subdivision thereof has been filed against
the account debtor, or if the account debtor has failed, suspended its
business operations, become insolvent, suffered a receiver, a
receiver-manager, administrator or a trustee to be appointed for any of
its assets or affairs, or is generally failing to pay its debts as they
become due, and, in the case of any of the foregoing, the Agent does not
determine that such occurrence should not result in ineligibility; or
(vi) the sale is on a xxxx-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment, or any other repurchase or
return basis; or
(vii) the Agent believes, in the exercise of its reasonable credit
judgment, that collection of such Receivable is insecure or that such
Receivable may not be paid by reason of the account debtor's financial
ability to pay; or
(viii) the account debtor is the United States of America, Canada,
the United Kingdom or any other foreign jurisdiction or any department,
agency or instrumentality thereof, unless the Company or its applicable
Subsidiary assigns its right to payment of such Receivable to the Agent
(on terms reasonably satisfactory to the Agent) pursuant to, in the case
of the United States, the Assignment of Claims Act of 1940, as amended (31
U.S.C. ss. 3727) or, with respect to any such other jurisdiction,
department, agency or instrumentality, any similar Requirement of Law then
in effect with respect to payments due from such jurisdiction, department,
agency or instrumentality; or
(ix) the goods, the delivery of which has given rise to such
Receivable, have not been delivered to or rejected by the account debtor
or the services, the performance of which has given rise to such
Receivable, have not been performed by such Borrower or rejected by the
account debtor; or
(x) the Receivable(s) of the respective account debtor exceed(s) a
credit limit determined by the Agent, in the exercise of its reasonable
credit judgment, at any time or times hereafter, in which case such
Receivable(s) shall be ineligible to the extent such Receivable(s)
exceed(s) such limit; or
-22-
(xi) the Agent does not have a valid and perfected first priority
security interest in such Receivable (subject only to Customary Permitted
Liens); or
(xii) the account debtor is located in the state of New Jersey or
Minnesota and such Borrower has not filed and maintained effective a
current Business Activity Report with the appropriate Governmental
Authority in such state (except in the case such Borrower is qualified to
transact business in such state as a foreign corporation); or
(xiii) the sale is to an account debtor with respect to which fifty
percent (50%) or more of all Receivables owing by such account debtor are
ineligible for any reason; or
(xiv) it arises out of or in connection with a retainage or similar
arrangement; or
(xv) it arises out of or in connection with, or has been or is to be
sold or otherwise transferred pursuant to, the Permitted Receivables
Financing Program; or
(xvi) in the case of Receivables which a Domestic Borrower has
purchased from any Affiliate thereof which is not a Domestic Borrower,
such purchase arrangements are not on terms reasonably satisfactory to the
Agent; or
(xvii) if sale of Inventory giving rise to such Receivable is
through an agent of such Borrower (including, without limitation, a
Subsidiary acting as agent for such Borrower), the agency agreement
applicable thereto is not substantially in the form of the agency
agreements approved by the Agent on the Closing Date (unless any changes
to, or deviations from, such form are reasonably satisfactory to the
Agent);
(xviii) it is deemed ineligible by the Agent in accordance with the
customary criteria of the Agent (it being understood that the Agent shall
provide such Borrower with ten (10) Business Days' notice of any exclusion
of a Receivable pursuant to this clause and a reasonably detailed
explanation for such exclusion).
"Eligible Supported Foreign Receivables" means Eligible Receivables
of a Borrower which arise with respect to sales to account debtors located
outside the United States of America (including its territories and possessions)
and Canada, and which are fully supported by credit insurance payable to such
Borrower on terms and conditions and from a financial institution satisfactory
to the Agent; provided that such credit insurance (x) shall be in full force and
effect and not in dispute and (y) shall have been collaterally assigned to the
Agent pursuant to
-23-
documentation in form and substance reasonably satisfactory to the Agent.
"Environmental, Health or Safety Requirements of Law" means all
valid and enforceable Requirements of Law derived from or relating to federal,
state, local and foreign laws, regulations, orders, ordinances, rules, permits,
licenses or other binding determination of any Governmental Authority relating
to or addressing the environment, health or safety, including but not limited to
any law, regulation, or order relating to the use, handling, or disposal of any
Contaminant, any law, regulation, or order relating to Remedial Action and any
law, regulation, or order relating to workplace or worker safety and health, and
such Requirements of Law as are promulgated by the specifically authorized agent
or agents responsible for administering such Requirements of Law.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for any (i) liabilities under any Environmental, Health or Safety
Requirement of Law, or (ii) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"Environmental Property Transfer Acts" means any applicable
Requirement of Law that conditions, restricts, prohibits or requires any
notification or disclosure triggered by the closure of any Property or the
transfer, sale or lease of any Property or deed or title for any Property for
environmental reasons, including, but not limited to, any so-called
"Environmental Cleanup Responsibility Act", "Responsible Transfer Act", or
"Industrial Site Recovery Act".
"Equipment" means, with respect to any Person, all of such Person's
present and future equipment (as defined in the Uniform Commercial Code or in
any similar statute of Canada, the United Kingdom or any other relevant
jurisdiction, or any political subdivision thereof).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate" means (i) any corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Internal Revenue Code) as Holdings or the Company; (ii) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Internal Revenue Code) with
Holdings or the Company; (iii) a member of the same affiliated service group
(within the meaning of Section 414(m) of the Internal Revenue Code) as Holdings
or the Company, any corporation described in clause (i) above or any partnership
-24-
or trade or business described in clause (ii) above; and (iv) any other Person
which is required to be aggregated with Holdings or the Company pursuant to
regulations promulgated under Section 414(o) of the Internal Revenue Code.
"ESOP" means the X. Xxxxxxxxxx & Co., Inc. Deferred Profit Sharing
and Employee Stock Ownership Plan, effective as of December 1, 1995, as the same
may be amended, supplemented or otherwise modified from time to time, subject in
each case to Section 9.16.
"Event of Default" means any of the occurrences set forth in Section
11.01 after the expiration of any applicable grace period and the giving of any
applicable notice, in each case as expressly provided in Section 11.01.
"Federal Funds Rate" means, for any period, a fluctu ating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day in New York, New York, for the next preceding
Business Day) in New York, New York by the Federal Reserve Bank of New York, or
if such rate is not so published for any day which is a Business Day in New
York, New York, the average of the quotations for such day on such transactions
received by the Agent from three federal funds brokers of recog nized standing
selected by the Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any Governmental Authority succeed ing to its functions.
"Financial Officer" means, with respect to Holdings or any Borrower,
the chief financial officer, treasurer, controller or other officer or member of
management of Holdings or such Borrower with significant responsibility for the
financial affairs of Holdings or such Borrower.
"Finova" means FINOVA Capital Corporation.
"Finova Credit Agreement" means the Term Loan Agreement dated as of
the Closing Date among Finova and the Company, as the same may be amended,
supplemented or otherwise modified from time to time.
"Finova Documents" means the Finova Credit Agreement and all other
instruments, agreements and written Contractual Obligations entered into in
connection with the Finova Credit Agreement and otherwise relating thereto.
"Finova Indebtedness" means the four year term credit facility
provided by Finova to the Company on the Closing Date in
-25-
an outstanding principal amount of $8,000,000 pursuant to the Finova Credit
Agreement.
"Finsub" means a corporation organized under the laws of a state of
the United States of America which is a special purpose Wholly Owned Subsidiary
of the Company formed solely for the purpose of engaging in the Permitted
Receivables Financing Program.
"Fiscal Year" means the fiscal year of the Borrower, which shall be
the 12-month period ending on December 31 of each calendar year.
"Fixed Charge Coverage Ratio" means, with respect to any period, the
ratio of (i) EBITDA for such period, minus Capital Expenditures for such period,
minus cash taxes for such period, to (ii) Consolidated Fixed Charges for such
period.
"Fixed Rate" means, with respect to any Interest Period applicable
to a Borrowing of Fixed Rate Loans under the applicable Credit Facility
denominated in the applicable currency, an interest rate per annum equal to (i)
the U.S. LIBO Rate with respect to Fixed Rate Loans denominated in Dollars under
the U.S. Facility and (ii) the Multicurrency LIBO Rate, with respect to Fixed
Rate Loans denominated in an Optional Currency under the Multicurrency Facility,
in each case in effect on the relevant Fixed Rate Determination Date.
"Fixed Rate Affiliate" means, with respect to each Lender, the
Affiliate of such Lender (if any) set forth below such Lender's name under the
heading "Fixed Rate Affiliate" on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such Affiliate of a
Lender as it may from time to time specify by written notice to the Borrowers
and the Agent.
"Fixed Rate Determination Date" means, with respect to a Borrowing
of Fixed Rate Loans, (i) the second Business Day prior to the first day of the
Interest Period for any Borrowing or (ii) in the case of a Borrowing of Fixed
Rate Loans under the Multicurrency Facility denominated in Pounds and maintained
in Pounds, the first day of the Interest Period for such Borrowing.
"Fixed Rate Interest Payment Date" means (i) with respect to any
Fixed Rate Loan, the last day of each Interest Period applicable to such Loan
and (ii) with respect to any Fixed Rate Loan having a Interest Period in excess
of three (3) calendar months, the last day of each three (3) calendar month
interval during such Interest Period.
"Fixed Rate Lending Office" means, with respect to any Lender, the
office or offices of such Lender (if any) set forth below such Lender's name
under the heading "Fixed Rate Lending
-26-
Office" on the signature pages hereof or on the Assignment and Acceptance by
which it became a Lender or such office or offices of such Lender as it may from
time to time specify by written notice to the Borrowers and the Agent.
"Fixed Rate Loans" means all Loans under the U.S. Facility and the
Multicurrency Facility denominated in Dollars or an Optional Currency
outstanding which bear interest at a rate determined by reference to the Fixed
Rate applicable to such currency as provided in Section 4.01(a).
"Floating Rate" means, for any period applicable to any Floating
Rate Loan denominated in any Available Currency, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be (i)
the U.S. Base Rate, in the case of Floating Rate Loans denominated in Dollars,
(ii) the Canadian Prime Rate, in the case of Floating Rate Loans denominated in
Canadian Dollars and (iii) the Multicurrency Base Rate, in the case of Floating
Rate Loans denominated in any Optional Currency.
"Floating Rate Loans" means all Loans denominated in an Available
Currency which bear interest at a rate determined by reference to the Floating
Rate applicable to such currency as provided in Section 4.01(a).
"Foreign Employee Benefit Plan" means any employee benefit plan as
defined in Section 3(3) of ERISA which is main tained or contributed to for the
benefit of the employees of the Borrower, any of its Subsidiaries or any of its
ERISA Affiliates, but which is not covered by ERISA pursuant to Section 4(b)(4)
of ERISA.
"Foreign Pension Plan" means any Foreign Employee Benefit Plan which
under applicable local law is required to be funded through a trust or other
funding vehicle.
"Funding Date" means, with respect to any Loan, the date of the
funding of such Loan.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board, the American
Institute of Certified Public Accountants and the Financial Accounting Standards
Board or in such other statements by such other entity as may be in general use
by significant segments of the accounting profession as in effect on the date of
the most recent audited financial statements of Holdings and its Subsidiaries
delivered to the Lenders prior to the Closing Date (unless otherwise specified
pursuant to Section 13.04).
"General Intangibles" means, with respect to any Person, all of such
Person's present and future general
-27-
intangibles (as defined in Section 9-106 of the Uniform Commercial Code or in
any similar Statute of Canada, the United Kingdom or any other relevant
jurisdiction, or any political subdivision thereof).
"Governmental Authority" means any nation or govern ment, any
xxxxxxx, xxxxx, xxxxxxxx, xxxxxxxxx, local or other political subdivision
thereof and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government.
"Holder" means any Person entitled to enforce any of the
Obligations, whether or not such Person holds any evidence of Indebtedness,
including, without limitation, the Agent, each Lender and each Issuing Bank.
"Holdings" is defined in the preamble.
"Holdings Guaranty" means the Guaranty dated as of the Closing Date
duly executed and delivered to the Agent and the Canadian Agent by Holdings
substantially in the form of Exhibit I hereto, as the same may be amended,
supplemented or otherwise modified from time to time.
"Holdings Pledge Agreement" means the Pledge Agreement dated as of
the Closing Date by and between Holdings and the Agent substantially in the form
of Exhibit J hereto, as the same may be amended, supplemented or otherwise
modified from time to time.
"Holdings Security Agreement" means the Security Agreement dated as
of the Closing Date by and between Holdings and the Agent substantially in the
form of Exhibit K hereto, as the same may be amended, supplemented or otherwise
modified from time to time.
"Indebtedness", as applied to any Person, at any time, shall mean,
without duplication, (a) all indebtedness, obligations or other liabilities of
such Person (i) for borrowed money or evidenced by debt securities, debentures,
acceptances, notes or other similar instruments, and any accrued interest, fees
and charges relating thereto, (ii) in respect of obligations (A) to redeem,
repurchase or exchange for cash any Securities at a fixed or determinable date,
at the option of another Person or upon the occurrence of a condition not solely
within the control of such Person, as of the time such payment date becomes
fixed or determined, such option is exercised or such condition is satisfied, as
the case may be, or (B) to pay cash dividends in respect of any stock, (iii)
with respect to letters of credit issued for such Person's account, (iv) to pay
the deferred purchase price of property or services, except (A) accounts payable
and accrued expenses arising in the ordinary course of business and (B) any
obligation arising solely in respect of the
-28-
conversion in the ordinary course of business of any current liability into a
long-term obligation in a like amount and bearing interest at a rate not in
excess of a market rate of interest, (v) in respect of Capital Leases, (vi)
which are Accommodation Obligations, (vii) upon which interest charges are
customarily paid (including zero coupon instruments but excluding obligations
referred to in clauses (iv)(A) or (iv)(B) above) or (viii) under conditional
sale or other title retention agreements relating to property purchased by such
Person; (b) all indebtedness, obligations or other liabilities of such Person or
others secured by a Lien on any property of such Person, whether or not such
indebtedness, obligations or liabilities are assumed by such Person, all as of
such time (it being understood that if recourse with respect to such
indebtedness, obligations or liabilities is limited to such property, such
indebtedness, obligations or other liabilities shall be limited to the fair
market value of such property); (c) all indebtedness, obligations or other
liabilities of such Person in respect of Interest Rate Contracts and Currency
Agreements, net of liabilities owed to such Person by the counterparties
thereon; and (d) all contingent Contractual Obligations with respect to any of
the foregoing.
"Indemnitee" is defined in Section 13.03.
"Indemnified Matter" is defined in Section 13.03.
"Initial Projections" means the financial projections initially
dated November 2, 1995 and updated on February 8, 1996 with respect to Holdings
and its Subsidiaries delivered by Holdings to the Lenders on or prior to the
Closing Date.
"Interbank Rate" means, for any period, (i) in respect of Loans
denominated in Dollars, the Federal Funds Rate, and (ii) in respect of Loans
denominated in any other Available Currency, the Floating Rate applicable to
such currency.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of the Closing Date between Finova and the Agent, as the same may be amended,
supplemented or otherwise modified from time to time.
"Interest Period" is defined in Section 4.02(b).
"Interest Rate Contract" means any interest rate exchange, swap,
collar, future, protection, cap, floor or similar agreements providing interest
rate protection.
"Interest Rate Contract Exposure" means, with respect to any
Borrower at any time and from time to time, an aggregate amount equal to one
hundred and ten percent (110%) of the then pre-settlement risk of such Borrower
(determined by the Agent in accordance with the Agent's (or its applicable
Affiliate's) customary practices) of each Interest Rate Contract entered into
-29-
by such Borrower and the Agent (or an Affiliate of the Agent) for the remaining
term and volume of such Interest Rate Contract, disregarding (subject to the
immediately succeeding sentence) any such Interest Rate Contract with respect to
which the pre-settlement risk of such Borrower at such time is positive. If (i)
such Borrower is a party to more than one Interest Rate Contract with the same
counterparty and (ii) such Borrower and such counterparty have entered into a
netting agreement in form and substance satisfactory to the Agent with respect
to such Interest Rate Contracts, then the pre-settlement risk of such Persons at
such time (determined by the Agent in accordance with the Agent's (or its
applicable Affiliate's) customary practices) under such Interest Rate Contracts
shall be netted against one another in determining such Borrower's aggregate
Interest Rate Contract Exposure (it being understood and agreed that if any such
netting of Interest Rate Contracts results in a positive net pre-settlement risk
to such Borrower, such net pre-settlement risk shall be disregarded in the
calculation of such Borrower's aggregate Interest Rate Contract Exposure).
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, any successor
statute and any regulations or guidance promulgated thereunder.
"Inventory" means, with respect to any Person, all of such Person's
present and future (i) inventory (as defined in Section 9-109(4) of the Uniform
Commercial Code or in any similar statute of Canada, the United Kingdom or any
other relevant jurisdiction, or any political subdivision thereof) (including
unbilled accounts receivable), (ii) goods, merchandise and other personal
Property furnished or to be furnished under any contract of service or intended
for sale or lease, and all goods consigned by such Person and all other items
which have previously constituted Equipment but are then currently being held
for sale or lease in the ordinary course of such Person's business, (iii) raw
materials, work-in-process and finished goods, (iv) materials and supplies of
any kind, nature or description used or consumed in such Person's business or in
connection with the manufacture, production, packing, shipping, advertising,
finishing or sale of any of the Property described in clauses (i) through (iii)
above, (v) goods in which such Person has a joint or other interest to the
extent of such Person's interest therein or right of any kind (including,
without limitation, goods in which such Person has an interest or right as
consignee), and (vi) goods which are returned to or repossessed by such Person;
in each case whether in the possession of such Person, a bailee, a consignee, or
any other Person for sale, storage, transit, processing, repair, use or
otherwise, and any and all documents for or relating to any of the foregoing.
"Inventory Sublimit" means the amount set forth opposite the name of
the Borrower(s) set forth below (it being
-30-
understood and agreed that the Company may from time to time by ten (10)
Business Days' written notice to the Agent (and subject to the Agent's consent
which shall not be unreasonably withheld) reallocate portions of the Inventory
Sublimit to one or more of such Borrowers; provided that the sum of such
portions so allocated shall not at any time exceed $35,000,000 in the
aggregate):
Borrower(s) Inventory Sublimit
----------- ------------------
Domestic Borrowers $32,000,000
Canadian Borrower $ 3,000,000
"Investment" means, with respect to any Person, (i) any purchase or
other acquisition by that Person of Securities, or of a beneficial interest in
Securities issued by or other equity ownership interest in any other Person,
(ii) any purchase by that Person of all or a significant part of the assets of a
business conducted by another Person, (iii) any loan, advance (other than
prepaid expenses, accounts receivable, advances to employees and similar items
made or incurred in the ordinary course of business), or capital contribution by
that Person to any other Person, including all Indebtedness to such Person
arising from a sale of property by such Person other than in the ordinary course
of its business and (iv) any accounts (including, without limitation, any such
deposit, cash collateral and investment accounts) with banks or other financial
institutions.
"IRS" means the Internal Revenue Service and any Person succeeding
to the functions thereof.
"Issue" means, with respect to any Letter of Credit, either to
issue, or extend the expiry of, or renew, or increase the amount of, such Letter
of Credit, and the term "Issued" or "Issuance" shall have a corresponding
meaning.
"Issuing Banks" means the U.S. Issuing Banks and the Canadian
Issuing Banks.
"Knowledge" (and the related term "Know") means, with respect to
Holdings' or any Borrower's knowledge, the knowledge of a Responsible Person of
Holdings or such Borrower.
"Leases" means those leases, tenancies or occupancies entered into
by Holdings, any Borrower or any of the Borrowers' respective Subsidiaries, as
tenant, sublessor or sublessee either directly or as the successor in interest
to the Company or any of its Affiliates.
"Lender" means, as of the Closing Date, Citicorp, the Canadian
Lender and each other institution which is a signatory hereto and, at any other
given time, the Canadian Lenders and each other institution which is a party
hereto as a Lender,
-31-
whether as a signatory hereto or pursuant to an Assignment and Acceptance.
"Letter Agreement" means the fee letter dated as of the
date hereof from Citicorp Securities, Inc. and Citicorp and
accepted by the Company.
"Letter of Credit" means any Commercial Letter of Credit or Standby
Letter of Credit Issued for the account of any Borrower pursuant to Section
2.02.
"Letter of Credit Availability" means, at any particular time (i)
with respect to the Domestic Borrowers, the Letter of Credit Sublimit for the
Domestic Borrowers minus the aggregate Letter of Credit Obligations of the
Domestic Borrowers outstanding at such time and (ii) with respect to the
Canadian Borrower, the Letter of Credit Sublimit for the Canadian Borrower minus
the Letter of Credit Obligations of the Canadian Borrower outstanding at such
time.
"Letter of Credit Fee" is defined in Section 4.03(a).
"Letter of Credit Obligations" means, at any particular time with
respect to any Borrower, the sum of (i) all outstanding Reimbursement
Obligations of such Borrower, plus (ii) the aggregate undrawn face amount of all
outstanding Letters of Credit issued for the account of such Borrower
(including, without limitation, any Letter of Credit with respect to which,
notwithstanding the termination thereof pursuant to its terms, the beneficiary
thereunder has a right to make drawings thereunder in accordance with applicable
law), plus (iii) the aggregate face amount of all Letters of Credit requested by
such Borrower but not yet issued (unless the request for an unissued Letter of
Credit has been denied pursuant to Section 2.02). For purposes of determining
the amount of Letter of Credit Obligations (or any component thereof) in respect
of any Letter of Credit which is denominated in an Available Currency (other
than Dollars), such amount shall equal the Dollar Equivalent of the amount of
such currency at the time of determination thereof.
"Letter of Credit Reimbursement Agreement" means, with respect to a
Letter of Credit, such form of application therefor and form of reimbursement
agreement therefor (whether in a single or several documents, taken together) as
the Issuing Bank from which the Letter of Credit is requested may employ in the
ordinary course of business for its own account, with such modifications thereto
as may be agreed upon by the Issuing Bank and the relevant Borrower and as are
not materially adverse (in the reasonable judgment of the Issuing Bank) to the
interests of the Lenders; provided, however, in the event of any conflict
between the terms hereof and of any Letter of Credit Reimbursement Agreement,
the terms hereof shall control.
-32-
"Letter of Credit Sublimit" means the amount set forth opposite the
name of the Borrower(s) set forth below (it being understood and agreed that the
Company may from time to time by ten (10) Business Days' written notice to the
Agent (and subject to the Agent's consent which shall not be unreasonably
withheld) reallocate portions of the Letter of Credit Sublimit to one or more of
such Borrowers; provided that the Letter of Credit Sublimit for the Canadian
Borrower shall not exceed $4,000,000 at any time; provided, further, that the
sum of the portions so allocated shall not at any time exceed $15,000,000 in the
aggregate):
Borrower(s) Letter of Credit Sublimit
----------- -------------------------
Domestic Borrowers $13,000,000
Canadian Borrower $ 2,000,000
"Liabilities and Costs" means all liabilities, obligations,
responsibilities, losses and damages with respect to or arising out of any of
the following: personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton injury,
damage or threat to the environment, natural resources or public health or
welfare, costs and expenses (including, without limitation, attorney, expert and
consulting fees and costs of or associated with investigation, feasibility or
Remedial Action studies), fines, penalties and monetary sanctions, voluntary
disclosures made to, or settlements with, the United States Government or any
foreign government or any political subdivision thereof, interest, direct or
indirect, known or unknown, absolute or contingent, past, present or future,
including interest, if any, thereon.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale agreement, deposit arrangement, security interest,
encumbrance, lien (statutory or other), preference, priority, title retention or
other security agreement or preferential arrangement (including, without
limitation, any negative pledge arrangement and any agreement to provide equal
and ratable security) of any kind or nature whatsoever in respect of any
property of a Person intended to assure payment of any Indebtedness, obligation
or other liability, whether granted voluntarily or imposed by law, and includes
the interest of a lessor under a Capital Lease or under any financing lease
having substantially the same economic effect as any of the foregoing and the
filing of any financing statement or similar notice (other than a financing
statement filed by a "true" lessor pursuant to ss. 9-408 of the Uniform
Commercial Code or any similar statute of Canada, the United Kingdom or any
other relevant jurisdiction, or any political subdivision thereof), naming the
owner of such property as debtor, under the Uniform Commercial Code or other
comparable law of any jurisdiction, but does not include the interest of a
lessor under an Operating
-33-
Lease.
"Loan Documents" means this Agreement, the Notes, the Holdings
Guaranty, the Borrower Guaranty, the Subsidiary Guaranty, the Borrower Security
Agreements, the Holdings Security Agreement, the Company Trademark Security
Agreement, the Holdings Pledge Agreement, the Borrower Pledge Agreements, the
Subsidiary Security Agreements, the Letter Agreement, the Letter of Credit
Reimbursement Agreements, the Intercreditor Agreement, the Collection Account
Agreements, the other documents executed or delivered pursuant to Section
5.01(a) by Holdings, the Company or any Subsidiary of the Company, any Currency
Agreements to which the Agent or any Affiliate of the Agent is a party, any
Interest Rate Contracts to which the Agent or any Affiliate of the Agent is a
party, and all other instruments, agreements and written Contractual Obligations
between any Borrower or any Subsidiary of any Borrower, on the one hand, and any
of the Agent, the Lenders or the Issuing Banks, on the other hand, in each case
delivered to either the Agent, such Lender or such Issuing Bank before, on or
after the Closing Date pursuant to or in connection with the transactions
(including, without limitation, the cash management arrangements) contemplated
hereby. The Loan Documents shall not include the Permitted Receivables
Transaction Documents.
"Loans" means all the Revolving Loans and the Swing Loans.
"Lockboxes" means, collectively, the lockboxes established at the
Collection Account Banks for collection of payments in respect of Receivables or
other Collateral.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U and Regulation G.
"Material Adverse Effect" means a material adverse effect upon (i)
the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Domestic Borrowers, taken as a whole, or the
Canadian Borrower, individually, (ii) the ability of Holdings or any of the
Borrowers to perform their respective material obligations under the Loan
Documents or (iii) the ability of the Lenders, the Issuing Banks, or the Agent
to enforce the Loan Documents.
"Maximum Revolving Credit Amount" means, at any particular time, an
amount equal to:
(i) with respect to the U.S. Facility, (A) the lesser of (1) the
U.S. Commitments in effect at such time and (2) the excess, if any, of (a)
the Domestic Borrowing Base at such time over (b) the Multicurrency
Commitments in effect at such time, minus (B) the amount of any
Availability Reserves applicable to the U.S. Facility in effect at such
time, minus (C) the aggregate amount of the Currency
-34-
Agreement Exposure of the U.S. Borrowers at such time, minus (D) the
aggregate amount of the Interest Rate Contract Exposure of the U.S.
Borrowers at such time;
(ii) with respect to the Multicurrency Facility, (A) the lesser of (1)
the Multicurrency Commitments in effect at such time and (2) the Domestic
Borrowing Base at such time, minus (B) the amount of any Availability
Reserves applicable to the Multicurrency Facility in effect at such time,
minus (C) the amount of the Currency Agreement Exposure of the
Multicurrency Borrower at such time, minus (D) the amount of the Interest
Rate Contract Exposure of the Multicurrency Borrower at such time; and
(iii) with respect to the Canadian Facility, (A) the lesser of (1) the
Canadian Commitments in effect at such time and (2) the Canadian Borrowing
Base at such time, minus (B) the amount of any Availability Reserves
applicable to the Canadian Facility in effect at such time, minus (C) the
amount of the Currency Agreement Exposure of the Canadian Borrower at such
time, minus (D) the amount of the Interest Rate Contract Exposure of the
Canadian Borrower at such time.
"Xxxxxxxxxx International" is defined in the preamble.
"Multicurrency Base Rate" means, for any period, a fluctuating
interest rate per annum as shall be in effect from time to time, which rate per
annum shall at all times be equal to the rate of interest designated and
published in London by the principal office of Citibank in London, England as
the "base rate" applicable to an Optional Currency, in the case of Floating Rate
Loans denominated in such Optional Currency.
"Multicurrency Borrower" means Pegasus.
"Multicurrency Commitment" means, as to each Multicurrency Lender,
the commitment of such Multicurrency Lender to make Multicurrency Loans to the
Multicurrency Borrower in the aggregate principal amount outstanding not to
exceed the amount on the Closing Date set forth opposite such Multicurrency
Lender's name on Schedule 1.01.1 under the caption "Multicurrency Commitment,"
as such amount may be reduced or modified pursuant to this Agreement; provided,
however, at no time shall the aggregate Multicurrency Commitments of all
Multicurrency Lenders exceed $35,000,000 less any permanent reduction made
pursuant to Section 3.01.
"Multicurrency Facility" means the facility provided by the
Multicurrency Lenders to make Multicurrency Loans to the Multicurrency Borrower
in accordance with the terms and conditions contained in this Agreement.
-35-
"Multicurrency Lenders" means the Lenders designated as such on
Schedule 1.01.1 under the caption "Multicurrency Commitment" and each other
institution which is party hereto as a Multicurrency Lender pursuant to an
Assignment and Acceptance.
"Multicurrency LIBO Rate" means, with respect to any Interest Period
applicable to a Borrowing of Fixed Rate Loans under the Multicurrency Facility
denominated in an Optional Currency:
(i) the interest rate per annum equal to (A) the offered quotations
for deposits in the Optional Currency of the relevant Borrowing for a
period comparable to the relevant Interest Period which appears on the
Telerate Page 3750 or Telerate Page 3740 (as appropriate) at or about
11:00 a.m. (London time) on the applicable Fixed Rate Determination Date;
or (B) if no such interest rate determined under clause (A) is available,
the arithmetic mean (rounded upward to the nearest one-sixteenth of one
percent (0.0625%)) of the interest rates, as supplied to Citibank at its
request, quoted by the "London Reference Banks" to leading banks in the
London interbank market at or about 11:00 a.m. (London time) on the
applicable Fixed Rate Determination Date for the offering of deposits in
the Optional Currency of the relevant Borrowing for a period comparable to
the relevant Interest Period; plus
(ii) in the case of Fixed Rate Loans denominated in Pounds, the
amount (expressed as a percentage) of "associated reserve costs" being
imposed by the Bank of England on the relevant Fixed Rate Determination
Date. The Multicurrency LIBO Rate shall be adjusted automatically on and
as of the effective date of any change in the amount of associated reserve
costs so imposed. The Agent shall provide to the Multicurrency Borrower,
upon the reasonable request of the Multicurrency Borrower, a reasonably
detailed explanation of any associated reserve costs used in the
determination of the Multicurrency LIBO Rate.
For the purposes of this definition, "Telerate Page 3750" means the display
designated as "Page 3750", and "Telerate Page 3740" means the display designated
as "Page 3740" in each case on the Telerate Service (or such other page as may
replace Page 3750 or Page 3740, as applicable, on the service as may be
nominated by the British Bankers' Association as the information vendor for the
purpose of displaying British Bankers' Association Interest Settlement Rates for
deposits in the Optional Currency concerned).
"Multicurrency Loan" is defined in Section 2.01(a).
"Multicurrency Loan Notes" means one or more notes made payable to
the Multicurrency Lenders evidencing the Multicurrency
-36-
Borrower's Obligation to repay the Multicurrency Loans.
"Multicurrency Swing Loan Bank" means Citibank, in its individual
capacity or, in the event Citicorp is not the Agent, the Agent (or any Affiliate
of the Agent designated by the Agent), in its individual capacity. The
Multicurrency Swing Loan Bank may from time to time make in its sole discretion
Swing Loans under the Multicurrency Facility.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is, or within the immediately preceding six
(6) years was, contributed to by any Borrower or any ERISA Affiliate.
"Net Cash Proceeds" means (i) proceeds received by any Borrower or
any of such Borrower's Subsidiaries in cash or Cash Equivalents from the sale
(including, without limitation, any Sale and Leaseback Transaction), assignment
or other disposition, of any Property, other than sales, assignments and other
dispositions of Property between the Company and Wholly Owned Subsidiaries of
the Company to the extent permitted hereunder and sales, assignments and other
dispositions permitted under clauses (i) and (iv) through (viii) of Section
9.02, net of (A) the reasonable costs and expenses (including reasonable legal,
accounting, investment banking, governmental, filing and other fees and expenses
incurred in connection therewith) of sale, assignment or other disposition, (B)
taxes paid or payable as a result thereof and (C) the amount of any Indebtedness
(other than the Obligations but including the Finova Indebtedness) secured by
such Property (to the extent permitted hereunder) and repaid in connection with
such sale, provided that evidence of each of (A), (B) and (C) are provided to
the Agent; (ii) proceeds of insurance on account of the loss of or damage to any
Collateral or any other Property (net of the amount required to be paid under
the terms of any Indebtedness (including the Finova Indebtedness) secured by
such Property (to the extent permitted hereunder)) and payments of compensation
for any Collateral or any such other Property taken by condemnation or eminent
domain; (iii) proceeds received after the Closing Date by Holdings, the Company,
or any of the Company's Subsidiaries in cash or Cash Equivalents from (A) the
issuance of any Capital Stock by Holdings (other than any such issuance
occurring (x) in the ordinary course of business to any member of the management
of the Company in connection with such member's employment with the Company, (y)
pursuant to the ESOP or the Retirement Plan or (z) Common Stock purchased after
the Closing Date by certain employees of Holdings, the Company or its
Subsidiaries pursuant to the Registration Statement), or any other additions to
the equity of Holdings (other than retained earnings or by reason of any capital
contributions or dividends among Holdings, the Company and its Subsidiaries
permitted by this Agreement), net of the reasonable costs and expenses
(including reasonable legal, accounting, investment banking, governmental,
filing and other fees and expenses incurred in
-37-
connection therewith) of sale, assignment or other disposition, provided that
evidence of such costs is provided to the Agent or (B) the issuance of any
Indebtedness by Holdings, the Company, or any Subsidiary of the Company (except
for such Indebtedness permitted under Section 9.01 and any such Indebtedness
incurred in connection with Currency Agreements or Interest Rate Contracts to
the extent any Borrower is permitted to enter into such contracts pursuant to
the terms hereof), net of the reasonable costs and expenses (including
reasonable legal, accounting, investment banking, governmental, filing and other
fees and expenses incurred in connection therewith) of issuance thereof,
provided that evidence of such costs is provided to the Agent.
"Non Pro Rata Loan" is defined in Section 3.02(b)(iv).
"Nonvoting Common Stock" means the Nonvoting Common Stock, par value
$0.01 per share, of Holdings.
"Nonvoting Common Stock Purchase Agreement" means the Common Stock
Purchase Agreement dated as of the Closing Date between Citicorp North America,
Inc. and Holdings.
"Notes" means, collectively, the U.S. Loan Notes, the Multicurrency
Loan Notes and the Canadian Loan Notes and all amendments thereto, replacements
thereof and substitutions therefor.
"Notice of Borrowing" means a notice substantially in the form of
(i) Exhibit L-1 for Borrowings under the U.S. Facility, (ii) Exhibit L-2 for
Borrowings under the Multicurrency Facility and (iii) Exhibit L-3 for Borrowings
under the Canadian Facility.
"Notice of Continuation/Conversion" means a notice substantially in
the form of Exhibit M.
"Notice of Letter of Credit Issuance" means a notice substantially
in the form of (i) Exhibit N-1 for Letters of Credit Issued under the U.S.
Facility and (ii) Exhibit N-2 for Letters of Credit Issued under the Canadian
Facility.
"Notice of Withdrawal" means a notice substantially in the form of
(i) Exhibit O-1 for withdrawals from the applicable Cash Collateral Accounts by
the Multicurrency Borrower and (ii) Exhibit O-2 for withdrawals from the
Canadian Cash Collection Account or Canadian Cash Collateral Account by the
Canadian Borrower.
"NPL" is defined in Section 6.01(o).
"Obligations" means, to the extent arising hereunder, under the
Notes or under any other Loan Document, all Loans, advances, debts, liabilities,
obligations, covenants and duties
-38-
owing by Holdings, any Borrower or any Subsidiary Guarantor to the Agent, the
Canadian Agent, any Lender, any Issuing Bank, any Affiliate of the Agent, any
Lender or any Issuing Bank, or any Person entitled to indemnification pursuant
to Section 13.03, of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, whether or not for the
payment of money, whether arising (i) under or in connection with (A) a Currency
Agreement with the Agent or any Affiliate of the Agent, (B) an Interest Rate
Contract with the Agent or any Affiliate of the Agent or (C) the U.S.
Concentration Account, the Canadian Cash Collection Account, the Cash Collateral
Accounts or any cash management services provided by the Agent or any Affiliate
of the Agent, or (ii) by reason of (A) an extension of credit, (B) opening or
amendment of a Letter of Credit or payment of any draft drawn thereunder, (C)
loan, (D) guaranty or (E) indemnification or (iii) in any other manner, whether
direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limita tion, all interest, charges,
expenses, fees, reasonable attor neys' fees and disbursements and any other sum
chargeable to Holdings, any Borrower or any Subsidiary Guarantor hereunder or
under any other Loan Document and the obligations of the Borrowers to cash
collateralize the Letter of Credit Obligations and shall also include the
obligations of Holdings or any of its Subsidiaries to Citibank or its Affiliates
in respect of any liabilities such Person has in respect of any corporate credit
cards (not to exceed, with respect to such credit cards, $450,000 in the
aggregate for all such Persons) or in connection with cash management functions,
performed by Citibank or its Affiliates on behalf of Holdings or any of its
Subsidiaries.
"Officer's Certificate" means, as to a corporation, a certificate
executed on behalf of such corporation by an officer or director of such
corporation and, with respect to Holdings, any Borrower or any Subsidiary
Guarantor, substantially in the form of Exhibit P.
"Operating Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which is not
a Capital Lease.
"Optional Currency" means any of the lawful currencies of France,
Germany, Italy, Spain or the United Kingdom.
"Paid In Full", "Pay In Full" and "Payment In Full" means, with
respect to the Obligations of any Borrower or Subsidiary Guarantor, (i) with
respect to each Letter of Credit issued for the account of such Borrower, the
termination and surrender for cancellation of such Letter of Credit, (ii) with
respect to (A) each Letter of Credit (other than those referred to in clause (i)
above, including, without limitation, any Letter of Credit with respect to
which, notwithstanding the termination
-39-
thereof pursuant to its terms, the beneficiary thereunder has a right to make
drawings thereunder in accordance with applicable law), (B) each Currency
Agreement with the Agent or any Affiliate of the Agent to which such Borrower or
Subsidiary Guarantor is a counterparty, (C) each Interest Rate Contract with the
Agent or any Affiliate of the Agent to which such Borrower or Subsidiary
Guarantor is a counterparty, the delivery of Cash Collateral in such form as
requested by the Agent (and, in the case of Letters of Credit, the applicable
Issuing Bank) for deposit in the appropriate Cash Collateral Account, together
with such endorsements, and execution and delivery of such documents and
instruments as the Agent may request in order to perfect or protect the Agent's
Lien with respect thereto, in an aggregate principal amount equal to the then
outstanding Letter of Credit Obligations, Currency Agreement Exposure and
Interest Rate Contract Exposure, respectively, with respect thereto and (iii)
with respect to all other Obligations (other than, as of any date of payment,
Obligations which are contingent and unliquidated and not then due and owing and
which pursuant to Section 13.09, survive the making and repayment of the Loans,
the issuance and discharge of Letters of Credit hereunder and the termination of
the Commitments hereunder), the payment in full in cash of such Obligations.
"Payment Account" means each account of the Agent or the Canadian
Agent into which fundings of Loans and payments in respect of Obligations shall
be made. The Payment Accounts as of the Closing Date are set forth on Schedule
1.01.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"Pegasus" is defined in the preamble.
"Pegasus Asia" means Pegasus Polymers Asia Limited, a Hong Kong
corporation.
"Pegasus Benelux" means Pegasus Polymers Benelux, Inc., a Delaware
corporation.
"Pegasus Coordination" means Pegasus Polymers International
Coordination, Inc., a Delaware corporation.
"Permits" means any permit, approval, authorization, license,
variance, exemption, no-action letter or permission required from a Governmental
Authority under an applicable Requirement of Law.
"Permitted Existing Accommodation Obligations" means those
Accommodation Obligations of the Company and its Subsidi aries identified as
such on Schedule 1.01.3.
"Permitted Existing Indebtedness" means the Indebted-
-40-
ness of the Company and its Subsidiaries identified as such on Schedule 1.01.4.
"Permitted Existing Investments" means those Invest ments identified
as such on Schedule 1.01.5.
"Permitted Existing Liens" means the Liens on assets of the Company
or any of its Subsidiaries identified as such on Schedule 1.01.6.
"Permitted Receivables Financing Program" means a receivables
financing program providing, among other things, for (i) the sales to the
Company by certain of its Subsidiaries of Receivables originated by such
Subsidiaries, (ii) the sale by the Company or any of its Subsidiaries to Finsub
of such Receivables, and (iii) the transfer of such Receivables by Finsub to a
special purpose trust or corporation which is not an Affiliate of the Company or
Finsub; provided that (x) all terms and conditions of such program shall be
substantially consistent with the Proposal Letter dated November 20, 1995
between Citicorp North America, Inc. and the Company relating to such program or
otherwise on terms and conditions satisfactory to the Requisite Lenders, (y) all
documentation relating to such program shall be subject to the prior written
approval of the Requisite Lenders (it being understood and agreed that certain
amendments to Article X and the other provisions of this Agreement may be
required in connection with the Permitted Receivables Financing Program) and (z)
the Capital Stock of Finsub and any promissory notes issued by Finsub to the
Borrowers in connection with such program shall have been pledged to the Agent
pursuant to the Loan Documents as additional security for the Obligations.
"Permitted Receivables Transaction Documents" means the documents
approved in writing by the Requisite Lenders and executed and delivered in
connection with the Permitted Receivables Financing Program, as such documents
may be amended, supplemented or otherwise modified from time to time.
"Permitted Subordinated Indebtedness" means unsecured Indebtedness
that is subordinated to the Obligations, the terms of which (including, without
limitation, terms relating to principal amount, interest, maturity, covenants,
subordination and cross-default) and all documentation relating thereto have
been approved by the Requisite Lenders in writing. The Finova Indebtedness shall
not be deemed to be Permitted Subordinated Indebtedness.
"Person" means any natural person, corporation, limited partnership,
limited liability company, general partnership, joint stock company, joint
venture, association, company, trust, bank, trust company, land trust, business
trust or other organization, whether or not a legal entity, or any Governmental
Authority.
-41-
"Plan" means an employee benefit plan defined in Section 3(3) of
ERISA in respect of which any Borrower or any ERISA Affiliate is, or within the
immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
"Pounds" means the lawful currency of the United Kingdom.
"Preferred Stock" means the Series A Preferred Stock, par value
$0.01 per share, issued by Holdings to Xxxxxxxxxx Holding Corporation (or a
Mobil Affiliate (as defined in the Acquisition Agreement)) pursuant to the
Acquisition Agreement, with a liquidation preference not exceeding $10,000,000.
"Pro Rata Share" means (i) with respect to any Lender and any Credit
Facility, the percentage obtained by dividing (A) such Lender's Revolving Credit
Commitment in respect of such Credit Facility at such time by (B) the aggregate
amount of all Revolving Credit Commitments in respect of such Credit Facility at
such time and (ii) with respect to any Lender and the Credit Facilities taken as
a whole, the percentage obtained by dividing (A) such Lender's Revolving Credit
Commitment in respect of all Credit Facilities at such time by (B) the aggregate
amount of all Revolving Credit Commitments at such time; provided, however, if
all of the Revolving Credit Commitments are terminated pursuant to the terms
hereof, then "Pro Rata Share" means the percentage obtained by dividing (x) the
aggregate amount of such Lender's Revolving Credit Obligations under all Credit
Facilities by (y) the aggregate amount of all Revolving Credit Obligations.
"Process Agent" is defined in Section 13.17.
"Property" means any Real Property or personal prop erty, plant,
building, facility, structure, underground storage tank or unit, Equipment,
Inventory, General Intangible, Receivable, or other asset owned, leased or
operated by any Borrower or any of its Subsidiaries, as applicable (including
any surface water thereon or adjacent thereto, and soil and groundwater
thereunder).
"Protective Advance" is defined in Section 12.09.
"Real Property" means, with respect to any Person, all of such
Person's present and future right, title and interest (including, without
limitation, any leasehold estate) in real property.
"Reallocation Request" is defined in Section 3.01(c).
"Receivables" means, with respect to any Person, all of such
Person's present and future (i) accounts (as defined in the Section 9-106 of the
Uniform Commercial Code or in any similar
-00-
xxxxxxx xx Xxxxxx, xxx Xxxxxx Xxxxxxx or any other relevant jurisdiction, or any
political subdivision thereof), (ii) accounts receivable, (iii) rights to
payment for goods sold or leased or for services rendered (except those
evidenced by instruments or chattel paper), whether or not earned by perfor
xxxxx, (iv) all rights in any merchandise or goods which any of the same may
represent, and (v) all rights, title, security, insurance, letters of credit and
guaranties with respect to each of the foregoing, including, without limitation,
any right of stoppage in transit.
"Reduction Amount" is defined in Section 3.01(c).
"Register" is defined in Section 13.01(c).
"Registration Statement" means Holdings' Registration Statement on
Form S-1 under the Securities Act of 1933 (Registration No. 33-99754), as
amended, relating to the offering by Holdings to certain Persons of up to
2,000,000 shares of Common Stock.
"Regulation A" means Regulation A of the Federal Reserve Board as in
effect from time to time.
"Regulation D" means Regulation D of the Federal Reserve Board as in
effect from time to time.
"Regulation G" means Regulation G of the Federal Reserve Board as in
effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board as in
effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board as in
effect from time to time.
"Reimbursement Date" is defined in Section 2.02(d)(i)(A).
"Reimbursement Obligations" means, as to any Borrower, the aggregate
non-contingent reimbursement or repayment obliga tions of such Borrower with
respect to amounts drawn under Letters of Credit Issued for the account of such
Borrower.
"Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment.
"Remedial Action" means actions required to (i) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment; or (ii) investigate and determine if a remedial response is needed
and to design such a response and post-remedial investigation, monitoring,
operation and
-43-
maintenance and care.
"Reportable Event" means any of the events described in Section 4043
of ERISA.
"Requirements of Law" means, as to any Person, the charter and
by-laws or other organizational or governing docu ments of such Person, and any
law, rule or regulation, or deter mination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act, the Securities Exchange Act,
Regulations G, U and X, ERISA, the Fair Labor Standards Act and any similar
statute of any foreign government or any political subdivision thereof and any
certificate of occupancy, zoning ordinance, building, or land use requirement or
Permit or labor or employment rule or regulation, including Environmental,
Health or Safety Requirements of Law.
"Requisite Lenders" means, at any time, Lenders holding, in the
aggregate, at least fifty-one percent (51%) of the then aggregate amount of the
Revolving Credit Commitments in effect at such time; provided, however, that, in
the event any of the Lenders shall have failed to fund its Pro Rata Share of any
Revolving Loan requested by any Borrower under any Credit Facility which such
Lenders are obligated to fund under the terms hereof and any such failure has
not been cured, then for so long as such failure continues, "Requisite Lenders"
means at least two Lenders (excluding Lenders (and their Affiliates who are
Lenders) whose failure to fund their respective Pro Rata Share of such Loans
have not been so cured) whose Pro Rata Shares of the Credit Facilities represent
at least fifty-one percent (51%) of the aggregate Pro Rata Shares of such
Lenders provided, that the requirement of two Lenders shall cease to be in
effect at any time there are more than three Lenders holding U.S. Commitments;
provided, further, however, that, in the event that the Revolving Credit
Commitments have been terminated pursuant to the terms hereof, "Requisite
Lenders" means Lenders (without regard to such Lenders' performance of their
respective obligations hereunder) whose aggregate ratable shares (stated as a
percentage) of the aggregate outstanding principal balance of all Revolving
Credit Obligations are at least fifty-one percent (51%).
"Responsible Person" means (i) with respect to any Borrower, any
Financial Officer of such Borrower or any other officer of such Borrower which
is also a member of the leadership committee of the Company and (ii) solely in
the case of the Company, any member of the leadership committee of the Company.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of Holdings or any of its Subsidiaries now or hereafter
outstanding, except a dividend
-44-
payable solely in (x) shares of, or options or warrants (which do not contain
put or call rights) with respect to, that class of stock and/or (y) shares of
any class of stock which is junior to that class of stock, provided that such
shares do not constitute Indebtedness, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of Capital Stock of Holdings or any of its
Subsidiaries now or hereafter outstanding, (iii) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of Holdings or any of its Subsidiaries now or hereafter outstand ing and
(iv) any payment or prepayment of principal of, premium, if any, or interest,
fees or other charges on or with respect to, and any redemption, purchase,
retirement, defeasance, sinking fund or similar payment and any claim for
rescission with respect to any Indebtedness (other than the Finova Indebtedness)
which by its terms is subordinated to the Obligations, including, without
limitation, the Permitted Subordinated Indebtedness.
"Retirement Plan" means the X. Xxxxxxxxxx & Co., Inc. Employees'
Retirement Plan, amended and restated as of January 1, 1994, as the same may be
amended, supplemented or otherwise modified from time to time, subject in each
case to Section 9.16.
"Revolving Credit Availability" means, with respect to any Credit
Facility at any particular time, the amount by which the Maximum Revolving
Credit Amount for such Credit Facility exceeds the Revolving Credit Obligations
outstanding under such Credit Facility at such time.
"Revolving Credit Commitments" means, collectively, the U.S.
Commitments, the Multicurrency Commitments and the Canadian Commitments (it
being understood and agreed that the maximum aggregate principal amount of the
Revolving Credit Commitments shall not exceed $125,000,000, as reduced from time
to time pursuant to the terms hereof).
"Revolving Credit Obligations" means, at any particular time with
respect to any Credit Facility, the sum of (i) the outstanding principal amount
of the Swing Loans at such time, plus (ii) the outstanding principal amount of
the Revolving Loans at such time, plus (iii) the Letter of Credit Obligations
outstanding at such time, plus (iv) the aggregate principal amount of Protective
Advances outstanding at such time, in each case under such Credit Facility. For
purposes of determining the amount of Revolving Credit Obligations (or any
component thereof) in respect of any Revolving Loan which is denominated in any
Available Currency (other than Dollars), such amount shall equal the Dollar
Equivalent of the amount of such currency at the time of determination thereof.
"Revolving Credit Termination Date" means the earlier
-45-
to occur of (i) the date of termination of the Revolving Credit Commitments
pursuant to the terms hereof and (ii) the fourth anniversary of the Closing
Date.
"Revolving Loan" is defined in Section 2.01(a).
"Sale and Leaseback Transaction" means, with respect to any Person,
any direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person and is thereafter leased back from the purchaser
thereof by such Person.
"Securities" means any stock, shares, voting trust certificates,
bonds, debentures, notes or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or any certificates of
interest, shares, or participation in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire
any of the foregoing, but shall not include any evidence of the Obligations.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, and any successor statute.
"Settlement Date" is defined in Section 2.01(f).
"Shareholders' Agreement" means the Shareholders' Agreement dated as
of January 31, 1996 among Holdings and certain holders of shares of Common
Stock.
"Solvent", when used with respect to any Person, means that at the
time of determination:
(i) the assets of such Person, at a fair valuation, are in excess of
the total amount of its debts (including, without limitation, contingent
liabilities); and
(ii) the present fair saleable value of its assets is greater than
its probable liability on its existing debts as such debts become absolute
and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments) as
they mature; and
(iv) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the
-46-
amount that, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Spot Rate" means, as of any date of determination with respect to
the conversion of an amount in one currency (the "Original Currency") to another
currency (the "Other Currency"), the rate of exchange quoted by the Agent (or
its Affiliate) in New York, New York (if the Original Currency is Dollars),
London, England (if the Original Currency is an Optional Currency), or Toronto,
Canada (if the Original Currency is Canadian Dollars), at 11:00 a.m. (New York
time, London time or Toronto time, as applicable) on such date of determination
to prime banks in New York, New York, London, England, or Toronto, Canada, as
appropriate, for the spot purchase in the foreign exchange market of such city
of such amount of the Original Currency with such Other Currency.
"Standby Letter of Credit" means any Letter of Credit Issued by an
Issuing Bank pursuant to Section 2.02 for the account of a Domestic Borrower
which is not a Commercial Letter of Credit.
"Standing Orders" means a letter agreement between the Agent and the
applicable depository bank with respect to the transfer of funds into a Cash
Collateral Account, in form and substance satisfactory to the Agent.
"Subsidiary" of a Person means any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned or controlled by such
Person, one or more of the other subsidiaries of such Person or any combination
thereof.
"Subsidiary Guarantor" means each Subsidiary of the Company party to
the Subsidiary Guaranty, Pegasus Asia (with respect to the Obligations (other
than in respect of Acquisition Loans) of the Canadian Borrower, and any other
guaranty of all or part of the Obligations.
"Subsidiary Guaranty" means the Guaranty dated as of the Closing
Date duly executed and delivered to the Agent by the Pegasus Benelux and Pegasus
Coordination substantially in the form of Exhibit Q hereto, as the same may be
amended, supplemented or otherwise modified from time to time.
"Subsidiary Investment Basket" means, for any Fiscal Year, an amount
equal to (i) $2,000,000, plus (ii) the Unused Stock Proceeds Carryover Amount as
of the last day of the immediately preceding Fiscal Year, plus (iii) fifty
percent (50%) of the aggregate amount of Net Cash Proceeds received by Holdings
-47-
in connection with the sale of its Capital Stock (after March 31, 1996) during
the then current Fiscal Year. For purposes of this definition "Unused Stock
Proceeds Carryover Amount" means, as of the last day of any Fiscal Year during
the term of this Agreement, (i) fifty percent (50%) of the aggregate amount of
Net Cash Proceeds received by Holdings in connection with the sale of its
Capital Stock (after March 31, 1996) as of such date, minus (ii) for such Fiscal
Year and each preceding Fiscal Year during the term of this Agreement, an amount
equal to the excess, if any, of (1) all intercompany loans to, Investments in
and capitalizations of Subsidiaries of the Company (other than Borrowers) made
during such Fiscal Year (or such preceding Fiscal Year) over (2) $2,000,000
(except as otherwise permitted by this Agreement). For purposes of this
calculation, the term of this Agreement shall be deemed to include all of Fiscal
Year 1996.
"Subsidiary Security Agreements" means (i) the Security Agreement
dated as of the Closing Date duly executed and delivered to the Agent by Pegasus
Benelux and (ii) the Security Agreement dated as of the Closing Date duly
executed and delivered to the Agent by Pegasus Coordination, in each case in
substantially the form of Exhibit R hereto, as the same may be amended,
supplemented or otherwise modified from time to time.
"Swing Loan" is defined in Section 2.01(b).
"Swing Loan Banks" means, collectively, the U.S. Swing Loan Bank,
the Multicurrency Swing Loan Bank and the Canadian Swing Loan Bank.
"Taxes" is defined in Section 3.03(a).
"Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of any Borrower or any ERISA Affiliate from a
Benefit Plan during a plan year in which such Borrower or such ERISA Affiliate
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA; (iii)
the imposition of an obligation on any Borrower or any ERISA Affiliate under
Section 4041 of ERISA to provide affected parties written notice of intent to
terminate a Benefit Plan in a distress termination described in Section 4041(c)
of ERISA; (iv) the institution by the PBGC or any similar foreign Governmental
Authority of proceedings to terminate a Benefit Plan or a Foreign Pension Plan;
(v) any event or condition which would reasonably constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan; (vi) a foreign Governmental Authority shall
appoint or institute proceedings to appoint a trustee to administer any Foreign
Pension Plan; or (vii) the partial or complete withdrawal of any Borrower or any
ERISA Affiliate from a Multiemployer Plan or a Foreign Pension Plan.
"Transaction Costs" means the fees, costs and expenses
-48-
payable by the Borrowers in connection with the execution, delivery and
performance of the Loan Documents and the Acquisition Documents.
"Transaction Documents" means the Loan Documents, the Acquisition
Documents, the Finova Documents and all other agreements or instruments executed
and delivered or to be executed and delivered pursuant hereto or thereto or in
connection herewith or therewith or any of the transactions contemplated hereby
or thereby.
"Uniform Commercial Code" means the Uniform Commercial Code as
enacted in the State of New York, as it may be amended from time to time.
"Unused Commitment Fee" is defined in Section 4.03(b).
"U.S. Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall at
all times be equal to the highest of:
(i) the rate of interest announced publicly by Citibank in New York,
New York from time to time, as Citibank's base rate; and
(ii) the sum (adjusted to the nearest one quarter of one percent
(0.25%) or, if there is no nearest one quarter of one percent (0.25%), to
the next higher one quarter of one percent (0.25%)) of (A) one half of one
percent (0.50%) per annum plus (B) the rate per annum obtained by dividing
(1) the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of
deposit of major United States money market banks, such three-week moving
average being determined weekly on each Monday (or, if such day is not a
Business Day, on the next succeeding Business Day) for the three-week
period ending on the previous Friday (or, if such day is not a Business
Day, on the next preceding Business Day) by Citibank on the basis of such
rates reported by certificate of deposit dealers to, and published by, the
Federal Reserve Bank of New York, or, if such publication shall be
suspended or terminated, on the basis of quotations for such rates
received by Citibank from three (3) New York certificate of deposit
dealers of recognized standing selected by Citibank, by (2) a percentage
equal to 100% minus the average of the daily percentages specified during
such three-week period by the Federal Reserve Board for determining the
maximum reserve requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for Citibank in
respect of liabilities consisting of or including (among other
liabilities) three-month Dollar nonpersonal time deposits in the United
States,
-49-
plus (C) the average during such three-week period of the annual
assessment rates estimated by Citibank for determin ing the then current
annual assessment payable by Citibank to the Federal Deposit Insurance
Corporation (or any successor) for insuring Dollar deposits of Citibank in
the United States.
"U.S. Cash Collateral Account" means account number 4068-9578
maintained with Citibank in New York, New York (i) into which, subject to the
provisions of Section 3.05, funds from the U.S. Concentration Accounts shall be
transferred and invested and (ii) from which, subject to the provisions of
Section 3.05, funds will be transferred to the U.S. Concentration Accounts.
"U.S. Commitment" means, as to each U.S. Lender, the commitment of
such U.S. Lender to make U.S. Loans to, and participate in Letters of Credit
Issued for the account of, the Domestic Borrowers in the aggregate principal
amount outstanding not to exceed the amount on the Closing Date set forth
opposite such U.S. Lender's name on Schedule 1.01.1 under the caption "U.S.
Commitment", as such amount may be reduced or modified pursuant to this
Agreement; provided, however, at no time shall the aggregate U.S. Commitments of
all U.S. Lenders exceed $125,000,000 less any permanent reduction made pursuant
to Section 3.01.
"U.S. Concentration Account" means (i) with respect to the Company,
account number 4000-3644, (ii) with respect to Xxxxxxxxxx International, account
number 4069-1264 and (iii) with respect to Pegasus, account number 4069-1299, in
each case maintained with Citibank in New York, New York (x) into which, subject
to the provisions of Section 3.05, funds from such Borrower's U.S. Cash
Collateral Account shall be transferred and (y) from which, subject to the
provisions of Section 3.05, funds will be applied to the Obligations of such
Borrower.
"U.S. Facility" means the facility provided by the U.S. Lenders to
make U.S. Loans to, and to Issue Letters of Credit for the account of, the
Domestic Borrowers, in each case in accordance with the terms and conditions
contained in this Agreement.
"U.S. Issuing Banks" means Citibank and each other Lender (or
Affiliate of a Lender) approved by the Agent and the Company who has agreed to
become an Issuing Bank for the purpose of issuing Letters of Credit under the
U.S. Facility pursuant to Section 2.02.
"U.S. Lenders" means the Lenders designated as such on Schedule
1.01.1 under the caption "U.S. Commitment" and each other institution which is
party hereto as a U.S. Lender pursuant to an Assignment and Acceptance.
-50-
"U.S. LIBO Rate" means, with respect to any Interest Period
applicable to a Borrowing of Fixed Rate Loans under the U.S. Facility
denominated in Dollars, the interest rate per annum obtained by dividing:
(i) an interest rate per annum determined by the Agent to be the
average (rounded upward to the nearest whole multiple of one-sixteenth of
one percent (0.0625%) per annum if such average is not such a multiple) of
the rates per annum at which deposits in Dollars are offered by the
principal office of Citibank in London, England to major banks in the
London interbank market at approximately 11:00 a.m. (London time) on the
Fixed Rate Determination Date for such Interest Period for a period equal
to such Interest Period and in an amount substantially equal to the amount
of Citicorp's Fixed Rate Loan and for a period equal to such Interest
Period, by
(ii) a percentage equal to (A) 100% minus (B) the U.S. LIBOR Reserve
Percentage in effect on the relevant Fixed Rate Determination Date. The
U.S. LIBO Rate shall be adjusted automatically on and as of the effective
date of any change in the U.S. LIBOR Reserve Percentage.
For purposes of this definition, "U.S. LIBOR Reserve Percentage" means, for any
day, that percentage which is in effect on such day, as prescribed by the
Federal Reserve Board for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in New
York, New York with deposits exceeding five billion Dollars in respect of
"Eurocurrency Liabilities" (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on Fixed Rate
Loans is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of any bank to United States
residents). The Agent shall provide to the Company, upon the reasonable request
of the Company, a reasonably detailed explanation of any U.S. LIBOR Reserve
Percentage used in the determination of the U.S. LIBO Rate.
"U.S. Loan" is defined in Section 2.01(a).
"U.S. Loan Notes" means one or more notes made payable to the U.S.
Lenders evidencing the Domestic Borrowers' Obligations to repay the U.S. Loans
made to such Borrowers.
"U.S. Swing Loan Bank" means Citicorp, in its individual capacity
or, in the event Citicorp is not the Agent, the Agent (or any Affiliate of the
Agent designated by the Agent), in its individual capacity. The U.S. Swing Loan
Bank may from time to time make in its sole discretion Swing Loans under the
U.S. Facility.
-51-
"Voting Stock" means, with respect to any Person, securities with
respect to any class or classes of Capital Stock of such Person entitling the
holders thereof (whether at all times or only so long as no senior class of
stock has voting power by reason of any contingency) to vote in the election of
members of the board of directors of such Person.
"Wholly Owned Subsidiary" means any direct, wholly owned Subsidiary
of the Company with respect to which the Agent has (i) a first priority Lien on
the Capital Stock of such Subsidiary and (ii) a first priority Lien (subject
only to Customary Permitted Liens) on the Receivables, Inventory and General
Intangibles of such Subsidiary, in each case as security for the Obligations.
1.02. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed. Any
period determined hereunder by reference to a month or months or year or years
shall end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, provided that if such period commences on the last day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month during which such period is to end), such period
shall, unless otherwise expressly required by the other provisions of this
Agreement, end on the last day of the calendar month.
1.03. Accounting Terms. Subject to Section 13.04, for purposes of
this Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP.
1.04. Other Definitional Provisions. References to the "preamble",
"Articles", "Sections", "subsections", "Schedules" and "Exhibits" shall be to
the preamble, Articles, Sections, subsections, Schedules and Exhibits,
respectively, of this Agreement unless otherwise specifically provided. The
words "hereof", "herein", and "hereunder" and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
1.05. Other Terms. All other terms contained herein shall, unless
the context indicates otherwise, have the meanings assigned to such terms by the
Uniform Commercial Code to the extent the same are defined therein.
1.06. Payments by the Borrowers. Except as expressly
-52-
set forth herein to the contrary, (a) all payments made by the Borrowers in
respect of principal and interest on the Loans made under any Credit Facility
shall be made (i) with respect to the U.S. Facility, in Dollars, (ii) with
respect to the Multicurrency Facility, in the Optional Currency in which such
Loan was made, and (iii) with respect to the Canadian Facility, in Canadian
Dollars and (b) all payments of Reimbursement Obligations shall be made in the
Available Currency in which the Letter of Credit under which such Reimbursement
Obligations arise is denominated.
-53-
ARTICLE II
AMOUNTS AND TERMS OF LOANS AND LETTERS OF CREDIT
2.01. The Revolving Credit Facility.
-54-
(a) Revolving Loans. Subject to the terms and conditions set forth
herein, (i) pursuant to the U.S. Commitments, each U.S. Lender hereby severally
and not jointly agrees to make revolving loans (each a "U.S. Loan") to the
Domestic Borrowers from time to time on any Business Day during the period from
the Closing Date to the Revolving Credit Termination Date, in an aggregate
amount not to exceed at any time outstanding such U.S. Lender's Pro Rata Share
of the Revolving Credit Availability under the U.S. Facility at such time,
provided, however, at no time shall the aggregate Revolving Credit Obligations
owed by the Domestic Borrowers under the U.S. Facility exceed the Maximum
Revolving Credit Amount for the U.S. Facility at such time, (ii) pursuant to the
Multicurrency Commitments, each Multicurrency Lender hereby severally and not
jointly agrees to make revolving loans (each a "Multicurrency Loan") to the
Multicurrency Borrower from time to time on any Business Day during the period
from the Closing Date to the Revolving Credit Termination Date, in an aggregate
amount (converted to the Dollar Equivalent thereof) not to exceed at any time
outstanding such Multicurrency Lender's Pro Rata Share of the Revolving Credit
Availability under the Multicurrency Facility at such time, provided, however,
at no time shall the aggregate Revolving Credit Obligations owed by the
Multicurrency Borrower under the Multicurrency Facility exceed the Maximum
Revolving Credit Amount for the Multicurrency Facility at such time, and (iii)
pursuant to the Canadian Commitments, each Canadian Lender hereby severally and
not jointly agrees to make revolving loans (each a "Canadian Loan" and, together
with the U.S. Loans and the Multicurrency Loans, the "Revolving Loans") to the
Canadian Borrower from time to time on any Business Day during the period from
the Closing Date to the Revolving Credit Termination Date, in an aggregate
amount (converted to the Dollar Equivalent thereof) not to exceed at any time
outstanding such Canadian Lender's Pro Rata Share of the Revolving Credit
Availability under the Canadian Facility at such time, provided, however, at no
time shall the aggregate Revolving Credit Obligations owed by the Canadian
Borrower exceed the Maximum Revolving Credit Amount for the Canadian Facility at
such time. All Revolving Loans comprising the same Borrowing hereunder shall be
made by the U.S. Lenders, the Multicurrency Lenders or the Canadian Lenders, as
the case may be, simultaneously and proportionately to their then respective Pro
Rata Shares of the applicable Credit Facility. Subject to the provisions hereof,
any Borrower may repay any outstanding Revolving Loan on any day which is a
Business Day and any amounts so repaid may be reborrowed, up to the amount
available under this Section 2.01(a) at the time of such Borrowing, until the
Revolving Credit Termination Date. Each Borrowing of U.S. Loans shall be in
Dollars, each Borrowing of Multicurrency Loans shall be denominated in a single
Optional Currency and each Borrowing of Canadian Loans shall be in Canadian
Dollars. Each Borrowing of Multicurrency Loans shall be in an aggregate minimum
amount of the Dollar Equivalent of $500,000 for Floating Rate Loans (and in
-55-
approximately similar intervals in the applicable Optional Currency in excess
thereof) and $1,000,000 for Fixed Rate Loans (and in approximately similar
intervals in the applicable Optional Currency in excess thereof). The
Multicurrency Borrower shall not request Borrowings of Multicurrency Loans on
more than two (2) Business Days during any calendar week (it being agreed and
understood that the Multicurrency Borrower may request more than one Borrowing
on any such Business Day) and shall not request Borrowings in any Optional
Currency if, after giving effect to such Borrowing, the aggregate Dollar
Equivalent principal amount of all outstanding Multicurrency Loans denominated
in such Optional Currency would be $20,000,000. Borrowings under the U.S.
Facility and the Canadian Facility shall not be subject to a minimum amount;
provided, that Borrowings of Fixed Rate Loans under the U.S. Facility shall be
in the amounts specified in Section 4.02(a).
(b) Swing Loans. With respect to each Credit Facility, the relevant
Swing Loan Bank may, in its sole discretion, make to the Borrower or Borrowers
to whom the Revolving Loans under such Credit Facility are available loans (each
a "Swing Loan") from time to time on any Business Day during the period from the
Closing Date to the Revolving Credit Termination Date, in an aggregate amount
not to exceed at any time the Dollar Equivalent of such Swing Loan Bank's Pro
Rata Share of the Revolving Credit Availability under such Credit Facility at
such time. In addition to the foregoing, the Swing Loan Bank under any Credit
Facility may in its sole discretion permit to be outstanding at any time
additional Swing Loans in excess of the amount of all such Loans permitted to be
made pursuant to the preceding sentence in an aggregate Dollar Equivalent
principal amount not to exceed the lesser of (i) $10,000,000 and (ii) the
Revolving Credit Availability for such Credit Facility at such time. All Swing
Loans made under any Credit Facility shall be made as Floating Rate Loans and
shall be available in the same currencies as Revolving Loans made under such
Credit Facility. Except as otherwise provided herein, all Swing Loans shall be
subject to all the terms and conditions applicable to Revolving Loans. Swing
Loans shall be repaid pursuant to the terms of Section 2.01(f) or as otherwise
provided in this Agreement.
(c) Notice of Borrowing in Respect of Loans under the Revolving
Credit Facility. When a Borrower desires to make a Borrowing under this Section
2.01, it shall deliver to the Agent in a manner specified in Section 13.08 a
signed Notice of Borrowing no later than (i) (A) 12:00 p.m. (New York time) on
the proposed Funding Date for such Borrowing, in the case of a proposed
Borrowing of U.S. Loans consisting of Floating Rate Loans and (B) 12:00 p.m.
(New York time) at least three (3) Business Days in advance of the proposed
Funding Date for such Borrowing, in the case of a proposed Borrowing of U.S.
Loans consisting of Fixed Rate Loans, (ii) 11:00 a.m. (London time) at
-56-
least two (2) Business Days in advance of the proposed Funding Date for such
Borrowing, in the case of a proposed Borrowing of Multicurrency Loans consisting
of Floating Rate Loans or Fixed Rate Loans, or (iii) 11:00 a.m. (Toronto time)
at least one (1) Business Day in advance of the proposed Funding Date for such
Borrowing, in the case of a proposed Borrowing of Canadian Loans.
Any such Notice of Borrowing shall be irrevocable and shall first constitute a
request by such Borrower to borrow Swing Loans under the applicable Credit
Facility (other than a request for a Fixed Rate Loan); provided, however, in the
event the Agent after consultation with the relevant Swing Loan Bank determines
that a Borrowing of Swing Loans is not possible or feasible, such Notice of
Borrowing shall constitute a request, as of the time such Notice of Borrowing
was originally submitted, by such Borrower to borrow Revolving Loans under such
Credit Facility; provided, further, however, all Notices of Borrowing with
respect to Fixed Rate Loans shall constitute a request by such Borrower to
borrow Revolving Loans under the U.S. Facility or the Multicurrency Facility, as
the case may be. All Loans made under this Section 2.01 on the Closing Date
shall be made initially as Floating Rate Loans and may thereafter be continued
as Floating Rate Loans or, except in the case of Canadian Loans, converted into
Fixed Rate Loans in the manner provided in Section 4.01(c). In the case of a
Notice of Borrowing delivered in connection with a proposed Borrowing of
Multicurrency Loans or Canadian Loans, the relevant Borrower shall request,
within one-half hour prior to the issuance of such Notice of Borrowing, the
advice of the Agent as to the Dollar Equivalent of the amount of such Borrowing,
and such Borrower shall specify such amount in such Notice of Borrowing,
provided that such advice shall not be deemed to be a prediction or guaranty of
the Dollar Equivalent of such amount after the Notice of Borrowing is submitted
and shall in no way limit the Borrowers' Obligations under this Agreement due to
fluctuations in the applicable Available Currency.
(d) Making of Swing Loans. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.01(c), the applicable Swing Loan Bank shall
deposit in immediately available funds the amount it intends to fund, if any, in
respect of the Loans requested in such Notice of Borrowing with the Agent (i) at
its office in New York, New York not later than 3:00 p.m. (New York time) on the
Funding Date, in the case of a proposed Borrowing of U.S. Loans, (ii) at its
office in London, England not later than 3:00 p.m. (London time) on the Funding
Date, in the case of a proposed Borrowing of Multicurrency Loans, or (iii) at
its office in Toronto, Canada not later than 3:00 p.m. (Toronto time) on the
Funding Date, in the case of a proposed Borrowing of Canadian Loans. No Swing
Loan Bank shall make any Swing Loan in the period commencing on the first
Business Day after it receives written notice from any Lender that one or more
of the conditions precedent contained in Section 5.02 shall not on such date be
satisfied, and ending when such conditions are satisfied, and no Swing Loan Bank
shall otherwise be required to determine that, or
-57-
take notice whether, the conditions precedent set forth in Section 5.02 hereof
have been satisfied in connection with the making of any Swing Loan. Subject to
the preceding sentence, the Agent shall make such proceeds of each funding of a
Swing Loan available to the relevant Borrower at the Agent's office in New York,
New York, London, England, or Toronto, Canada, as applicable, on the Funding
Date of the proposed Borrowing and shall disburse such proceeds to the
Disbursement Account referred to in the applicable Notice of Borrowing. If the
applicable Swing Loan Bank receives a Notice of Borrowing within the applicable
time limits set forth in Section 2.01(c) and does not intend to fund such
requested Borrowing as a Swing Loan, the Swing Loan Bank will promptly notify
the Agent (to the extent the Swing Loan Bank and the Agent are not the same
Person) of such intention, and no delay by the Swing Loan Bank shall impair the
applicable Borrower's right to borrow Revolving Loans under this Section 2.01.
(e) Making of Revolving Loans. (i) In the event any portion of the
Loans requested in any Notice of Borrowing delivered to the Agent pursuant
Section 2.01(c) will be made as Revolving Loans, the Agent shall promptly notify
each Lender under the applicable Credit Facility of the amount of such Borrowing
of Revolving Loans. Each such Lender shall deposit an amount equal to its Pro
Rata Share under such Credit Facility of the amount of such Borrowing with the
Agent in the applicable Payment Account in immediately available funds and in
the appropriate currency, not later than 3:00 p.m. (New York time or Toronto
time) or 12:00 noon (London time), as applicable, on any Funding Date applicable
thereto (or, if the Funding Date is the Closing Date, such earlier time as the
Agent shall determine). Subject to the fulfillment of the conditions precedent
set forth in Section 5.01 (solely with respect to the making of Revolving Loans
on the Closing Date) or Section 5.02, the Agent shall make the proceeds of such
amounts received by it available to the applicable Borrower at the Agent's
office in New York, New York, London, England, or Toronto, Canada, as
appropriate, on such Funding Date (or as soon thereafter as is customarily
practicable) and shall disburse such proceeds to the Disbursement Account
referred to in the applicable Notice of Borrowing.
(ii) The failure of any Lender to deposit the amount described
in clause (i) above (or required to be paid pursuant to Section 2.01(f)) with
the Agent on the applicable Funding Date shall not relieve any other Lender of
its obligations hereunder to make its Revolving Loan on such Funding Date. No
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make a Revolving Loan hereunder nor shall the U.S. Commitment,
Multicurrency Commitment or Canadian Commitment of any Lender be increased or
decreased as a result of any such failure.
(iii) Unless the Agent shall have been notified by
-58-
any Lender prior to 2:00 p.m. (New York time or Toronto time) or 11:00 a.m.
(London time), as applicable, on any applicable Funding Date in respect of any
Borrowing of Revolving Loans after the Closing Date that such Lender does not
intend to fund its Loan requested to be made on such Funding Date, the Agent may
assume that such Lender has funded its Revolving Loan and is depositing the
proceeds thereof in the applicable Payment Account on the Funding Date, and the
Agent in its sole discretion may, but shall not be obligated to, disburse a
corresponding amount to the applicable Borrower on the Funding Date. If the
Revolving Loan proceeds corresponding to that amount are advanced to such
Borrower by the Agent but are not in fact deposited with the Agent by such
Lender on or prior to the applicable Funding Date, such Lender agrees to pay,
and in addition such Borrower agrees to repay, to the Agent forthwith on demand
such corresponding amount, together with interest thereon, for each day from the
date such amount is disbursed to or for the benefit of such Borrower until the
date such amount is paid or repaid to the Agent, (A) in the case of such
Borrower, at the interest rate applicable to such Borrowing and (B) in the case
of such Lender, at the Interbank Rate for the first Business Day, and thereafter
at the interest rate applicable to such Borrowing. If such Lender shall pay to
the Agent the corresponding amount, the amount so paid shall constitute such
Lender's Revolving Loan, and if both such Lender and such Borrower shall pay and
repay such corresponding amount, the Agent shall promptly pay to such Borrower
such corresponding amount (together with any interest included in such payment).
This Section 2.01(e)(iii) does not relieve any Lender of its obligation to make
its Revolving Loan on any Funding Date.
-59-
(iv) Anything hereinabove to the contrary notwithstanding, if
any Multicurrency Lender shall, not later than 2:00 p.m. (London time) one
Business Day before the date of any requested Borrowing of Multicurrency Loans,
notify the Agent that such Lender is not satisfied that deposits in the relevant
Optional Currency will be freely available to it in the relevant amount and, if
applicable, for the relevant Interest Period, the right of the Multicurrency
Borrower to request Multicurrency Loans in such Optional Currency from such
Lender as part of such Borrowing or any subsequent Borrowing of Multicurrency
Loans shall be suspended until such Lender shall notify the Agent that the
circumstances causing such suspension no longer exist, and, at the option of the
Multicurrency Borrower, the Multicurrency Loan to be made by such Lender as part
of such Borrowing (and the Multicurrency Loan to be made by such Lender as part
of any subsequent Borrowing of Multicurrency Loans in respect of which such
Optional Currency shall have been requested during such period of suspension)
shall be denominated in any other Available Currency requested on the same
Business Day which is available or, in Pounds if no such currency has been
requested or is available, and having a Interest Period coextensive with the
Interest Period in effect in respect of all other Multicurrency Loans comprising
a part of such Borrowing. The Agent shall, upon becoming aware that the
circumstances causing any such suspension no longer apply, promptly so notify
the Multicurrency Borrower, provided that the failure of the Agent to so notify
the Multicurrency Borrower shall not impair the rights of the Lenders under this
Section 2.01(e)(iv) or expose the Agent to any liability.
(f) Settlement of Swing Loans. (i) The Agent shall from time to time
notify (x) each U.S. Lender by 12:00 noon (New York time), (y) each
Multicurrency Lender by 12:00 noon (London time), and (z) each Canadian Lender
by 12:00 noon (Toronto time), in each case on a date to be selected weekly or
more frequently by the Agent, in its sole discretion, of the aggregate principal
amount of Swing Loans outstanding under the relevant Credit Facility (and the
currency in which such Swing Loans are denominated) as of the close of business
on the Business Day immediately preceding the date of such notice (each such
Business Day being a "Settlement Date" in respect of such Credit Facility). Upon
such notice, each U.S. Lender, Multicurrency Lender or Canadian Lender, as the
case may be, shall deposit in the applicable Payment Account in the appropriate
currency an amount equal to its Pro Rata Share under the applicable Credit
Facility of the amount of such principal amount of Swing Loans outstanding in
such currency in immediately available funds, not later than 3:00 p.m. (New York
time, London time or Toronto time, as appropriate) on the date of such notice.
Upon such payment, each Lender shall be deemed to have made a Revolving Loan
denominated in such currency to the applicable Borrower or Borrowers in such
amount (irrespective of the satisfaction of the conditions in Section 5.02).
-60-
(ii) In the event that no Swing Loans with respect to a
particular Credit Facility are outstanding on any Settlement Date in any
currency, the Agent shall, before 3:00 p.m. (New York time, London time or
Toronto time, as applicable) on such Settlement Date, disburse to each Lender
such Lender's Pro Rata Share under such Credit Facility of the funds in such
currency, if any, on deposit in the applicable Payment Account applicable to the
repayment of the Revolving Loans under such Credit Facility denominated in such
currency.
(iii) If and to the extent any Lender under any Credit Facility
shall not have made available to the Agent on any Settlement Date with respect
to such Credit Facility any amount payable by such Lender on such Settlement
Date pursuant to this Section 2.01(f), such Lender agrees to pay to the Agent
forthwith on demand such amount in the applicable currency together with
interest thereon, for each day from such Settlement Date until the date such
amount is paid to the Agent, for three (3) Business Days at the Interbank Rate
and thereafter at the interest rate applicable to the Loans denominated in such
currency hereunder.
(g) Use of Proceeds. Proceeds of Loans shall be used through
dividends to Holdings (i) in an aggregate amount of up to $100,000,000 on the
Closing Date to finance the transactions contemplated by the Transaction
Documents and to pay Transaction Costs and (ii) to fund purchase price
adjustments, if any, after the Closing Date pursuant to the Acquisition
Agreement. Proceeds of U.S. Loans and of Swing Loans under the U.S. Facility
shall be used to provide for ongoing working capital needs in the ordinary
course of the business of the Company and its Subsidiaries and for other lawful
general corporate purposes not prohibited hereunder. Proceeds of Multicurrency
Loans and of Swing Loans under the Multicurrency Facility shall be used to
provide for ongoing working capital needs in the ordinary course of the business
of the Multicurrency Borrower and its Subsidiaries and for other lawful general
corporate purposes not prohibited hereunder. Proceeds of the Canadian Loans and
of Swing Loans under the Canadian Facility shall be used to provide for ongoing
working capital needs in the ordinary course of the business of the Canadian
Borrower and its Subsidiaries and for other lawful general corporate purposes of
the Canadian Borrower and its Subsidiaries not prohibited hereunder.
(h) Revolving Credit Termination Date. The Revolving Credit
Commitments shall terminate, and all outstanding Revolving Credit Obligations
shall be Paid In Full, on the Revolving Credit Termination Date.
2.02. Letters of Credit. Subject to the terms and conditions set
forth herein, (x) each U.S. Issuing Bank hereby severally agrees to Issue for
the account of any Domestic Borrower one or more Letters of Credit, up to an
aggregate face
-61-
amount at any one time outstanding for all Domestic Borrowers equal to the
Letter of Credit Availability of the Domestic Borrowers and (y) each Canadian
Issuing Bank hereby severally agrees to Issue for the account of the Canadian
Borrower one or more Letters of Credit, up to an aggregate face amount at any
one time outstanding equal to the Letter of Credit Availability of the Canadian
Borrower, subject, in each case, to the following provisions:
(a) Types and Amounts. An Issuing Bank shall not have any obligation
to Issue, and shall not, except as otherwise agreed by the Requisite Lenders and
Issuing Bank (except with respect to any notification received by an Issuing
Bank pursuant to Section 2.02(a)(ii)(A), which shall require the agreement of
all of the Lenders and the Issuing Bank), Issue any Letter of Credit at any
time:
(i) if the aggregate Letter of Credit Obligations with respect to
such Issuing Bank, after giving effect to the Issuance of the Letter of
Credit requested hereunder, shall exceed any limit imposed by law or
regulation upon such Issuing Bank;
(ii) if the Issuing Bank receives notice (A) from the Agent at or
before 11:00 a.m. (New York or Toronto time) on the date of the proposed
Issuance of such Letter of Credit that, immediately after giving effect to
the Issuance of such Letter of Credit, the Revolving Credit Obligations in
respect of the U.S. Facility or the Canadian Facility, as applicable, at
such time would exceed the Maximum Revolving Credit Amount for such Credit
Facility or (B) from any of the Lenders at or before 11:00 a.m. (New York
or Toronto time) on the date of the proposed Issuance of such Letter of
Credit that one or more of the conditions precedent con tained in Sections
5.01 (solely with respect to an Issuance of a Letter of Credit on the
Closing Date) or 5.02 would not on such date be satisfied (or waived
pursuant to Section 13.07), unless such conditions are thereafter
satisfied or waived and notice of such satisfaction or waiver is given to
the Issuing Bank by the Agent (and an Issuing Bank shall not otherwise be
required to determine that, or take notice whether, the conditions
precedent set forth in Sections 5.01 or 5.02, as applicable, have been
satisfied or waived);
(iii) which has an expiration date later than the earlier of (A) the
date one (1) year after the date of Issuance or (B) the Business Day next
preceding the Revolving Credit Termination Date, provided that it is
agreed and understood that notwithstanding the termination of any Letter
of Credit pursuant to its terms, the beneficiary under such Letter of
Credit may, in accordance with applicable law, continue to make drawings
thereunder; or
-62-
(iv) which is in a currency other than (A) an Available Currency with
respect to Letters of Credit requested by the Domestic Borrowers and (B)
Dollars or Canadian Dollars with respect to Letters of Credit requested by
the Canadian Borrower; or
(v) the Issuance and terms of which is governed by the laws of any
jurisdiction other than the United States, Canada, the United Kingdom,
France or any other jurisdiction which is approved by the Agent and the
applicable Issuing Bank.
(b) Conditions. In addition to being subject to the satisfaction of
the conditions precedent contained in Sections 5.01 (solely with respect to an
Issuance of a Letter of Credit on the Closing Date) and 5.02, the obligation of
an Issuing Bank to Issue any Letter of Credit is subject to the satisfaction in
full of the following conditions:
(i) if the Issuing Bank so requests, the applicable Borrower shall
have executed and delivered to such Issuing Bank and the Agent a Letter of
Credit Reimbursement Agreement and such other documents and materials as
may be required pursuant to the terms thereof; and
(ii) the terms of the proposed Letter of Credit shall conform to the
customary terms of letters of credit issued by the Issuing Bank.
(c) Issuance of Letters of Credit. (i) A Borrower shall deliver to
the applicable Issuing Bank and the Agent in a manner specified in Section 13.08
a signed Notice of Letter of Credit Issuance not later than 11:00 a.m. (New York
or Toronto time) on the third Business Day preceding the requested date for
Issuance of a Letter of Credit hereunder, or such shorter notice as may be
acceptable to such Issuing Bank and the Agent. Such notice shall be irrevocable.
(ii) The Issuing Bank shall give the Agent written notice, or
telephonic notice confirmed promptly thereafter in writing, of the Issuance of a
Letter of Credit.
(d) Reimbursement Obligations; Duties of Issuing Banks. (i)
Notwithstanding any provision to the contrary in any Letter of Credit
Reimbursement Agreement:
(A) each Borrower for whose account a Letter of Credit has been
Issued agrees to reimburse the applicable Issuing Bank in the applicable
currency for amounts drawn under such Letter of Credit pursuant to
subsection (e)(ii) below, no later than the date (the
-63-
"Reimbursement Date") which is one (1) Business Day after such Borrower
receives written notice from the Issuing Bank that payment has been made
under such Letter of Credit by the Issuing Bank; and
(B) all Reimbursement Obligations with respect to any Letter of
Credit shall bear interest at the Floating Rate applicable to the currency
in which such Letter of Credit was Issued plus the Applicable Floating
Rate Margin from the date of the relevant drawing under such Letter of
Credit until the Reimbursement Date and thereafter at the rate applicable
in accordance with Section 4.01(d).
(ii) The Issuing Bank shall give the Agent written notice, or
telephonic notice confirmed promptly thereafter in writing, of all drawings
under a Letter of Credit and the payment (or the failure to pay when due) by the
Borrowers on account of a Reimbursement Obligation.
(iii) No action taken or omitted in good faith by an Issuing Bank under
or in connection with any Letter of Credit (except for any such action resulting
from the gross negligence or wilful misconduct of such Issuing Bank) shall put
such Issuing Bank under any resulting liability to any Lender, any Borrower or,
so long as such Letter of Credit is not Issued in violation of Section 2.02(a),
relieve any Lender of its obligations hereunder to such Issuing Bank. In
determining whether to pay under any Letter of Credit, the respective Issuing
Bank shall have no obligation to the Lenders or any Borrower other than to
confirm that any documents required to be delivered under a respective Letter of
Credit appear to have been delivered by the appropriate Person and that they
appear on their face to comply with the requirements of such Letter of Credit.
(e) Participations. (i) Immediately upon Issuance by an Issuing Bank
of any Letter of Credit under the U.S. Facility or the Canadian Facility, as
applicable, for the account of any Borrower under such Credit Facility in
accordance with the procedures set forth in this Section 2.02, each Lender
holding a Revolving Credit Commitment in such Credit Facility shall be deemed to
have irrevocably and unconditionally purchased and received from that Issuing
Bank, without recourse or warranty, an undivided interest and participation in
such Letter of Credit to the extent of such Lender's Pro Rata Share under such
Credit Facility, including, without limitation, all obligations of such Borrower
with respect thereto (other than amounts owing to the Issuing Bank under Section
2.02(g)) and any security therefor and guaranty pertaining thereto.
(ii) If any Issuing Bank makes any payment under any Letter of Credit
for the account of any Borrower and such Borrower does not repay such amount to
the Issuing Bank on the
-64-
Reimbursement Date, the Issuing Bank shall promptly notify the Agent, which
shall notify the U.S. Swing Loan Bank or the Canadian Swing Loan Bank, as
applicable, and if such Swing Loan Bank so elects, a Swing Loan under the
applicable Credit Facility can be made in such amount (or the Dollar Equivalent
of such amount (plus reasonable foreign exchange costs) if such Letter of Credit
is in an Available Currency other than Dollars (in the case of the U.S.
Facility) or is in Dollars (in the case of the Canadian Facility)), the proceeds
of which (less such foreign exchange costs) shall be paid to the Agent for the
account of such Issuing Bank, in immediately available funds, and the Agent
shall promptly pay such proceeds to the Issuing Bank. In the event such Issuing
Bank cannot be so paid from proceeds of a Swing Loan, the Agent shall promptly
notify each Lender under such Credit Facility, and each Lender shall promptly
and unconditionally pay to the Agent for the account of such Issuing Bank, in
immediately available funds, the amount (or the Dollar Equivalent of such amount
(plus reasonable foreign exchange costs) if such Letter of Credit is in an
Available Currency other than Dollars (in the case of the U.S. Facility) or is
in Dollars (in the case of the Canadian Facility)) of such Lender's Pro Rata
Share under the applicable Credit Facility of the payment made by such Issuing
Bank, and the Agent shall promptly pay to the Issuing Bank such amounts (less
such foreign exchange costs) received by it. In the event such payments are made
by such Lenders, such payments shall constitute Revolving Loans made to the
applicable Borrower under the applicable Credit Facility pursuant to Section
2.01 (irrespective of the satisfaction of the conditions in Section 5.02). If a
Lender does not make its Pro Rata Share under the applicable Credit Facility of
the amount of any such payment available to the Agent, such Lender agrees to pay
to the Agent for the account of the Issuing Bank, forthwith on demand, such
amount together with interest thereon, for the first Business Day after the date
such payment was first due at the applicable Interbank Rate, and thereafter at
the interest rate then applicable in accordance with Section 4.01(a). The
failure of any such Lender to make available to the Agent for the account of an
Issuing Bank its Pro Rata Share under the applicable Credit Facility of any such
payment shall neither relieve any other Lender of its obligation hereunder to
make available to the Agent for the account of such Issuing Bank such other
Lender's Pro Rata Share under the applicable Credit Facility of any payment on
the date such payment is to be made nor increase the obligation of any other
Lender to make such payment to the Agent. This Section does not relieve any
Borrower of its obligation to pay or repay any Lender funding its Pro Rata Share
of such payment pursuant to this Section interest on the amount of such payment
from such date such payment is to be made until the date on which payment is
repaid in full.
(iii) Whenever an Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, as to which any Swing
Loan Bank has made a Swing Loan or
-65-
any Lender has made a Revolving Loan pursuant to Section 2.02(e)(ii), such
Issuing Bank shall promptly pay to the Agent such payment in accordance with
Section 3.02.
(iv) Upon the request of any Lender under the applicable Credit
Facility, an Issuing Bank shall furnish such Lender copies of any Letter of
Credit or Letter of Credit Reimbursement Agreement to which such Issuing Bank is
party and such other documentation as reasonably may be requested by such
Lender.
(v) The obligations of any Lender to make payments to the Agent for
the account of any Issuing Bank with respect to a Letter of Credit shall be
irrevocable, shall not be subject to any qualification or exception whatsoever
(except the Issuance of the Letter of Credit in contravention of this Section
2.02) and shall be made in accordance with this Agreement (irrespective of the
satisfaction of the conditions described in Sections 5.01 and 5.02) under all
circumstances, including, without limitation, any of the following
circumstances:
(A) any lack of validity or enforceability hereof or of any of the
other Loan Documents;
(B) the existence of any claim, setoff, defense or other right which
any Borrower may have at any time against a beneficiary named in a Letter
of Credit or any transferee of a beneficiary named in a Letter of Credit
(or any Person for whom any such transferee may be acting), the Agent, any
Issuing Bank, any Lender, or any other Person, whether in connection
herewith, with any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transactions
between the account party and beneficiary named in any Letter of Credit);
(C) any draft, certificate or any other document presented under the
Letter of Credit having been deter mined to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(D) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents;
(E) any failure by such Issuing Bank to make any reports required
pursuant to Section 2.02(h) or the inaccuracy of any such report; or
(F) the occurrence of any Event of Default or Default.
-66-
(f) Payment of Reimbursement Obligations. (i) Each Borrower for
whose account a Letter of Credit has been Issued unconditionally agrees to pay
to each Issuing Bank the amount of all Reimbursement Obligations, interest and
other amounts payable to such Issuing Bank under or in connection with such
Letter of Credit when such amounts are due and payable, irrespective of any
claim, setoff, defense or other right which such Borrower may have at any time
against such Issuing Bank or any other Person.
(ii) In the event any payment by a Borrower received by an Issuing
Bank with respect to a Letter of Credit Issued for the account of such Borrower
and distributed by the Agent to the Lenders under the applicable Credit Facility
on account of their participation is thereafter set aside, avoided or recovered
from such Issuing Bank in connection with any receivership, liquida tion or
bankruptcy proceeding, each such Lender which received such distribution shall,
upon demand by such Issuing Bank, contribute such Lender's Pro Rata Share under
such Credit Facility of the amount set aside, avoided or recovered together with
interest at the rate required to be paid by such Issuing Bank upon the amount
required to be repaid by it.
(g) Issuing Bank Charges. Each Borrower for whose account a Letter
of Credit has been Issued agrees to pay to each Issuing Bank, solely for its own
account, the standard charges assessed by such Issuing Bank in connection with
the issuance, administration, amendment and payment or cancellation of such
Letter of Credit.
(h) Issuing Bank Reporting Requirements. Each Issuing Bank shall, on
the day it Issues such a Letter of Credit, provide to the Agent and the
applicable Borrower separate schedules for Commercial Letters of Credit and
Standby Letters of Credit Issued by it, in form and substance reasonably
satisfactory to the Agent, setting forth the aggregate Letter of Credit
Obligations of each Borrower under the applicable Credit Facility outstanding to
it as of such date and any information requested by the Agent or such Borrowers
relating to the date of issue, account party, amount, expiration date and
reference number of each Letter of Credit Issued by it. On each Settlement Date,
the Agent shall provide to each Lender under the applicable Credit Facility
copies of the most recent schedules provided to it by each Issuing Bank under
such Credit Facility.
(i) Indemnification; Exoneration. (A) In addition to all other
amounts payable to an Issuing Bank, each Borrower for whose account such Issuing
Bank has Issued a Letter of Credit agrees to defend, indemnify, and save the
Agent, such Issuing Bank and each Lender under the applicable Credit Facility
harmless from and against any and all claims, demands, liabilities, penalties,
damages, losses (other than loss of profits), costs, charges and expenses
(including reasonable attorneys' fees but excluding taxes) which the Agent, such
-67-
Issuing Bank or such Lender may incur or be subject to as a consequence, direct
or indirect, of (i) the Issuance of such Letter of Credit other than as a result
of the gross negligence or willful misconduct of such Issuing Bank, as
determined by a court of competent jurisdiction, or (ii) the failure of such
Issuing Bank Issuing a Letter of Credit to honor a drawing under such Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental Authority.
(B) As between the Domestic Borrowers on the one hand and the Agent,
the U.S. Lenders and the U.S. Issuing Banks on the other hand, such Borrowers
assume all risks of the acts and omissions of, or misuse of Letters of Credit
by, the respective beneficiaries of the Letters of Credit Issued pursuant to the
U.S. Facility. As between the Canadian Borrower on the one hand and the Canadian
Agent, the Canadian Lenders and the Canadian Issuing Banks on the other hand,
the Canadian Borrower assumes all risks of the acts and omissions of, or misuse
of Letters of Credit by, the respective beneficiaries of the Letters of Credit
Issued pursuant to the Canadian Facility. In furtherance and not in limitation
of the foregoing, subject to the provisions of the Letter of Credit
Reimbursement Agreements, the Agent, the Issuing Banks and the Lenders shall not
be responsible for: (i) the form, validity, legality, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and Issuance of the Letters of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity, legality or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason;
(iii) failure of the beneficiary of a Letter of Credit to comply duly with
conditions required in order to draw upon such Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (vii) the misapplication
by the beneficiary of a Letter of Credit of the proceeds of any drawing under
such Letter of Credit; (viii) any litigation, proceeding or charges with respect
to such Letter of Credit; and (ix) any consequences arising from causes beyond
the control of the Agent, the Issuing Banks or the Lenders; except in the cases
of clauses (iii), (iv), (v), (vi), (viii) and (ix) above, for the gross
negligence or willful misconduct of the Issuing Bank, as determined in a
judgment by a court of competent jurisdiction.
-68-
(j) Obligations Several. The obligations of each Issuing Bank and
each U.S. Lender under this Section 2.02 are several and not joint, and no
Issuing Bank or U.S. Lender shall be responsible for the obligation to Issue
Letters of Credit or participation obligation hereunder, respectively, of any
other Issuing Bank or U.S. Lender.
2.03. Evidence of Indebtedness. Each Borrower hereby agrees to pay
when due the principal amount of each Loan which is made to it (whether or not
evidenced by a Note), and further agrees to pay all unpaid interest accrued
thereon, in accordance with the terms hereof and, to the extent evidenced
thereby, of the Notes. On the Closing Date, (i) each Domestic Borrower shall
execute and deliver to each U.S. Lender U.S. Loan Notes substantially in the
form of Exhibit S-1 in a principal amount equal to the maximum amount of such
Lender's U.S. Commitment evidencing the Loans to such Borrowers made under the
U.S. Facility, (ii) the Multicurrency Borrower shall execute and deliver to each
Multicurrency Lender Multicurrency Loan Notes substantially in the form of
Exhibit S-2 in a principal amount equal to the maximum amount of such Lender's
Multicurrency Commitment evidencing the Loans to such Borrowers made under the
Multicurrency Facility and (iii) the Canadian Borrower shall execute and deliver
to each Canadian Lender a Canadian Loan Note substantially in the form of
Exhibit S-3 in a principal amount equal to the maximum amount of such Lender's
Canadian Commitment evidencing the Loans to the Canadian Borrower made under the
Canadian Facility. Thereafter each Borrower, as applicable, shall execute and
deliver such other promissory notes substantially in the form of the Notes
issued on the Closing Date as are necessary to evidence the Loans owing to the
applicable Lenders after giving effect to any assignment thereof pursuant to
Section 13.01, all in form and substance acceptable to the Agent and the parties
to such assignment, provided that the promissory notes being replaced are
returned to such Borrower or other arrangements satisfactory to such Borrower
and the Agent are made. Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of
the Borrowers to such Lender under each Credit Facility in which it is a Lender
resulting from each Loan made under such Credit Facility owing to such Lender
from time to time, including the amount of principal and interest payable and
paid to such Lender from time to time hereunder and under each of the Notes.
2.04. Authorized Officers and Agents. On the Closing Date and from
time to time thereafter, the Borrowers shall deliver to the Agent an Officers'
Certificate setting forth the names of the officers, employees and agents
authorized to request Revolving Loans, Swing Loans and Letters of Credit and
containing a specimen signature of each such officer, employee or agent. The
officers, employees and agents so authorized shall also be authorized to act for
the Borrowers in respect of all other matters relating to the Loan Documents.
The Agent shall be
-69-
entitled to rely conclusively on such officer's or employee's authority to
request such Loan or Letter of Credit until the Agent receives written notice to
the contrary. In addition, the Agent shall be entitled to rely conclusively on
any written notice sent to it by telecopy. The Agent shall have no duty to
verify the authenticity of the signature appearing on, or any telecopy or
facsimile of, any written Notice of Borrowing or any other document, and, with
respect to an oral request for such a Loan or Letter of Credit, the Agent shall
have no duty to verify the identity of any person representing himself or
herself as one of the officers, employees or agents authorized to make such
request or otherwise to act on behalf of the Borrowers. None of the Agent, any
Lender or any Issuing Bank shall incur any liability to the Borrowers or any
other Person in acting upon any telecopy or facsimile or telephonic notice
referred to above which the Agent reasonably believes to have been given by a
duly authorized officer or other person authorized to act on behalf of the
Borrowers.
-70-
ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01. Prepayments; Reductions in and Reallocations of Revolving
Credit Commitments.
(a) Voluntary Reductions of Revolving Credit Commitments. The
Borrowers, upon at least five (5) Business Days' prior written notice to the
Agent, shall have the right, from time to time, to terminate in whole the
Revolving Credit Commitments or permanently reduce in part the Revolving Credit
Commitments, provided that the applicable Borrowers shall have made or caused to
be made any payment required to be made pursuant to Section 3.01(b)(i) after
giving effect to such reduction. Any partial reduction of a Lender's Revolving
Credit Commitment (i) shall be applied to such Lender's U.S. Commitment,
Multicurrency Commitment or Canadian Commitment, as requested by the Borrower
(it being understood that no such partial reduction shall alter the Pro Rata
Shares of the Multicurrency Lenders or the Canadian Lenders under the
Multicurrency Facility or the Canadian Facility, as the case may be, and that
any voluntary reduction of a Credit Facility shall permanently reduce the
maximum amount of the Revolving Credit Commitments that may be allocated to such
Credit Facility), (ii) shall be in an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount, and (iii) shall
reduce the aggregate Revolving Credit Commitment of such Lender (and, where
applicable, its Affiliates) proportionately in accordance with their aggregate
Pro Rata Share of all Credit Facilities. Any notice of termination or reduction
given to the Agent under this Section 3.01(a)(ii) shall specify the date (which
shall be a Business Day) of such termination or reduction and, with respect to a
partial reduction, the aggregate principal amount thereof. When notice of
termination or reduction of the Revolving Credit Commitments is delivered as
provided herein, the principal amount of the Revolving Loans under each Credit
Facility so reduced shall become due and payable on the date specified in such
notice to the extent the Revolving Credit Obligations under such Credit Facility
would exceed the Maximum Revolving Credit Amount for such Credit Facility after
giving effect to such reduction. The payments in respect of reductions and
terminations described in this Section 3.01(a)(ii) may be made without premium
or penalty (except as provided in Section 4.02(f)).
-71-
(b) Mandatory Prepayments of Revolving Loans.
(i) Immediately, if at any time the Revolving Credit Obligations
under any Credit Facility are greater than the Maximum Revolving Credit Amount
for such Credit Facility, the applicable Borrower or Borrowers agree to make a
mandatory repayment of such Revolving Credit Obligations in an aggregate amount
sufficient to reduce any such excess to zero, such amounts to be applied to the
Obligations of the Borrower or Borrowers making such payments in accordance with
Section 3.02. In addition, if at any time the Maximum Revolving Credit Amount
for any Credit Facility is less than the amount of contingent Letter of Credit
Obligations outstanding under such Credit Facility at such time, the applicable
Borrower or Borrowers agree to deposit and maintain Cash Collateral in the
applicable Cash Collateral Account (or, with respect to Letters of Credit
denominated in Canadian Dollars and Issued pursuant to the Canadian Facility, in
the Canadian Cash Collection Account) in a Dollar Equivalent amount equal to the
amount by which such Letter of Credit Obligations exceed such Maximum Revolving
Credit Amount.
(ii) Subject to Section 3.05, on a daily basis from funds on deposit
in (A) (x) the U.S. Concentration Account of any Domestic Borrower located in
the United States and (y) if necessary to repay in full all Revolving Credit
Obligations of such Borrower under the U.S. Facility, the U.S. Cash Collateral
Account of such Borrower, or (B) (x) the Canadian Cash Collection Account and
(y) if necessary to repay in full all Revolving Credit Obligations of the
Canadian Borrower, the Canadian Cash Collateral Account, in each case prior to
1:00 p.m. (New York or Toronto time, as applicable) on any Business Day, the
Agent or the Canadian Agent, as applicable, shall transfer funds in accordance
with Section 3.05 and thereby cause such Domestic Borrower (in the case of
clause (A) above) or the Canadian Borrower (in the case of clause (B) above) to
make a mandatory repayment of the Revolving Credit Obligations owing by such
Borrower on such Business Day in an amount equal to: first, any and all Non Pro
Rata Loans made to such Borrower on a pro rata basis, second, any and all
outstanding Protective Advances made on behalf of such Borrower, third, any and
all outstanding Swing Loans made to such Borrower, and fourth, the repayment of
the Revolving Credit Obligations and other Obligations owing by such Borrower
then outstanding in accordance with the provisions of Section 3.02.
(iii) Immediately after Holdings', any Borrower's or any of the
Borrowers' Subsidiaries' receipt of any Net Cash Proceeds (other than those
arising in connection with the initial sale of Receivables in connection with
the Permitted Receivables Financing Program or in connection with the issuance
of Capital Stock by Holdings after March 31, 1996), each Borrower receiving such
Net Cash Proceeds agrees to make or cause to be made a
-72-
mandatory prepayment of its Loans in an amount equal to one hundred percent
(100%) of such Net Cash Proceeds; provided, however, to the extent Holdings is
permitted to redeem the Preferred Stock or the Nonvoting Common Stock pursuant
to Section 9.06 or to make regularly scheduled payments of principal and
interest on the Common Equity Notes pursuant to Section 9.06, then any such Net
Cash Proceeds arising from the issuance of any Capital Stock by Holdings may be
applied to redeem such Capital Stock or make such regularly scheduled payments.
Immediately upon the Company's receipt of any Net Cash Proceeds from the initial
sale of Receivables in connection with the Permitted Receivables Financing
Program, each Borrower receiving such proceeds agrees to make or cause to be
made a mandatory prepayment of its Loans in an aggregate amount equal to a
percentage to be mutually agreed by the Company and the Agent. Immediately after
Holdings' receipt of any Net Cash Proceeds arising in connection with the
issuance of Capital Stock by Holdings after March 31, 1996, the Borrowers agree
to make or cause to be made a mandatory prepayment of their Loans in an
aggregate amount equal to fifty percent (50%) of such Net Cash Proceeds. Each
mandatory prepayment required to be paid by any Borrower by this Section
3.01(b)(iii) shall be allocated and applied first, to the repayment of the
Revolving Loans owed by such Borrower; second, to any remaining non-contingent
Revolving Credit Obligations of such Borrower; and then, to the extent any such
Obligations are contingent, with the Agent as Cash Collateral in respect of such
contingent Obligations.
(iv) The Revolving Credit Commitments shall be permanently reduced
by the amount of any payment in respect of the Revolving Loans required to be
made pursuant to Section 3.01(b)(iii) in connection with any Net Cash Proceeds
arising from the initial sale of Receivables under the Permitted Receivables
Financing Program (whether or not such payment could be applied to such Loans).
All Revolving Credit Commitments reduced pursuant to this Section 3.01(b)(iv)
shall be made in accordance with each Lender's Pro Rata Share of the Credit
Facilities (it being understood that only the Pro Rata Shares of the U.S.
Lenders under the U.S. Facility may be altered as a result of such reduction).
(v) Nothing in this Section 3.01(b) shall be construed to constitute
the Lenders' consent to any transaction which is not expressly permitted by
Article IX.
(c) Reallocations of Revolving Credit Commitments. (i) The Company,
upon five (5) Business Days' written notice to the Agent, may request (a
"Reallocation Request"), no more than eight (8) times in any Fiscal Year, that a
Lender under a Credit Facility reduce its Revolving Credit Commitment under such
Credit Facility by an amount equal to not less than $1,000,000 (such amount, the
"Reduction Amount"), and that the Revolving Credit Commitment of such Lender
under another Credit Facility, as
-73-
selected by the Company in the Reallocation Request, be correspondingly
increased by the Reduction Amount; provided that a Reallocation Request may not
be made if, after giving effect to the proposed reallocation, (x) the aggregate
amount of the Multicurrency Commitments would exceed the maximum amount of the
Multicurrency Facility in effect at such time or (y) the aggregate amount of the
Canadian Commitments would exceed the maximum amount of the Canadian Facility in
effect at such time. It is agreed and understood that, in connection with any
such reallocation, (A) the Pro Rata Shares of the Lenders under the
Multicurrency Facility or the Canadian Facility shall not change, (B) the
aggregate Pro Rata Share under all Credit Facilities of a Lender and its
Affiliated Lenders shall not change and (C) the amount of the aggregate
Revolving Credit Commitments of all Lenders before and after such reallocation
shall not change. After receiving a Reallocation Request, the Agent shall notify
each affected Lender of such Reallocation Request, and such Revolving Credit
Commitments shall be adjusted as contemplated thereby on the date set forth in
such Reallocation Request.
(ii) In the event the Pro Rata Shares of the U.S. Lenders are
altered after giving effect to the Reallocation Request or after giving effect
to any partial reduction of the Revolving Credit Commitments made pursuant to
Sections 3.01(a) and 3.01(b)(iv), the U.S. Lenders whose Pro Rata Shares have
increased as a result of such request shall effect such purchases of U.S. Loans
from the other U.S. Lenders on the next Settlement Date such that after giving
effect to such purchases each U.S. Lender is owed U.S. Loans in an amount equal
to its adjusted Pro Rata Share of the Revolving Credit Obligations outstanding
in respect of the U.S. Facility.
3.02. Payments. (a) Manner and Time of Payment. All payments of
principal of and interest on the Loans and Reimburse ment Obligations and other
Obligations (including, without limitation, fees and expenses) which are payable
to the Agent, the Lenders or any Issuing Bank shall be made without condition or
reservation of right, in immediately available funds, delivered to the Agent
(or, in the case of Reimbursement Obligations, to the pertinent Issuing Bank)
not later than 1:00 p.m. (New York time, London time or Toronto time, as
applicable) on the date and at the place due, to the applicable Payment Account
(or, in the case of Reimbursement Obligations, such account of the Issuing Bank,
as it may designate). Thereafter, payments in respect of any Swing Loans
received by the Agent shall be distributed to the applicable Swing Loan Bank and
payments in respect of any Revolving Loan received by the Agent shall be
distributed to each Lender under the applicable Credit Facility in accordance
with its Pro Rata Share of such Credit Facility in accordance with the
provisions of Section 3.02(b) on the date received, if received prior to 1:00
p.m., and (except in the case of repayment of Swing Loans) on the next
succeeding Business Day if received thereafter, by the Agent.
-74-
All payments of principal of and interest on the Multicurrency Loans, whether
made directly or pursuant to Section 3.05(c)(ii), shall be made upon at least
two (2) Business Days' prior notice to the Agent.
(b) Apportionment of Payments. (i) Subject to the provisions of
Section 3.02(b)(ii) and (iv), except as otherwise provided herein (A) all
payments of principal and interest in respect of outstanding Revolving Loans
under any Credit Facility, and all payments in respect of Reimbursement
Obligations under the U.S. Facility or the Canadian Facility, shall be allocated
among such of the Lenders and Issuing Banks as are entitled thereto, in
proportion to their respective Pro Rata Shares of such Credit Facility and (B)
all payments of fees and all other payments in respect of any other Obligation
shall be allocated among such of the Lenders and Issuing Banks as are entitled
thereto, in proportion to their respective Pro Rata Shares of the applicable
Credit Facility (if such Obligation relates to such Credit Facility) or
otherwise to their respective Pro Rata Shares of all the Credit Facilities. All
such payments and any other proceeds of Collateral or other amounts received by
the Agent from or for the benefit of a Borrower shall be applied first, to pay
principal of and interest on any portion of the Loans made to such Borrower
which the Agent may have advanced pursuant to the express provisions of this
Agreement on behalf of any Lender other than the Lender then acting as Agent,
for which the Agent has not then been reimbursed by such Lender or such
Borrower, second, to pay principal of and interest on any Protective Advance
made to such Borrower for which the Agent has not then been paid by such
Borrower or reimbursed by the Lenders, third, to pay all other Obligations of
such Borrower then due and payable and fourth, if such Borrower is a Domestic
Borrower and such payment is denominated in Dollars, to the U.S. Cash Collateral
Account to be held as Cash Collateral in accordance with this Agreement. Except
as set forth in Sections 3.01(a) and (b) and unless otherwise designated by the
Company, (A) all principal payments made by any Borrower in respect of
outstanding Swing Loans or Revolving Loans of such Borrower, as the case may be,
shall be applied first, to the outstanding Swing Loans of such Borrower and
second, to the outstanding Revolving Loans of such Borrower, in each case,
first, to repay outstanding Floating Rate Loans, and then (other than in the
case of the Canadian Borrower) to repay outstanding Fixed Rate Loans with those
Loans which have earlier expiring Interest Periods being repaid prior to those
which have later expiring Interest Periods (provided, that, so long as no
Default or Event of Default shall have occurred and be continuing, such Borrower
(other than the Canadian Borrower) may, in lieu of having amounts applied to
repay, in full or in part, a Fixed Rate Loan on a date which is not the last day
of the applicable Interest Period, request that any amount to be so applied be
deposited into such Borrower's U.S. Cash Collateral Account (or, in the case of
Fixed Rate Loans denominated in an Optional Currency, a Cash Collateral Account
-75-
for such currency) as Cash Collateral for application by the Agent to such Loan
on the last day of such Interest Period). In addition, all principal payments
made by each Borrower in respect of outstanding Swing Loans or Revolving Loans
of such Borrower shall be deemed to repay, first Acquisition Loans made to such
Borrower, and second all other Loans made to such Borrower.
(ii) After the occurrence and during the continuance of an Event of
Default, the Agent may, and shall upon the acceleration of the Obligations
pursuant to Section 11.02(a), apply all payments in respect of any Obligations
(other than payments in respect of Obligations of the Canadian Borrower, which
shall be applied solely to the payment of Obligations under the Canadian
Facility) and all proceeds of Collateral (including, without limitation, all
amounts held as Cash Collateral, but excluding any proceeds of Collateral which
are owned by the Canadian Borrower, which proceeds shall be applied solely to
the payment of Obligations under the Canadian Facility) to the Obligations in
the following order (it being understood that the Agent shall have the right to
convert, at a rate of exchange equal to the Spot Rate as of such conversion date
and at the Borrowers' expense, any of such payments or proceeds of Collateral
into the currency in which such Obligations are denominated):
(A) first, to pay interest on and the principal of any portion of
the Revolving Loans which the Agent may have advanced on behalf of any
Lender for which the Agent has not then been reimbursed by such Lender or
a Borrower;
(B) second, to pay interest on and then principal of first any
outstanding Protective Advance and then any Swing Loan;
(C) third, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Agent, including, without
limitation, fees and expenses in respect of cash management services,
foreign exchange services (including Currency Agreements) provided to the
Company and its Subsidiaries by the Agent;
(D) fourth, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuing
Banks;
(E) fifth, to pay Obligations in respect of any fees then due to the
Agent, the Lenders and the Issuing Banks;
(F) sixth, to pay interest due in respect of the Loans and
Reimbursement Obligations;
-76-
(G) seventh, to pay or prepay (or, to the extent such Obligations
are contingent, provide Cash Collateral pursuant to Section 11.02(b) in
respect of) principal outstanding on Loans and all outstanding Letter of
Credit Obligations;
(H) eighth, to the ratable payment of Interest Rate Contracts to
which the Agent or any Affiliate of the Agent is a party;
(I) ninth, to the ratable payment of all other Obligations;
-77-
provided, however, if sufficient funds are not available to fund all payments to
be made in respect of any of the Obligations described in any of the foregoing
clauses (A) through (I), the available funds being applied with respect to any
such Obligations referred to in any one of such clauses (unless otherwise
specified in such clause) shall be allocated to the payment of such Obligations
ratably, based on the proportion of the Agent's and each Lender's or Issuing
Bank's interest in the aggregate outstanding Obligations described in such
clauses; provided, further, however, all amounts applied in respect of
outstanding Swing Loans or Revolving Loans of any Borrower shall be deemed to
repay, first Acquisition Loans made to such Borrower, and second all other Loans
made to such Borrower. Notwithstanding the foregoing, (x) the Agent, the
Canadian Agent, the Lenders and the Issuing Banks further agree and acknowledge
that in no event shall proceeds of the Collateral of the Canadian Borrower, more
than sixty-five percent (65%) of the Capital Stock of the Canadian Borrower or
Pegasus Asia or amounts received from the Canadian Borrower as described herein
be applied on any of the Obligations (the "Non-Canadian Obligations") other than
the Obligations of the Canadian Borrower, (y) the Agent and the Canadian Agent
shall attempt to liquidate all Collateral which does not secure the Non-Canadian
Obligations (the "Canadian Collateral") and apply the same to the Obligations of
the Canadian Borrower prior to the application thereto of any proceeds of other
Collateral until such time as the Agent and the Canadian Agent, in their
reasonable judgment, determine that further liquidation of the Canadian
Collateral is improbable, economically undesirable or will subject the Agent,
the Canadian Agent, any Lender, any Issuing Bank or any other Holder to
liability and (z) no application of Collateral (other than Canadian Collateral)
may be made to the Obligations of the Canadian Borrower until such time as the
aggregate outstanding Obligations owing to each Lender (and its Affiliates) are
in proportion to (or as near thereto as is reasonably practicable) the
outstanding Obligations owing to each other Lender (and its Affiliates), in
accordance with their respective Pro Rata Shares of all Credit Facilities. The
order of priority set forth in this Section 3.02(b)(ii) and the related
provisions hereof are set forth solely to determine the rights and priorities of
the Agent, the Lenders, the Issuing Banks and other Holders as among themselves.
The order of priority set forth in clauses (A) through (I) of this Section
3.02(b)(ii) may at any time and from time to time be changed by the agreement of
all Lenders without necessity of notice to or consent of or approval by any
Borrower, any Holder which is not a Lender or Issuing Bank, or any other Person;
provided, however, the order of priority set forth in clauses (A) through (E) of
this Section 3.02(b)(ii) may not be changed without the prior written consent of
the Agent.
(iii) The Agent, in its sole discretion subject only to the terms of
this Section 3.02(b)(iii), may pay from the
-78-
proceeds of Revolving Loans made under the applicable Credit Facility (which
Loans may not have been requested by a Borrower pursuant to a Notice of
Borrowing) made to a Borrower hereunder, whether made following a request by
such Borrower pursuant to Section 2.01 or 2.02 or a deemed request as provided
in this Section 3.02(b)(iii), all amounts then due and payable by any Borrower
hereunder, including, without limitation, amounts payable with respect to
payments of principal, interest, Reimbursement Obligations and fees and all
reimbursements for expenses pursuant to Section 13.02. Each Borrower hereby
irrevocably authorizes each Swing Loan Bank and the Lenders to make Swing Loans
or Revolving Loans in the appropriate currency, which Loans shall be Floating
Rate Loans, in each case, upon notice from the Agent as described in the
following sentence for the purpose of paying principal, interest, Reimbursement
Obligations and fees due from any Borrower, reimbursing expenses pursuant to
Section 13.02 and paying any and all other amounts due and payable by any
Borrower hereunder or under the Notes, and agrees that all such Loans so made
shall be deemed to have been requested by it pursuant to Section 2.01 and 2.02
as of the date of the aforementioned notice, provided, that, with respect to any
expenses incurred by third parties which are reimbursable pursuant to Section
13.02, (A) the Agent shall notify the applicable Borrower at least ten (10) days
prior to giving the aforementioned notice to the applicable Swing Loan Bank or
Lenders, together with a reasonably detailed explanation of any amounts with
respect thereto to be paid directly by the Agent with proceeds of Revolving
Loans or Swing Loans made pursuant to this Section 3.02(b)(iii) and (B) in the
event that such Borrower, at least one (1) Business Day prior to the date on
which the Agent has indicated it will give the aforementioned notice to the
applicable Swing Loan Bank or Lenders, notifies the Agent that it disagrees with
any such amount in the notice received by the Borrower, the Agent shall not give
the aforementioned notice to the applicable Swing Loan Bank or Lenders until the
earlier of (1) thirty (30) days after the Borrower so notifies the Agent of such
disagreement and (2) the date on which any disagreement with respect to such
amount is resolved; provided, however, notwithstanding the payment of such
amount at the expiration of such 30-day period without resolving such
disagreement, the Borrower reserves its right to continue to object to such
amount. The Agent shall request Swing Loans or Revolving Loans on behalf of a
Borrower as described in the preceding sentence by notifying the Lenders under
the applicable Credit Facility by telex, telecopy, telegram or other similar
form of transmission (which notice the Agent shall thereafter promptly transmit
to such Borrower), of the amount and Funding Date of the proposed Borrowing and
that such Borrowing is being requested on such Borrower's behalf pursuant to
this Section 3.02(b)(iii). On the proposed Funding Date, the relevant Swing Loan
Bank or Lenders under the relevant Credit Facility, as the case may be, shall
make the requested Loans in accordance with
-79-
the procedures and subject to the conditions specified in Section 2.01 or 2.02
(irrespective of the satisfaction of the conditions described in Section 5.02 or
the requirement to deliver a Notice of Borrowing in Section 2.01(c), which
conditions and requirements, for the purposes of the payment of Swing Loans and
Revolving Loans at the request of the Agent as described in the preceding
sentence, the Lenders irrevocably waive).
(iv) If any Lender fails to fund its Pro Rata Share of any Revolving
Loan Borrowing requested by a Borrower under any Credit Facility which such
Lender is obligated to fund under the terms hereof (the funded portion of such
Revolving Loan Borrowing being hereinafter referred to as a "Non Pro Rata
Loan"), excluding any such Lender who has delivered to the Agent written notice
that one or more of the conditions precedent contained in Section 5.02 shall not
on the date of such request be satisfied and until such conditions are
satisfied, then until the earlier of such Lender's cure of such failure and the
termination of the Revolving Credit Commitments, the proceeds of all amounts
thereafter repaid to the Agent by any Borrower in respect of such Credit
Facility and otherwise required to be applied to such Lender's share of all
other Obligations pursuant to the terms hereof shall be advanced to the Borrower
requesting such Revolving Loan Borrowing by the Agent on behalf of such Lender
to cure, in full or in part, such failure by such Lender, but shall nevertheless
be deemed to have been paid to such Lender in satisfaction of such other
Obligations. Notwithstanding anything contained herein to the contrary:
(A) the foregoing provisions of this Section 3.02(b)(iv) shall apply
only with respect to the proceeds of payments of Obligations;
(B) a Lender shall be deemed to have cured its failure to fund its
Pro Rata Share of any Revolving Loan at such time as an amount equal to
such Lender's original Pro Rata Share of the requested principal portion
of such Revolving Loan is fully funded to the applicable Borrower, whether
made by such Lender itself or by operation of the terms of this Section
3.02(b)(iv), and whether or not the Non Pro Rata Loan with respect thereto
has been repaid;
(C) amounts advanced to a Borrower to cure, in full or in part, any
such Lender's failure to fund its Pro Rata Share of any Revolving Loan
Borrowing ("Cure Loans") shall bear interest from and after the date made
available to the applicable Borrower at the rate applicable to the other
Revolving Loans comprising such Borrowing and shall be treated as
Revolving Loans comprising such Borrowing for all purposes herein;
-80-
(D) regardless of whether or not an Event of Default has occurred or
is continuing, and notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal which, in accordance
with the other terms of this Section 3.02, would be applied to the
outstanding Revolving Loans shall be applied first, ratably to all
Revolving Loans constituting Non Pro Rata Loans, second, ratably to
Revolving Loans other than those constituting Non Pro Rata Loans or Cure
Loans and, third, ratably to Revolving Loans constituting Cure Loans; and
(E) no Lender shall be relieved of any obligation such Lender may
have to the Borrower under the terms of this Agreement as a result of the
provisions of this Section 3.02(b)(iv).
(c) Payments on Non-Business Days. Whenever any pay ment to be made
by a Borrower hereunder or under the Notes is stated to be due on a day which is
not a Business Day, the payment shall instead be due on the next succeeding
Business Day (or, as set forth in Section 4.02(b)(iv), the next preceding
Business Day), and any such extension of time shall be included in the
computation of the payment of interest and fees hereunder.
-81-
3.03. Taxes.
(a) Payment of Taxes. Any and all payments by the Borrowers
hereunder or under any Note or other document evidencing any Obligations shall
be made free and clear of and without reduction for any and all taxes, levies,
imposts, deductions, charges, withholdings, and all stamp or documentary taxes,
excise taxes, ad valorem taxes and other taxes imposed on the value of the
Property, charges or levies which arise from the execution, delivery or
registration, or from payment or performance under, or otherwise with respect
to, any of the Loan Documents or the Revolving Credit Commitments and all other
liabilities with respect thereto excluding, in the case of each Lender, each
Issuing Bank and the Agent, taxes imposed on its income, capital, profits or
gains and franchise taxes imposed on it by (i) the United States, except certain
withholding taxes contemplated pursuant to Section 3.03(d)(ii)(C), (ii) the
Governmental Authority of any jurisdiction (or any political subdivision
thereof) in which any Applicable Lending Office of such Lender is located, (iii)
the Governmental Authority in which such Person is organized, managed and
controlled or any political subdivision thereof or (iv) any political
subdivision of the United States, unless such taxes are imposed solely as a
result of such Lender's performance of any of the Loan Documents in such
political subdivision and such Lender would not otherwise be subject to tax by
such political subdivision (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If a Borrower shall be required by law to withhold or deduct any
Taxes from or in respect of any sum payable hereunder or under any such Note or
document to any Lender, any Issuing Bank or the Agent, (x) the sum payable to
such Lender, such Issuing Bank or the Agent shall be increased as may be
necessary so that after making all required withholding or deductions (including
withholding or deductions applicable to additional sums payable under this
Section 3.03) such Lender, such Issuing Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
withholding or deductions been made, (y) such Borrower shall make such
withholding or deductions, and (z) such Borrower shall pay the full amount
withheld or deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) Indemnification. The Borrowers (other than the Canadian
Borrower, which so agrees to indemnify the Canadian Agent, the Canadian Lenders
and the Canadian Issuing Banks only with respect to Taxes with respect to the
Canadian Facility) jointly and severally agree to indemnify each Lender, each
Issuing Bank and the Agent against, and reimburse each on demand for, the full
amount of all Taxes (including, without limitation,
-82-
any Taxes imposed by any Governmental Authority on amounts payable under this
Section 3.03 and any additional income or franchise taxes resulting therefrom)
incurred or paid by such Lender, such Issuing Bank or the Agent (as the case may
be) or any of their respective Affiliates and any liability (including
penalties, interest, and out-of-pocket expenses paid to third parties) arising
therefrom or with respect thereto, whether or not such Taxes were lawfully
payable (other than any liability that results from the gross negligence or
willful misconduct of the Lenders and the Agent, whether or not such Taxes were
correctly or legally asserted by the relevant taxing authority or other
governmental authority). A certificate as to any additional amount payable to
any Person under this Section 3.03 submitted by it to the Borrower shall, absent
manifest error, be final, conclusive and binding upon all parties hereto. Each
Lender, the Agent and each Issuing Bank agrees (i) within a reasonable time
after receiving a written request from the Company, to provide the Company and
the Agent with such certificates as are reasonably required, and (ii) take such
other actions as are reasonably necessary to claim such exemptions as such
Lender, the Agent or such Issuing Bank or Affiliate may be entitled to claim in
respect of all or a portion of any Taxes which are otherwise required to be paid
or deducted or withheld pursuant to this Section 3.03 in respect of any payments
under this Agreement or under the Notes. If any Lender or the Agent
receives a refund in respect of any Taxes for which such Lender or the Agent has
received payment from a Borrower hereunder, it shall promptly apply such refund
(including any interest received by such Lender or the Agent from the taxing
authority with respect to the refund with respect to such Taxes) to the
Obligations of such Borrower, net of all out-of-pocket expenses of such Lender
or the Agent; provided that such Borrower, upon the request of such Lender or
the Agent, agrees to reimburse such refund (plus penalties, interest or other
charges) to such Lender or the Agent in the event such Lender or the Agent is
required to repay such refund.
(c) Receipts. Within thirty (30) days after the date of any payment
of Taxes pursuant to this Section 3.03 by any Borrower or any of the Borrowers'
Subsidiaries, the Company will furnish to the Agent at its request, at its
notice address in effect under Section 13.08, a copy of a receipt, if any, or
other documentation reasonably satisfactory to the Agent, evidencing payment
thereof. The Borrowers shall furnish to the Agent, within thirty (30) days after
the request of the Agent from time to time, an Officer's Certificate stating
that all Taxes of which they are aware are due have been paid and that no
additional Taxes of which it is aware are due.
(d) Foreign Bank Certifications. (i) Each Lender (other than the
Canadian Lenders) or Issuing Bank (other than the Canadian Issuing Banks) that
is not created or organized under
-83-
the laws of the United States or a political subdivision thereof has delivered
to the Borrowers and the Agent on the date on which such Lender became a Lender
or such Issuing Bank became an Issuing Bank or shall deliver to the Borrowers on
the date such Lender becomes a Lender or such Issuing Bank becomes an Issuing
Bank, if such date is after the Closing Date, a true and accurate certificate
executed in duplicate by a duly authorized officer of such Lender or Issuing
Bank to the effect that such Lender or Issuing Bank is eligible to receive all
payments hereunder and under the Notes without deduction or withholding of
United States federal income tax (1) under the provisions of an applicable tax
treaty concluded by the United States (in which case the certificate shall be
accompanied by two duly completed copies of IRS Form 1001 (or any successor or
substitute form or forms)) or (2) under Section 1441(c)(1) as modified for
purposes of Section 1442(a) of the Internal Revenue Code (in which case the
certificate shall be accompanied by two duly completed copies of IRS Form 4224
(or any successor or substitute form or forms)). If a Lender (other than the
Canadian Lender) or an Issuing Bank (other than a Canadian Issuing Bank) is
unable to deliver the certificate and forms described in, and on the dates
required by, the preceding sentence, then the applicable Borrower shall withhold
the applicable tax and shall have no indemnification obligation with respect to
such withholding tax.
(ii) Each Lender (other than the Canadian Lenders) and each Issuing
Bank (other than the Canadian Issuing Banks) further agrees to promptly deliver
to the Borrowers and the Agent from time to time, a true and accurate
certificate executed in duplicate by a duly authorized officer of such Lender or
such Issuing Bank before or promptly upon the occurrence of any event requiring
a change in the most recent certificate previously delivered by it to the
Borrowers and the Agent pursuant to this Section 3.03(d) (including, but not
limited to, a change in such Lender's or such Issuing Bank's lending office).
Each certificate required to be delivered pursuant to this Section 3.03(d)(ii)
shall certify as to one of the following:
(A) that such Lender or such Issuing Bank can continue to receive
payments hereunder and under the Notes without deduction or withholding of
United States federal income tax;
(B) that such Lender or such Issuing Bank cannot continue to receive
payments hereunder and under the Notes without deduction or withholding of
United States federal income tax as specified therein but does not require
additional payments pursuant to Section 3.03(a) because it is entitled to
recover the full amount of any such deduction or withholding from a source
other than the Borrowers;
(C) that such Lender or Issuing Bank is no longer
-84-
capable of receiving payments hereunder and under the Notes without
deduction or withholding of United States federal income tax as specified
therein by reason of a change in law (including the Internal Revenue Code
or applicable tax treaty) after the later of the Closing Date or the date
on which such Lender became a Lender or such Issuing Bank became an
Issuing Bank and that it is not capable of recov ering the full amount of
the same from a source other than the Borrowers; or
(D) that such Lender or such Issuing Bank is no longer capable of
receiving payments hereunder without deduction or withholding of United
States federal income tax as specified therein other than by reason of a
change in law (including the Internal Revenue Code or applicable tax
treaty) after the later of the Closing Date or the date on which such
Lender became a Lender or such Issuing Bank became an Issuing Bank.
Each Lender (other than the Canadian Lenders) and each Issuing Bank (other than
the Canadian Issuing Banks) agrees to deliver to the Borrowers and the Agent
further duly completed copies of the above-mentioned IRS forms on or before the
earlier of (x) the date that any such form expires or becomes obsolete or
otherwise is required to be resubmitted as a condition to obtaining an exemption
from withholding from United States federal income tax and (y) fifteen (15) days
after the occurrence of any event requiring a change in the most recent form
previously delivered by such Lender or such Issuing Bank to the Borrowers and
the Agent, unless any change in treaty, law, regulation or official
interpretation thereof which would render such form inapplicable or which would
prevent the Lender from duly completing and delivering such form has occurred
prior to the date on which any such delivery would otherwise be required and the
Lender or the Issuing Bank promptly advises the Borrowers that it is not capable
of receiving payments hereunder or under the Notes without any deduction or
withholding of United States federal income tax.
3.04. Increased Capital. If after the date hereof any Lender or
Issuing Bank determines that (i) the adoption or implementation of or any change
in or in the interpretation or administration of any law or regulation or any
guideline or request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over any
Lender, Issuing Bank or banks or financial institutions generally (whether or
not having the force of law), compliance with which affects or would affect the
amount of capital required or expected to be maintained by such Lender or
Issuing Bank or any corporation controlling such Lender or Issuing Bank and (ii)
the amount of such capital is increased by or based upon (A) the making or
maintenance by any Lender of its
-85-
Loans, any Lender's participation in or obligation to participate in the Loans,
Letters of Credit or other advances made hereunder or the existence of any
Lender's obligation to make Loans or (B) the issuance or maintenance by any
Issuing Bank of, or the existence of any Issuing Bank's obligation to Issue,
Letters of Credit, then, in any such case, upon written demand by such Lender or
Issuing Bank (with a copy of such demand to the Agent), the Borrowers (other
than the Canadian Borrower which so agrees to pay only with respect to the
Canadian Lenders and the Canadian Issuing Banks) jointly and severally agree
immediately to pay to the Agent for the account of such Lender or Issuing Bank,
from time to time as specified by such Lender or Issuing Bank, additional
amounts sufficient to compensate such Lender or Issuing Bank or such corporation
therefor. Such demand shall be accompanied by a reasonably detailed statement as
to the amount of such compensation and include a summary of the basis for such
demand with detailed calculations. Such statement shall be conclusive and
binding for all purposes, in the absence of manifest error.
-86-
3.05. Cash Management and Cash Collateral Accounts.
(a) Establishment of Accounts. On the Closing Date, the Borrowers
and certain of their respective Subsidiaries shall have established the
Lockboxes, Collection Accounts, Cash Collateral Accounts and Disbursement
Accounts identified on Schedule 6.01-AA as "at closing accounts". As soon as
practicable after the Closing Date, the Borrowers agree to establish, and cause
their respective Subsidiaries who are Subsidiary Guarantors, whose Capital Stock
has been pledged under the Loan Documents, who act as agent for any Borrower in
connection with the purchase and sale of Inventory and/or the invoicing and
collection of Receivables or are otherwise agreed to by the Agent and the
Company to establish, the Lockboxes, Collection Accounts, Cash Collateral
Accounts and Disbursement Accounts identified on Schedule 6.01-AA as "post
closing accounts". After any such bank account is established, the Borrowers or
such Subsidiaries may change the bank accounts or
add to the bank accounts listed on Schedule 6.01-AA as their needs may require
and agree to notify the Agent in writing of any such changes (such schedule
being deemed to be amended by any such notice); provided, however, no Borrower
and no such Subsidiary shall (x) change any Collection Account or zero-balance
Disbursement Account (except as contemplated above) or establish any new
Collection Account or zero-balance Disbursement Account with any bank which is
not acceptable to the Agent and which, in the case of a Collection Account to be
maintained at such bank, has not executed a Collection Account Agreement with
respect to such Collection Account or (y) establish any other Disbursement
Account or new Cash Collateral Account, or modify any arrangement with respect
to any other existing Disbursement Account or Cash Collateral Account, without
the prior consent of the Agent, which consent may be granted or withheld in the
reasonable discretion of the Agent (it being understood and agreed that no
Disbursement Account which is not a zero-balance account and no Cash Collateral
Account may be established at any bank other than the Agent or an Affiliate of
the Agent). All Lockboxes and Collection Accounts maintained by any Subsidiary
of a Borrower who acts as agent for any Borrower in connection with the purchase
and sale of Inventory and/or the invoicing and collection of Receivables shall
be maintained in the name of such Subsidiary for the account of such Borrower.
(b) Collections. Except as may be otherwise required after the
Closing Date pursuant to the Permitted Receivables Transaction Documents, each
Borrower and each Subsidiary described in Section 3.05(a) (i) has directed, and
in the future will direct, all of its account debtors to remit all monies,
checks, notes, drafts or funds received by it, including, without limitation,
all payments in respect of Receivables and other proceeds of Collateral directly
to a Lockbox or Collection
-87-
Account or (ii) to the extent that the account debtors of such Borrower or such
Subsidiary, notwithstanding the instructions described in clause (i) above,
remit such monies, checks, notes, drafts or funds directly to such Borrower or
such Subsidiary, such Borrower and such Subsidiary hereby agrees to deposit all
such collections of Receivables into a Collection Account (or, in the case of
collections of Receivables of the Canadian Borrower, into the Canadian Cash
Collection Account or the Canadian Cash Collateral Account, as applicable, and,
in the case of Receivables of the Multicurrency Borrower denominated in Swiss
Francs, in the Cash Collateral Account for such currency) and promptly upon such
Person's receipt thereof. The contents of each Lockbox shall automatically be
deposited into a Collection Account or be emptied and deposited into a
Collection Account by a representative of the Collection Account Bank at which
the applicable Collection Account has been established. Only the Agent and the
applicable Collection Account Bank, if any, shall have power of withdrawal from
each Lockbox and the related Collection Account. Except as may be otherwise
required after the Closing Date pursuant to the Permitted Receivables
Transaction Documents, the Borrowers and Holdings agree to cause all collections
of Receivables, all proceeds of Collateral and all Net Cash Proceeds now or
hereafter received directly or indirectly by Holdings, any Borrower or any
Subsidiary of any Borrower or in the possession of Holdings, any Borrower or any
such Subsidiary to be held in trust for the Agent for the benefit of the Lenders
and, promptly upon receipt thereof, to be deposited into a Collection Account
(in the case of collections of Receivables (or, in the case of collections of
Receivables of the Canadian Borrower, into the Canadian Cash Collection Account
or the Canadian Cash Collateral Account, as applicable, and, in the case of
Receivables of the Multicurrency Borrower denominated in Swiss Francs, in the
Cash Collateral Account for such currency) or a Cash Collateral Account (in all
other cases); provided, however, all Net Cash Proceeds or other amounts not
constituting proceeds of Collateral which are required to be applied to the
Revolving Credit Obligations by any Borrower pursuant to the terms of this
Agreement shall be paid directly to the applicable Payment Account.
(c) U.S. Concentration Account; Canadian Cash Collection Account;
Cash Collateral Accounts. All immediately available funds in any Collection
Account (w) of any Domestic Borrower shall be automatically transferred into the
U.S. Concentration Account, (x) of the Canadian Borrower shall be automatically
transferred into (A) with respect to funds denominated in Canadian Dollars, the
Canadian Cash Collection Account and (B) with respect to funds denominated in
Dollars, the Canadian Cash Collateral Account, (y) of the Multicurrency
Borrower, shall be automatically transferred into the applicable Cash Collateral
Account designated pursuant to the applicable Collection Account Agreement and
(z) of any Subsidiary of a
-88-
Borrower acting as an agent for such Borrower, shall be automatically
transferred to the Cash Collateral Account for the applicable currency of such
Borrower. The U.S. Concentration Account and each Cash Collateral Account (other
than the Canadian Cash Collateral Account) shall be under the sole dominion and
control of the Agent. The Canadian Cash Collection Account and the Canadian Cash
Collateral Account shall be under the sole dominion and control of the Canadian
Agent. The following procedures shall apply to the U.S. Concentration Account,
the Canadian Cash Collection Account and the Cash Collateral Accounts:
(i) The U.S. Concentration Account, the Canadian Cash
Collection Account and the U.S. Cash Collateral Account. With respect to
the U.S. Concentration Account and the U.S. Cash Collateral Account, the
Agent alone shall have power of withdrawal from such accounts. With
respect to the Canadian Cash Collection Account, the Canadian Agent alone
shall have power of withdrawal from such account, except as provided
below. Subject to Sections 3.01(b)(ii), 3.01(b)(iii), 3.02(b)(ii),
3.02(b)(iii) and 11.03, each Domestic Borrower hereby authorizes the Agent
to apply all immediately available funds on deposit in its U.S.
Concentration Account and, if necessary, U.S. Cash Collateral Account to
such Borrower's Obligations under the U.S. Facility, and the Canadian
Borrower hereby authorizes the Canadian Agent to apply all immediately
available funds on deposit in the Canadian Cash Collection Account and, if
necessary, the Canadian Cash Collateral Account (after any necessary
conversion of funds), to such Borrower's Obligations under the Canadian
Facility. Solely with respect to the U.S. Concentration Account, to the
extent any such funds remain after such application, each Domestic
Borrower hereby authorizes the Agent to transfer such funds to such
Borrower's U.S. Cash Collateral Account and invest the same in accordance
with Section 3.05(c)(iii). Solely with respect to the Canadian Cash
Collection Account, so long as no Default or Event of Default has occurred
and is continuing, the Canadian Agent shall honor any request made by the
Canadian Borrower and received by the Canadian Agent no later than 12:00
noon (Toronto time) to transfer funds from the Canadian Cash Collection
Account (but only if no Canadian Loans are outstanding or other
Obligations under the Canadian Facility are then due and payable) to the
Canadian Dollar Disbursement Account of the Canadian Borrower and such
funds shall be transferred to such Disbursement Account on the same
Business Day, provided that such request shall be made pursuant to a
signed Notice of Withdrawal and the conditions set forth therein have been
met as of the date of such request and that the use of such funds are
consistent with Section 2.01(g) (assuming for such purpose that such funds
are proceeds of Canadian Loans) and
-89-
provided, further, that after giving effect to such withdrawal, the
Revolving Credit Availability under the Canadian Facility is greater than
zero. Following the occurrence and during the continuance of any Default
or Event of Default, the Canadian Agent shall not be required to honor any
Notice of Withdrawal, and the Canadian Agent shall be entitled to apply
all funds on deposit in the Canadian Cash Collection Account to the
Obligations of the Canadian Borrower, as the case may be, in accordance
with Section 3.02(b)(ii).
(ii) Cash Collateral Accounts located in Canada, Europe and
Asia. Each Cash Collateral Account located in Canada, Europe and Asia
shall be denominated in a single currency and all proceeds of Collateral
which are in such currency shall be deposited in a corresponding Cash
Collateral Account. So long as no Default or Event of Default has occurred
and is continuing, (A) the Multicurrency Borrower may instruct the Agent
by no later than 12:00 noon (London time), at least two (2) Business Days
prior to the date of such application, to apply any funds denominated in
Dollars or an Optional Currency on deposit in such Cash Collateral Account
maintained by it to the Obligations of the Multicurrency Borrower under
the Multicurrency Facility denominated in such currency (or, in the case
of any such Cash Collateral Account of the Multicurrency Borrower
denominated in Dollars, to the Obligations of the Multicurrency Borrower
under the U.S. Facility), (B) the Canadian Borrower may instruct the
Canadian Agent by no later than 12:00 noon (Toronto time) to apply any
funds denominated in Dollars on deposit in the Canadian Cash Collateral
Account (after any conversion of such funds into Canadian Dollars) to the
Obligations of the Canadian Borrower under the Canadian Facility, and (C)
the Agent shall honor any request made by the Multicurrency Borrower and
the Canadian Agent shall honor any request made by the Canadian Borrower,
as applicable, and received by the Agent or the Canadian Agent, as
applicable, no later than 12:00 noon (London or Toronto time, as
applicable), at least two (2) Business Days prior to the date of such
transfer (in the case of the Multicurrency Borrower), to transfer funds
from any such Cash Collateral Account (whether or not any Multicurrency
Loan or Canadian Loan, as the case may be, is outstanding) to a
Disbursement Account of such Borrower and such funds shall be transferred
to such Disbursement Account of the Canadian Borrower on the same Business
Day or of the Multicurrency Borrower on the following Business Day,
provided that such request shall be made pursuant to a signed Notice of
Withdrawal and the conditions set forth therein shall have been met as of
the date of such request and that the intended use of such funds shall be
consistent with Section 2.01(g) (assuming for such purpose that such
-90-
funds are proceeds of Revolving Loans), and provided, further, that after
giving effect to such withdrawal, the Revolving Credit Availability under
the applicable Credit Facility is greater than zero. Following the
occurrence and during the continuance of any Default or Event of Default,
the Agent shall not be required to honor any Notice of Withdrawal, and the
Agent shall be entitled to apply all funds on deposit in any such Cash
Collateral Account to the Obligations of the Multicurrency Borrower or the
Canadian Borrower, as the case may be, in accordance with Section
3.02(b)(ii).
(iii) Investments. If requested by the applicable Borrower and
subject to the right of the Agent or the Canadian Agent to withdraw funds
from the Canadian Cash Collection Account and the Cash Collateral Accounts
as provided in this Agreement, the Agent or the Canadian Agent, as
applicable, shall, so long as no Event of Default shall have occurred and
be continuing, from time to time invest funds on deposit in such accounts
and accrued interest thereon, reinvest proceeds of any such investments
which may mature or be sold, and invest interest or other income received
from any such investments, in each case in such Cash Equivalents as the
applicable Borrower may select (it being agreed that if such Borrower does
not make any such selection such funds shall be invested in an overnight
investment selected by the Agent). None of the Agent, any Lender or any
Issuing Bank shall be liable to any Borrower for, or with respect to, any
decline in value of amounts on deposit in the Cash Collateral Accounts
which shall have been invested pursuant to this Section 3.05(c)(iii) at
the direction of the applicable Borrower (or pursuant to such overnight
investments selected by the Agent). Cash Equivalents from time to time
purchased and held pursuant to this Section 3.05(c)(iii) shall constitute
Cash Collateral and shall, for purposes of this Agreement, be deemed to be
part of the funds held in the Cash Collateral Accounts in amounts equal to
their respective outstanding principal amounts. Any funds not requested to
be invested in Cash Equivalents shall bear interest in accordance with the
applicable account agreement.
(iv) Additional Payments. If at any time the Agent determines
that any funds held in the Canadian Cash Collection Account or any Cash
Collateral Account are subject to any interest, right, claim or Lien
(other than Liens arising in the ordinary course of business for amounts
which are not yet due and payable) of any Person other than the Agent or
the applicable Borrower, the Borrowers (other than the Canadian Borrower,
which so agrees only with respect to any funds deposited by the Canadian
Borrower) jointly and severally agree that (i) forthwith upon demand
-91-
by the Agent, to pay to the Agent, as additional funds to be deposited and
held in the Canadian Cash Collection Account or the applicable Cash
Collateral Account, as the case may be, an amount equal to the amount of
funds subject to such interest, right, claim or Lien or (ii) if no such
payment is made, the Agent shall immediately and without requirement of
notice as set forth in the definitions of Canadian Borrowing Base and
Domestic Borrowing Base, impose an Eligibility Reserve in the amount of
such funds (unless such interest, right, claim or Lien has then been
included in any Eligibility Reserve with respect to such funds or has been
factored into a decreased advance rate with respect to Cash Collateral).
(v) Custody of Cash Collateral. The Agent shall exercise
reasonable care in the custody and preservation of any funds held in the
U.S. Concentration Account, the Canadian Cash Collection Account and the
Cash Collateral Accounts and shall be deemed to have exercised such care
if such funds are accorded treatment substantially equivalent to that
which the Agent accords its own like property, it being understood that
the Agent shall not be required to preserve rights of the Borrowers in
such accounts or any amounts on deposit therein or any Investments subject
thereto against third parties but may do so at its option. All expenses
incurred in connection therewith shall be for the sole account of the
Canadian Borrower with respect to any funds deposited by the Canadian
Borrower or the joint and several account of the Domestic Borrowers with
respect to any funds deposited by the Domestic Borrowers, and, in each
case, shall constitute Obligations hereunder.
-92-
Notwithstanding anything to the contrary contained in this Agreement, (i) except
as set forth in this clause (c), none of the Borrowers or any Person or entity
claiming on behalf of or through a Borrower shall have any right to withdraw any
of the funds held in the U.S. Concentration Account, the Canadian Cash
Collection Account or any Cash Collateral Account, (ii) the Agent shall not be
required to honor any Notice of Withdrawal with respect to the Canadian Cash
Collateral Account or any Cash Collateral Account that requires the Agent to
transfer funds deposited in such account which are not in immediately available
funds and (iii) the Multicurrency Borrower shall not maintain on deposit in the
Cash Collateral Accounts located in Europe or Asia (or any operating account
from which funds on deposit in such Cash Collateral Accounts have been
transferred) deposits in excess of $5,000,000 (or such larger amount acceptable
to the Agent) at any time outstanding. Upon the Payment In Full of the
Obligations and termination of the Commitments, any funds remaining in the U.S.
Concentration Account, the Canadian Cash Collection Account or any Cash
Collateral Account shall be returned by the Agent to the relevant Borrower or
paid by the Agent to whomever may be legally entitled thereto.
(d) Fees and Expenses. The Borrowers (other than the Canadian
Borrower, which so agrees only with respect to fees, costs and expenses so
incurred in respect of the Canadian Facility) jointly and severally agree to pay
to the Agent any and all reasonable fees, costs and expenses which the Agent
incurs in connection with opening and maintaining the Collection Accounts and
the Cash Collateral Accounts, lock box or other similar payment collection
mechanisms for the Borrowers and depositing for collection any check or item of
payment received by and/or delivered to the Collection Account Banks or the
Agent on account of the Obligations. The Borrowers (other than the Canadian
Borrower, which so agrees only with respect to the Collection Account Banks for
the Canadian Borrower's Collection Accounts) jointly and severally agree to
reimburse the Agent for any amounts paid to any Collection Account Bank arising
out of any required indemnification by the Agent of such Collection Account Bank
against damages incurred by the Collection Account Bank in the operation of a
Collection Account.
3.06. Right to Remove Affected Lender. In the event that any
Borrower is required to pay any amounts deemed material by the Company and the
Agent with respect to a Lender (or its Affiliates, if applicable) pursuant to
Sections 3.03, 3.04 or 4.01(f) or receives a notice from a Lender pursuant to
Section 4.02(e) and such amounts, or similar amounts, have not been demanded by
the Lenders constituting the Requisite Lenders, or, in the event any Lender
fails to fund its Pro Rata Share of any Revolving Loan requested by any Borrower
which such Lender is obligated to fund under the terms hereof and any such
failure has
-93-
not been cured, such Borrower shall have the right to designate an Eligible
Assignee which is not an Affiliate of such Borrower and which is reasonably
acceptable to the Agent to purchase for cash, pursuant to an Assignment and
Acceptance, the outstanding Loans and Reimbursement Obligations (if any) of such
Lender and to assume all of such Lender's other rights and obligations
(including, without limitation, in the case of a U.S. Lender, such Lender's
obligation to participate in all outstanding Letters of Credit pursuant to
Section 2.02(e)) hereunder without recourse to or warranty by, or expense to,
such Lender, for a purchase price equal to the principal amount of all of such
Lender's outstanding Loans plus any accrued but unpaid interest thereon and the
accrued but unpaid Unused Commitment Fees and Letter of Credit Fees in respect
of that Lender's Commitment hereunder and any other amounts that may be owing to
such Lender hereunder. In the event any Issuing Bank fails to Issue a Letter of
Credit requested by a Borrower which such Issuing Bank is obligated to Issue
under the terms hereof and any such failure has not been cured, such Borrower
shall have the right to designate an Eligible Assignee which is not an Affiliate
of such Borrower and which is reasonably acceptable to the Agent to (i) replace
such Issuing Bank if no Letter of Credit Obligations are outstanding to such
Issuing Bank or (ii) become an additional Issuing Bank hereunder (it being
agreed and understood that, as of the date of such addition, the defaulting
Issuing Bank's obligations to Issue Letters of Credit pursuant to Section 2.02
shall terminate and such Issuing Bank shall be an Issuing Bank hereunder only
with respect to outstanding Letters of Credit Issued prior to such date).
ARTICLE IV
INTEREST AND FEES
4.01. Interest on the Loans and Other Obligations. (a) Rate of
Interest. All Loans and the out standing principal balance of all other
Obligations shall bear interest on the unpaid principal amount thereof from the
date such Loans are made and such other Obligations are due and payable until
paid in full, except as otherwise provided in Section 4.01(d), as follows:
(i) If a Floating Rate Loan or such other Obligation, at a rate per
annum equal to the sum of (A) the Floating Rate applicable to the currency
in which such Obligation is denominated in effect from time to time as
interest accrues, plus (B) the Applicable Floating Rate Margin in effect
from time to time;
(ii) If a Fixed Rate Loan, at a rate per annum equal to the sum of (A)
the Fixed Rate determined for the applicable Interest Period and the
applicable
-94-
currency, plus (B) the Applicable Fixed Rate Margin in effect from time to
time during such Interest Period;
The applicable basis for determining the rate of interest on any Loan shall be
initially determined in accordance with Section 2.01(c). The applicable basis
for determining the rate of interest on such Loan shall be selected thereafter
by the relevant Borrower at the time a Notice of Conversion/Continuation is
delivered by such Borrower to the Agent. Notwithstanding the foregoing, such
Borrower may not select the Fixed Rate as the applicable basis for determining
the rate of interest on such a Loan if (x) such Loan is to be made on the
Closing Date, (y) at the time of such selection an Event of Default or Default
would occur or has occurred and is continuing, or (z) such Loan is a Canadian
Loan. If on any day any Loan is outstanding with respect to which notice has not
been timely delivered to the Agent in accordance with the terms hereof
specifying the basis for determining the rate of interest on that day, then for
that day interest on that Loan shall be determined by reference to the
applicable Floating Rate.
(b) Interest Payments. (i) Interest accrued on each Floating Rate
Loan shall be payable in arrears in the currency in which such Loan is
denominated (A) on the first Business Day of each calendar month for the
preceding calendar month, commencing on the first such day following the making
of such Floating Rate Loan and (B) if not theretofore paid in full, at maturity
(whether by acceleration or otherwise) of such Floating Rate Loan.
(ii) Interest accrued on each Fixed Rate Loan shall be payable in
arrears in the currency in which such Loan is denominated on the last day of
each Fixed Rate Interest Payment Date with respect to such Loan and (B) if not
theretofore paid in full, at maturity (whether by acceleration or otherwise) of
such Fixed Rate Loan.
(iii) Interest accrued on the principal balance of all other
Obligations shall be payable in arrears in the currency in which such Obligation
is denominated (A) on the first Business Day of each month, commencing on the
first such day following the incurrence of such Obligation and (B) if not
theretofore paid in full, at the time such other Obligation becomes due and
payable (whether by acceleration or otherwise).
(c) Conversion or Continuation. (i) Each Borrower shall have the
option (A) to convert at any time all or any part of its outstanding Floating
Rate Loans (other than Swing Loans and Canadian Loans) to Fixed Rate Loans
denominated in the same Available Currency; (B) to convert all or any part of
its outstanding Fixed Rate Loans having Interest Periods which expire on the
same date to Floating Rate Loans denominated in the same
-95-
currency on such expiration date; or (C) to continue all or any part of its
outstanding Fixed Rate Loans having Interest Periods which expire on the same
date as Fixed Rate Loans denominated in the same currency, and the succeeding
Interest Period of such continued Loans shall commence on such expiration date;
provided, however, no such outstanding Loan may be continued as, or be converted
into, a Fixed Rate Loan (i) if the continuation of, or the conversion into,
would violate any of the provisions of Section 4.02 or (ii) if an Event of
Default or Default would occur or has occurred and is continuing. Any conversion
into or continuation of Fixed Rate Loans under this Section 4.01(c) shall be in
a minimum amount of $5,000,000 (or the Dollar Equivalent of $1,000,000 for Fixed
Rate Loans denominated in an Optional Currency) and in integral Dollar
Equivalent multiples of $1,000,000 (or approximately similar intervals in
Optional Currencies) in excess of that amount. Such minimum levels may be
achieved under the U.S. Facility by combining the Loans of more than one
Borrower being continued as or converted into Fixed Rate Loans with the same
Interest Period so long as the minimum amount of any single Borrowing is
$1,000,000.
(ii) To convert or continue a Loan under Section 4.01(c)(i), the
applicable Borrower shall deliver a Notice of Conversion/Continuation to the
Agent no later than 12:00 noon (New York time or London time, as applicable) at
least three (3) Business Days (or two (2) Business Days in the case of
Multicurrency Loans) in advance of the proposed conversion/continuation date.
Promptly after receipt of a Notice of Conversion/Continuation under this Section
4.01(c)(ii), the Agent shall notify each Lender under the applicable Credit
Facility by telex or telecopy, or other similar form of trans mission, of the
proposed conversion/continuation. Any Notice of Conversion/Continuation for
conversion to, or continuation of, a Loan shall be irrevocable, and the
applicable Borrower shall be bound to convert or continue in accordance
therewith.
(d) Default Interest. Notwithstanding the rates of interest
specified in Section 4.01(a) or elsewhere herein, and to the extent permitted by
applicable law, effective immediately upon the occurrence of any Event of
Default and for as long thereafter as such Event of Default shall be continuing,
the principal balance of all Loans and of all other Obligations shall bear
interest at a rate which is two percent (2.0%) per annum in excess of the rate
of interest applicable to such Loans and Obligations from time to time.
(e) Computation of Interest. Interest on all Obliga tions (other
than Obligations of the Canadian Borrower) shall be computed on the basis of the
actual number of days elapsed in the period during which interest accrues and a
year of 360 days. Interest on all Obligations of the Canadian Borrower shall be
computed on the basis of the actual number of days elapsed in the
-96-
period during which interest accrues and a year of 365 or 366 days, as
applicable. In computing interest on any Loan, the date of the making of the
Loan shall be included and the date of payment shall be excluded.
(f) Changes; Legal Restrictions. If after the date hereof any Lender
or Issuing Bank determines that the adoption or implementation of or any change
in or in the interpretation or administration of any law or regulation or any
guideline or request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over any
Lender, Issuing Bank or over banks or financial institutions generally (whether
or not having the force of law), compliance with which, in each case after the
date hereof:
(i) subjects a Lender or an Issuing Bank (or its Applicable Lending
Office) to charges (other than Taxes) of any kind which is applicable to
the Revolving Credit Commitments of the Lenders and/or the Issuing Banks
to make Fixed Rate Loans or to Issue and/or participate in Letters of
Credit; or
(ii) imposes, modifies or holds applicable, any reserve (other than
reserves taken into account in calculating any Fixed Rate), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities (including those
pertaining to Letters of Credit) in or for the account of, advances or
loans by, commitments made or other credit extended by, or any other
acquisition of funds by, a Lender or an Issuing Bank or any Applicable
Lending Office or Fixed Rate Affiliate of that Lender or Issuing Bank;
and the result of any of the foregoing is to increase the cost to that Lender or
Issuing Bank of making, renewing or maintaining the Loans or its Revolving
Credit Commitments or issuing or participating in the Letters of Credit or to
reduce any amount receivable thereunder; then, in any such case, upon written
demand by such Lender or Issuing Bank (with a copy of such demand to the Agent),
the Borrowers (other than the Canadian Borrower, which so agrees to pay only the
Canadian Lenders) jointly and severally agree promptly to pay to the Agent for
the account of such Lender or Issuing Bank, from time to time as specified by
such Lender or Issuing Bank, such amount or amounts as may be necessary to
compensate such Lender or Issuing Bank or its Fixed Rate Affiliate for any such
additional cost incurred or reduced amount received. Such demand shall be
accompanied by a statement as to the amount of such compensation and include a
reasonably detailed summary of the basis for such demand. Such statement shall
be conclusive and binding for all purposes, absent manifest error.
-97-
(g) Confirmation of Fixed Rate. Upon the reasonable request of any
Borrower from time to time, the Agent shall promptly provide to such Borrower
such information with respect to the applicable Fixed Rate as may be so
requested.
4.02. Special Provisions Governing Fixed Rate Loans.
With respect to Fixed Rate Loans:
(a) Amount of Advance. Each Fixed Rate Loan shall be for a minimum
amount of $5,000,000 (or the Dollar Equivalent of $1,000,000 for Fixed Rate
Loans denominated in an Optional Currency) and in integral $1,000,000 (or
approximately similar intervals in Optional Currencies) in excess of that
amount. Such minimum levels may be achieved under the U.S. Facility by combining
the Borrowings of more than one Borrower so long as the minimum amount of any
single Borrowing is $1,000,000.
(b) Determination of Interest Period. By giving notice as set forth
in Section 2.01(c) (with respect to a new Borrowing of U.S. Loans or
Multicurrency Loans) or Section 4.01(c) (with respect to a conversion into or
continuation of a Fixed Rate Loan), the applicable Borrower shall have the
option, subject to the other provisions of this Section 4.02, to select an
interest period (each, an "Interest Period") to apply to the Loans described in
such notice, subject to the following provisions:
(i) Such Borrower may only select, as to a par ticular Borrowing of
Fixed Rate Loans, a Interest Period of either one (1), two (2), three (3)
or, to the extent consented to by the Agent, six (6) months in duration;
(ii) In the case of immediately successive Interest Periods
applicable to a Borrowing of Fixed Rate Loans, each successive Interest
Period shall commence on the day on which the next preceding Interest
Period expires;
(iii) If any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall be extended to expire on
the next succeeding Business Day if the next succeeding Business Day
occurs in the same calendar month, and if there shall be no succeeding
Business Day in such calendar month, such Interest Period shall expire on
the immediately preceding Business Day;
(iv) Such Borrower may not select a Interest Period as to any Loan
if such Interest Period terminates later than the Revolving Credit
Termination
-98-
Date;
(v) There shall be no more than five (5) Interest Periods for Fixed
Rate Loans denominated in Dollars and no more than ten (10) Interest
Periods in the aggregate for Fixed Rate Loans denominated in Optional
Currencies in effect at any one time; and
(vi) No Fixed Rate Loan may be borrowed on the Closing Date, and no
Notice of Conversion/Continuation may be delivered prior to the Closing
Date.
(c) Determination of Interest Rate. As soon as prac ticable on the
applicable Fixed Rate Determination Date, the Agent shall determine (pursuant to
the procedures set forth in the definition of "Fixed Rate") the interest rate
which shall apply to Fixed Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and currency and shall promptly
give notice thereof (in writing or by telephone confirmed in writing) to the
applicable Borrowers and to each Lender (other than the Canadian Lenders). The
Agent's determination shall be presumed to be correct, absent manifest error,
and shall be binding upon such Borrowers.
(d) Interest Rate Unascertainable, Inadequate or Unfair. In the
event that (x) in the case of U.S. Loans, at least one (1) Business Day before
and (y) in the case of Multicurrency Loans, on the Fixed Rate Determination Date
with respect to any Fixed Rate Loan in the relevant currency:
(i) the Agent determines that adequate and fair means do not exist
for ascertaining the applicable interest rates by reference to which the
applicable Fixed Rate for the applicable Available Currency then being
determined is to be fixed;
(ii) the Agent determines that deposits in such currency and in the
principal amounts of the Fixed Rate Loans comprising such Borrowing are
not generally available in the London interbank market for a period equal
to such Interest Period; or
(iii) the Requisite Lenders in the Applicable Credit Facility advise
the Agent that the applicable Fixed Rate for the applicable Available
Currency, as determined by the Agent, after taking into account the
adjustments for reserves and increased costs provided for in Section
4.01(f), will not adequately and fairly reflect the cost to such Lenders
of funding the relevant Fixed Rate Loans in the currency in which such
Loans are denominated;
then the Agent shall forthwith give notice thereof to the
-99-
Borrowers, whereupon (until the Agent notifies the Borrowers that the
circumstances giving rise to such suspension no longer exist) the right of the
Borrowers to elect to have Loans bear interest based upon the Fixed Rate in such
currency shall be suspended and each outstanding Fixed Rate Loan which is
denominated in the affected currency shall be converted into a Floating Rate
Loan denominated in such currency on the last day of the then current Interest
Period therefor, and any Notice of Borrowing with respect to Loans denominated
in such currency for which Revolving Loans have not then been made shall be
deemed to be a request for Floating Rate Loans in such currency, notwithstanding
any prior election by a Borrower to the contrary.
(e) Illegality. (i) If at any time any Lender deter mines (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties) that the making or continuation of any Fixed Rate Loan in any
currency has become unlawful or impermissible by compliance by that Lender with
any law, governmental rule, regulation or order of any Governmental Authority
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful or would result in costs or penalties), then, and in
any such event, such Lender may give notice of that determination, in writing,
to the Borrowers and the Agent, and the Agent shall promptly transmit the notice
to each other Lender.
(ii) When notice is given by a Lender under Section 4.02(e)(i), (A)
the Borrowers' right to request from such Lender and such Lender's obligation,
if any, to make Fixed Rate Loans in such currency shall be immediately
suspended, and such Lender shall make a Floating Rate Loan as part of any
requested Borrowing of Fixed Rate Loans in such currency and (B) if the affected
Fixed Rate Loan or Loans are then outstanding, the applicable Borrower shall
immediately, or if not permitted by applicable law to do so immediately, then by
no later than the date it is permitted to do so in accordance with applicable
law, upon at least one (1) Business Day's prior written notice to the Agent and
the affected Lender, convert each such Loan into a Floating Rate Loan.
(iii) If at any time after a Lender gives notice under Section
4.02(e)(i) in respect of a Fixed Rate Loan in any currency such Lender
determines that it may lawfully make Fixed Rate Loans in such currency, such
Lender shall promptly give notice of that determination, in writing, to the
Borrowers and the Agent, and the Agent shall promptly transmit the notice to
each other Lender. The Borrowers' right to request, and such Lender's
obligation, if any, to make Fixed Rate Loans shall thereupon be restored.
(f) Compensation. In addition to all amounts required to be paid by
the Borrower pursuant to Section 4.01, each
-100-
Borrower agrees to compensate each Lender, upon demand, for all losses, expenses
and liabilities (including, without limitation, any loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund or maintain such Lender's Fixed Rate Loans made to such
Borrower but excluding any loss of the Applicable Fixed Rate Margin on the
relevant Loans) which that Lender may sustain (i) if for any reason a Borrowing
of, conversion into or continuation of such Fixed Rate Loans does not occur on a
date specified therefor in a Notice of Borrowing or a Notice of
Conversion/Continuation given by such Borrower or a successive Interest Period
does not commence after notice therefor is given pursuant to Section 4.01(c),
including, without limitation, pursuant to Section 4.02(d), (ii) if for any
reason any Fixed Rate Loan made to such Borrower is prepaid (including, without
limitation, mandatorily pursuant to Section 3.01) on a date which is not the
last day of the applicable Interest Period (it being understood and agreed that,
notwithstanding anything contained in this Agreement to the contrary, so long as
no Default or Event of Default shall have occurred and be continuing, such
Borrower (other than the Canadian Borrower) may, in lieu of making a mandatory
prepayment of a Fixed Rate Loan which would otherwise be required to be made
under this Agreement on a date which is not the last day of the applicable
Interest Period, deposit an amount equal to the amount which would otherwise be
required to be so prepaid (plus interest accrued thereon for the appropriate
number of days at the rate applicable to such Loan) into the U.S. Cash
Collateral Account (or, in the case of Fixed Rate Loans denominated in an
Optional Currency, an appropriate Cash Collateral Account) as Cash Collateral
for application by the Agent to such Loan on the last day of such Interest
Period), (iii) as a consequence of a required conversion of such Fixed Rate Loan
to a Floating Rate Loan as a result of any of the events indicated in Section
4.02(d) or (e) or (iv) as a consequence of any failure by such Borrower to repay
Fixed Rate Loans when required by the terms hereof. The Lender making demand for
such compensation shall deliver to the applicable Borrower concurrently with
such demand a written statement in reasonable detail as to such losses, expenses
and liabilities, and this statement shall be conclusive as to the amount of
compensation due to that Lender, absent manifest error.
(g) Booking of Fixed Rate Loans. Any Lender may make, carry or
transfer Fixed Rate Loans at, to or for the account of its Fixed Rate Lending
Office or Fixed Rate Affiliate or its other offices or Affiliates. No Lender
shall be entitled, however, to receive any greater amount under Sections 3.03,
3.04, 4.01(f) or 4.02(f) as a result of the transfer of any such Fixed Rate Loan
to any office (other than such Fixed Rate Lending Office) or any Affiliate
(other than such Fixed Rate Affiliate) than such Lender would have been entitled
to receive immediately prior thereto, unless, such Lender provides reasonably
-101-
satisfactory evidence to the Company that (i) the transfer occurred at a time
when circumstances giving rise to the claim for such greater amount did not
exist and (ii) such claim in the relevant amount would have arisen even if such
transfer had not occurred.
(h) Affiliates Not Obligated. No Fixed Rate Affiliate or other
Affiliate of any Lender shall be deemed a party hereto or shall have any
liability or obligation hereunder.
4.03. Fees. (a) Letter of Credit Fee. In addition to any charges
paid pursuant to Section 2.02(g), each Domestic Borrower agrees to pay to the
Agent for the account of the U.S. Lenders as provided in the following sentence,
and the Canadian Borrower agrees to pay to the Canadian Agent for the account of
the Canadian Lenders as provided in the following sentence, with respect to any
Letter of Credit Issued by any Issuing Bank for the account of such Borrower, a
fee per annum (the "Letter of Credit Fee") equal to two percent (2.0%) as of the
date of each such payment on the undrawn face amount of such Letter of Credit,
payable in arrears on the first Business Day of each calendar month for the
preceding calendar month and on the date on which such Letter of Credit expires
in accordance with its terms; provided, however, effective immediately upon the
occurrence of any Event of Default and for so long thereafter as such Event of
Default shall be continuing, the rate at which the Letter of Credit Fees shall
accrue and be payable shall be equal to four percent (4.0%) per annum. The Agent
shall pay each Letter of Credit Fee to the U.S. Lenders in accordance with their
respective Pro Rata Shares of the U.S. Facility, and the Canadian Agent shall
pay each Letter of Credit Fee to the Canadian Lenders in accordance with their
respective Pro Rata Shares of the Canadian Facility.
(b) Unused Commitment Fee. The Domestic Borrowers agree to pay to
the Agent, for the account of the U.S. Lenders in accordance with their
respective Pro Rata Shares of the U.S. Facility, and the Canadian Borrower
agrees to pay to the Canadian Agent, for the account of the Canadian Lenders in
accordance with their respective Pro Rata Shares of the Canadian Facility, a fee
(the "Unused Commitment Fee"), accruing from the Closing Date at a rate of
one-half of one percent (0.5%) per annum on the average amount by which the
Revolving Credit Commitments under such Credit Facility exceed the Revolving
Credit Obligations under such Credit Facility for the period commencing on the
Closing Date and ending on the Revolving Credit Termination Date, the accrued
portion of such fee being payable (A) monthly, in arrears, on the first Business
Day of the immediately succeeding calendar month, commencing on the first such
day after the Closing Date and (B) on the Revolving Credit Termination Date
(whether or not such date occurs on, before or after the Closing Date).
Notwithstanding the foregoing, in the event that any
-102-
Lender fails to fund its Pro Rata Share of any Revolving Loan requested by a
Borrower which such Lender is obligated to fund under the terms hereof, such
Lender shall not be entitled to any Unused Commitment Fees with respect to its
Revolving Credit Commitment under the applicable Credit Facility until such
failure has been cured in accordance with Section 3.02(b)(iv)(B) and no Borrower
shall be required to pay any Unused Commitment Fees with respect to such Credit
Facility to such Lender for such period.
(c) Other Fees. The Borrowers agree to pay to the Agent solely for
its own account such other fees as are set forth in the Letter Agreement.
(d) Calculation and Payment of Fees. All of the above fees that are
based on a per annum rate shall be calculated on the basis of the actual number
of days elapsed in a 360-day year. All such fees shall be payable in addition
to, and not in lieu of, interest, expense reimbursements, indemnification and
other Obligations. Fees shall be payable to the applicable Payment Account in
accordance with Section 3.02. All fees payable hereunder shall be fully earned
and, subject only to Section 13.01(c), nonrefundable when paid. All fees
specified or referred to herein due to the Agent, any Issuing Bank or any
Lender, including, without limitation, those referred to in this Section 4.03,
shall bear interest, if not paid when due, at the interest rate for Loans in
accordance with Section 4.01(d), shall constitute Obligations and shall be
secured by the Collateral.
ARTICLE V
CONDITIONS TO LOANS AND LETTERS OF CREDIT
5.01. Conditions Precedent to the Initial Loans and Letters of
Credit. The obligation of each Lender on the Closing Date to make its Revolving
Loan requested to be made by it and the agreement of each Issuing Bank on the
Closing Date to Issue Letters of Credit, shall be subject to the satisfaction of
all of the following conditions precedent:
(a) Documents. The Agent (on behalf of itself and the Lenders) shall
have received on or before the Closing Date all of the following:
(i) this Agreement, the Notes and all other agreements, documents
and instruments (other than items designated as "post-closing" items)
described in the List of Closing Documents attached hereto and made a part
hereof as Exhibit T (the "Closing List"), each duly executed where
appropriate and in form and substance satisfactory to the Lenders and in
sufficient copies for each of the Lenders; without limiting the foregoing,
the Borrowers hereby direct
-103-
their counsel, (A) XxXxxxxxx, Will & Xxxxx and (B) each of its other
counsel listed in such List of Closing Documents to prepare and deliver to
the Agent, the Lenders, the Issuing Banks and Sidley & Austin, the
opinions referred to in the Closing List with respect to such counsel;
(ii) the Company's historical financial statements as of September
30, 1995, and as of each succeeding month-end date for which such
financial statements are available prior to the Closing Date, accompanied
by appropriate pro forma financial statements as of December 31, 1995, as
well as a pro forma estimated balance sheet of Holdings and its
Subsidiaries as of the Closing Date, giving effect to the transactions
contemplated in the Transaction Documents, and the Initial Projections;
and
(iii) such additional documentation as the Agent and the Lenders may
reasonably request.
(b) Collateral Information; Perfection of Liens. The Agent shall
have received complete and accurate information from the Company with respect to
the name and the location of the principal place of business and chief executive
office for the Company and each of its Subsidiaries; all Uniform Commercial Code
and other filing and recording fees and taxes shall have been paid or duly
provided for; and the Agent shall have received evidence to the satisfaction of
the Lenders that all Liens granted to the Agent with respect to all Collateral
are valid and effective and, upon the filing of the duly executed Uniform
Commercial Code financing statements (or similar filings required by the
applicable statutes of Canada, any political subdivision thereof or other
foreign jurisdiction in which the Agent is being granted a Lien by the
Borrowers) which shall have been delivered to the Agent (in the case of such
financing statements for Connecticut and Texas, and, to the extent not
prohibited by any Contractual Obligation of Mobil Corporation or any of its
Subsidiaries, prior to the Closing Date in time to have such statements filed
with the relevant filing office at least two (2) Business Days prior to the
Closing Date), will be perfected and of first priority, except as otherwise
permitted under this Agreement. All certificates representing Capital Stock
included in the Collateral shall have been delivered to the Agent (with duly
executed stock powers, as appropriate) and all instruments included in the
Collateral shall have been delivered to the Agent (duly endorsed to the Agent).
(c) Acquisition Agreement and Related Matters. The Agent and the
Lenders shall be satisfied that: (i) the Acquisition Agreement and all other
Acquisition Documents which are to be entered into as of or prior to the Closing
Date shall have been duly approved and executed and delivered by the parties
thereto, (ii) the Registration Statement shall have been declared
-104-
effective by the Securities and Exchange Commission, (iii) shares of Common
Stock and/or Nonvoting Common Stock shall have been purchased in accordance with
the Registration Statement and/or the Nonvoting Common Stock Purchase Agreement
for an aggregate purchase price of not less than $15,000,000, (iv) Holdings
shall have issued the Preferred Stock to Xxxxxxxxxx Holding Corporation (or a
Mobil Affiliate (as defined in the Acquisition Agreement)) for an aggregate
purchase price of not less than $10,000,000, (v) the Finova Indebtedness shall
have been funded, and the Company shall have received not less than $8,000,000
of proceeds therefrom, (vi) all conditions precedent to closing under the
Acquisition Agreement and the other Acquisition Documents which are to be
entered into as of or prior to the Closing Date have been met (or waived with
the consent of the Requisite Lenders) and such documents are, or simultaneously
with the execution hereof, shall be, in full force and effect, and (vii) good
and marketable title to the Capital Stock of the Company purported to be
transferred by the terms of the Acquisition Agreement and the Acquisition
Documents, free and clear of all Liens, has been transferred to Holdings on
terms satisfactory to the Agent and the Lenders.
(d) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall exist, and the Agent shall not have
received any notice that any action, suit, investigation, litigation or
proceeding is pending or threatened in any court or before any arbitrator or
Governmental Authority which (i) purports to enjoin, prohibit, restrain or
otherwise affect (A) the making of the Loans on the Closing Date or (B) the
consummation of the transactions contemplated pursuant to the Transaction
Documents or (ii) would be reasonably expected to impose or result in the
imposition of a Material Adverse Effect.
(e) No Change in Condition. No change deemed material by the
Lenders, in their opinion, in the condition (financial or otherwise), business,
performance, assets, operations or prospects of Holdings, the Company, or any of
the Company's Subsidiaries shall have occurred that would (i) cause the Initial
Projections to be unreasonable in light of then current circumstances, (ii) have
a material adverse effect on the ability of Holdings and the Borrowers to
perform their material obligations under the Loan Documents or (iii) have a
material adverse effect on the ability of the Lenders, the Issuing Banks or the
Agent to enforce the Loan Documents.
(f) No Default. No Event of Default or Default shall have occurred
and be continuing or would result from the making of the Loans requested to be
made or the Issuance of the Letters of Credit requested to be Issued on the
Closing Date.
(g) Representations and Warranties. All of the repre-
-105-
sentations and warranties contained in Section 6.01 and in any of the other Loan
Documents shall be true and correct on and as of the Closing Date, both before
and immediately after giving effect to the making of the Loans.
(h) Fees and Expenses Paid. There shall have been paid to the Agent,
for the account of the Lenders and the Agent, for their respective individual
accounts, all fees (including, without limitation, the reasonable legal fees of
counsel to the Agent and local counsel to the Agent for the benefit of the
Lenders) due and payable on or before the Closing Date (including, without
limitation, all such fees described in the Letter Agreement), and all expenses
(including, without limitation, legal expenses) due and payable on or before the
Closing Date.
(i) Closing Date. The Closing Date shall have occurred on or prior
to February 12, 1996.
(j) Consents, Etc. Except as set forth on Schedule 6.01-E, each of
Holdings, the Company and the Company's Subsidiaries shall have received all
material consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all
material Permits of, and effected all notices to and filings with, any
Governmental Authority as may be necessary to allow each of Holdings, the
Company, and the Company's other Subsidiaries lawfully (A) to execute, deliver
and perform, in all material respects, their respective obligations hereunder,
under the other Transaction Documents to which each of them is, or shall be, a
party and each other agreement or instrument to be executed and delivered by
each of them pursuant thereto or in connection therewith and (B) to create and
perfect the Liens on the Collateral to be owned by each of them in the manner
and for the purpose contemplated by the Loan Documents. No such consent or
authorization shall impose any conditions upon Holdings, the Company, or any of
the Company's Subsidiaries that are not acceptable to the Lenders.
(k) Transaction Costs. The Borrowers and Holdings shall have paid
and be obligated to pay not more than $6,600,000 in Transaction Costs.
(l) Environmental Review. The Lenders shall have been provided with
a written report or written reports of a Phase II investigation or
investigations conducted by ATEC Associates, Inc., identifying potential
environmental Liabilities and Costs to which Holdings, the Company and the
Company's Subsidiaries may be subject, in form and substance satisfactory to the
Lenders and the Agent.
5.02. Conditions Precedent to All Subsequent Revolving
-106-
Loans, Swing Loans and Letters of Credit. The obligation of each Lender to make
any Revolving Loan and of any Swing Loan Bank to make any Swing Loan, requested
to be made by it on any date after the Closing Date, the agreement of each
Issuing Bank to Issue any Letter of Credit on any date after the Closing Date,
and the agreement of the Agent to honor any Notice of Withdrawal is subject to
the following conditions precedent as of each such date:
(a) Representations and Warranties. As of such date, both before and
after giving effect to the Loans to be made or the Letter of Credit to be Issued
on such date, all of the representations and warranties of Holdings, the Company
and the Company's Subsidiaries contained in Section 6.01 and in any other Loan
Document (other than representations and warranties which expressly speak as of
a different date, which representations shall be only made on such date) shall
be true and correct in all material respects.
(b) No Default. No Event of Default or Default shall have occurred
and be continuing or would result from the making of the requested Loan or the
Issuance of the requested Letter of Credit.
(c) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and the Agent shall not have
received from any Lender, any Swing Loan Bank or Issuing Bank, as the case may
be, notice that, in the judgment of such Person, any action, suit,
investigation, litigation or proceeding is pending or threatened in any court or
before any arbitrator or Governmental Authority which is likely to enjoin,
prohibit or restrain, or impose or result in the imposition of any material
adverse condition upon, (i) such Lender's making of the requested Loan or
participation in the requested Letter of Credit, (ii) any Swing Loan Bank's
making of the requested Swing Loan or (iii) such Issuing Bank's issuance of the
requested Letter of Credit.
(d) No Material Adverse Change. No change (other than as
contemplated in the Registration Statement) deemed material by the Requisite
Lenders, in their opinion, in the condition (financial or otherwise), business,
performance, assets, operations or prospects of the Domestic Borrowers, taken as
a whole, or the Canadian Borrower, individually, shall have occurred since
December 31, 1994, which change has had or is reasonably likely to have a
Material Adverse Effect.
Each submission by a Borrower to the Agent of a Notice of Bor rowing with
respect to a Revolving Loan or Swing Loan, each acceptance by a Borrower of the
proceeds of each such Loan so made, each submission by a Borrower to an Issuing
Bank of a Notice of a Letter of Credit Issuance and the issuance of such
-107-
Letter of Credit, and each submission by a Borrower to the Agent of a Notice of
Withdrawal, shall constitute a representation and warranty by such Borrower as
of the Funding Date in respect of such Revolving Loan, as of the Swing Loan
Funding Date in respect of such Swing Loan, as of the date of issuance of such
Letter of Credit and as of the date of such Notice of Withdrawal, that all the
conditions contained in subsections (a), (b) and (c) of this Section 5.02 have
been satisfied or waived in accordance with Section 13.07 (it being understood
that a Notice of Withdrawal shall be deemed to be a request for a Borrowing of
Revolving Loans for purposes of determining whether such conditions have been
satisfied or waived).
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01. Representations and Warranties of the Borrowers. In order to
induce the Lenders and the Issuing Banks to enter into this Agreement and to
make the Loans and the other financial accommodations to the Borrowers and to
Issue the Letters of Credit described herein, each of Holdings and the Borrowers
(other than the Canadian Borrower, which so represents and warrants in favor of
the Canadian Lenders, only with respect to itself and its unconsolidated
liabilities, assets, business and opportunities) hereby represents and warrants
to each Lender, each Issuing Bank and the Agent as of the Closing Date and
thereafter on each date as required by Section 5.02(a) that the following
statements are true, correct and complete:
(a) Organization; Corporate Powers. Each of Holdings, the Company
and the Company's Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (ii) is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each jurisdiction in which failure to be
so qualified and in good standing has or is reasonably likely to have a Material
Adverse Effect and (iii) has all requisite corporate power and authority to own,
operate and encumber its Property and to conduct its business in all material
respects as presently conducted.
(b) Authority. (i) Each of Holdings, the Company and the Company's
Subsidiaries has the requisite corporate power and authority to execute, deliver
and perform each of the Loan Documents to which it is a party.
(ii) The execution, delivery and performance, as the case may be, of
each of the Loan Documents which have been executed and to which any of
Holdings, the Company or any of the Company's Subsidiaries is a party and the
consummation of the transactions contemplated thereby, have been duly approved
by
-108-
each of the boards of directors and (to the extent required by law) the
shareholders of Holdings, the Company and such Subsidiary, respectively, and
such approvals have not been rescinded, revoked or modified in any material
respect. No other corporate action or proceedings on the part of Holdings, the
Company or any of the Company's Subsidiaries is necessary to consummate such
transactions.
(iii) Each of the Loan Documents to which Holdings, the Company or any
of the Company's Subsidiaries is a party has been duly executed, or delivered on
behalf of Holdings, the Company or such Subsidiary, as the case may be, and
constitutes its legal, valid and binding obligation, enforceable against such
Person in accordance with its terms (except as such enforcement may be limited
by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance and
other laws affecting the enforcement of creditors' rights generally and to the
effect of general equitable principles (whether considered in a proceeding in
equity or at law)) and is in full force and effect.
(c) Subsidiaries; Ownership of Capital Stock. Schedule 6.01-C (i)
contains a diagram indicating the corporate structure of Holdings, the Company,
the Company's Subsidiaries and any other Affiliate thereof in which Holdings,
the Company or any of the Company's Subsidiaries holds an equity interest as of
the Closing Date after giving effect to the transactions contemplated in the
Transaction Documents; and (ii) accurately sets forth as of the Closing Date
after giving effect to the transactions contemplated in the Transaction
Documents (A) the correct legal name, the jurisdiction of incorporation, and
Employer Identification Number of each of Holdings, the Company and the
Company's Subsidiaries, and the jurisdictions in which each of Holdings, the
Company and the Company's Subsidiaries is qualified to transact business as a
foreign corporation, (B) the authorized, issued and outstanding shares of each
class of Capital Stock of Holdings, the Company and each of the Company's
Subsidiaries and the owners of such shares, and (C) a summary of the direct and
indirect partnership, joint venture, or other equity interests, if any, of
Holdings, the Company and each Subsidiary of the Company in any Person that is
not a corporation. None of the issued and outstanding Capital Stock of Holdings,
the Company or any of the Company's Subsidiaries is subject to any vesting,
redemption, or repurchase agreement, and there are no warrants or options
outstanding with respect to such Capital Stock except as provided in the ESOP,
the Shareholders' Agreement and the Nonvoting Common Stock Purchase Agreement.
The outstanding Capital Stock of Holdings, the Company and each of the Company's
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable
and is not Margin Stock.
(d) No Conflict. The execution, delivery and perfor xxxxx of each of
the Loan Documents to which Holdings, the
-109-
Company or any of the Company's Subsidiaries is a party do not and shall not (i)
conflict with the Constituent Documents of Holdings, the Company or any such
Subsidiary, (ii) to the best Knowledge of Holdings and its Subsidiaries,
constitute a tortious interference with any Contractual Obligation of any
Person, (iii) except as set forth on Schedule 6.01-D conflict with, result in a
breach of or constitute (with or without notice or lapse of time or both) a
default under any material Requirement of Law or any Transaction Document or
other material Contractual Obligation of Holdings, the Company or any such
Subsidiary, or require the termination of any Transaction Document or other
material Contractual Obligation, (iv) result in or require the creation or
imposition of any Lien whatsoever upon any of the Property or assets of
Holdings, the Company or any such Subsidiary, other than Liens contemplated by
the Loan Documents and the Finova Documents, or (v) require any approval of
Holdings', the Company's or any such Subsidiary's shareholders that has not been
obtained.
(e) Governmental Consents, etc. Except as set forth on Schedule
6.01-E, the execution, delivery and performance of each of the Loan Documents
(or, solely as of the Closing Date, the other Transaction Documents executed and
delivered on such date) to which Holdings, the Company or any of the Company's
Subsidiaries is a party do not and shall not require any registration with,
consent or approval of, or notice to, or other action to, with or by any
Governmental Authority, except (i) filings, consents or notices which have been
made, obtained or given, or, in a timely manner, shall be made, obtained, or
given, (ii) filings necessary to create or perfect security interests in the
Collateral, (iii) routine filings made in the ordinary course of business and
(iv) non-essential filings contemplated by the Transaction Documents but not
necessary to consummate the transactions contemplated thereby. None of Holdings,
the Company or any of the Company's Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, or the Investment Company Act of 1940, or any other
federal or state statute or regulation which limits its ability to incur
indebtedness or its ability to consummate the transactions contemplated in the
Loan Documents.
(f) Accommodation Obligations; Contingencies. Except as set forth on
Schedule 1.01.3, none of Holdings, the Company or any of the Company's
Subsidiaries has any Accommodation Obliga tion, contingent liability or
liability for any Taxes, long-term lease or commitment, not reflected in its
financial statements delivered to the Agent on or prior to the Closing Date or
otherwise disclosed to the Agent and the Lenders in the other Schedules hereto,
which shall have or is reasonably likely to have a Material Adverse Effect.
-110-
(g) Restricted Junior Payments. None of Holdings, the Company or any
of the Company's Subsidiaries has directly or indirectly declared, ordered, paid
or made or set apart any sum or Property for any Restricted Junior Payment or
agreed to do so, except as permitted pursuant to Section 9.06 hereof.
(h) Financial Position. The Initial Projections, the pro forma
financial statements referred to in Section 5.01(a)(ii) and each of the
Company's business plans and all other financial projections and related
materials and documents delivered to the Lenders pursuant hereto were prepared
in good faith and are based upon facts and assumptions that are reasonable in
light of the then current and foreseeable business conditions and prospects of
the Company and represent management's opinion of the Company's projected
financial performance based on the information available to Holdings and the
Company at the time so furnished.
(i) Litigation; Adverse Effects. Except as set forth in Schedule
6.01-I, there is no action, suit, audit, proceeding, allegation of defective
pricing, investigation or arbitration (or series of related actions, suits,
proceedings, allegations, investigations or arbitrations) before or by any
Governmental Authority or private arbitrator pending or, to the Knowledge of
Holdings, the Company or any of the Company's Subsidiaries, threatened against
Holdings, the Company or any of the Company's Subsidiaries or any Property of
any of them (i) challenging the validity or the enforceability of any of the
Transaction Docu ments or (ii) which shall have or is reasonably likely to have
a Material Adverse Effect. None of Holdings, the Company or any of the Company's
Subsidiaries is (A) in violation of any applicable Requirements of Law which
violation shall have or is reasonably likely to result in a Material Adverse
Effect, or (B) subject to or in default with respect to any judgment, writ,
injunction, restraining order or order of any nature, decree, rule or regulation
of any court or Governmental Authority, in each case which shall have or is
reasonably likely to have a Material Adverse Effect.
(j) No Material Adverse Change. Except as contemplated in the
Registration Statement, since December 31, 1994 there has occurred no event
which shall have or is reasonably likely to have a Material Adverse Effect.
(k) Payment of Taxes. All tax returns and reports of each of
Holdings, the Company and the Company's Subsidiaries required to be filed have
been timely filed, and all taxes, assessments, fees and other governmental
charges thereupon and upon their respective Property, assets, income and
franchises which are shown in such returns or reports to be due and payable have
been paid other than such taxes, assessments, fees and other governmental
charges (i) which are being contested in good faith by Holdings, the Company or
such Subsidiary, as the case may be,
-111-
by appropriate proceedings diligently instituted and conducted and (ii) with
respect to which a reserve or other appropriate provision, if any, as is
required in conformity with GAAP shall have been made. Neither the Company nor
Holdings has any Knowl edge of any proposed tax assessment against Holdings, the
Company or any of the Company's Subsidiaries that shall have or is reasonably
likely to have a Material Adverse Effect.
(l) Performance. None of Holdings, the Company or any of the
Company's Subsidiaries has received notice or has actual Knowledge that (i) it
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to it, or (ii) any condition exists which, with the giving of notice
or the lapse of time or both, would constitute a default with respect to any
such Contractual Obligation, in each case, except where such default or
defaults, if any, shall not have or are not reasonably likely to have a Material
Adverse Effect.
(m) Disclosure. The representations and warranties of each of
Holdings, the Company and the Company's Subsidiaries contained in the Loan
Documents and, solely as of the Closing Date, the other Transaction Documents
and the Registration Statement, and all certificates and documents delivered to
the Agent and the Lenders pursuant to the terms hereof and the other Loan
Documents, do not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained herein
or therein, in light of the circumstances under which and the time at which they
were made, not misleading, provided that (a) the statements contained in the
Registration Statement describing documents and agreements are summary only and
as such are qualified in their entirety by reference to such documents and
agreements, (b) to the extent any such information in the Registration Statement
was based upon or constitutes a forecast or projection, each of Holdings, the
Company and the Company's Subsidiaries represents only that it acted in good
faith and utilized reasonable assumptions, due and careful consideration and the
best information Known to it at the time in the preparation of such information
and (c) as to the information and representations and warranties in the
Registration Statement and other certificates and documents attached as exhibits
thereto that is specified as having been supplied by third parties, each of
Holdings, the Company and the Company's Subsidiaries represents only that it is
not aware of any material misstatement therein or omission therefrom. Neither
Holdings nor the Company has intentionally withheld any fact from the Agent, any
Issuing Bank or any Lender in regard to any matter which shall have or is
reasonably likely to have a Material Adverse Effect.
(n) Requirements of Law. Each of Holdings, the Company and the
Company's Subsidiaries is in compliance with all
-112-
Requirements of Law applicable to it and its business, in each case where the
failure to so comply individually or in the aggregate shall have or is
reasonably likely to have a Material Adverse Effect.
(o) Environmental Matters. Except as set forth in Schedule 6.01-O:
(A) the operations of Holdings, the Company and the Company's
Subsidiaries comply with all applicable Environmental, Health or Safety
Requirements of Law where failure to so comply has or is reasonably likely
to have a Material Adverse Effect;
(B) Holdings, the Company and each of the Company's Subsidiaries
have obtained or have taken appropriate steps, as required by
Environmental, Health or Safety Requirements of Law, to obtain all
material environmental, health and safety Permits necessary for their
respective operations, and all such Permits are in good standing and each
of Holdings, the Company and each of the Company's Subsidiaries are
currently in compliance with such Permits where failure to so comply has
or is reasonably likely to have a Material Adverse Effect;
(C) to the Company's Knowledge, none of Holdings, the Company or the
Company's Subsidiaries or any of their respective operations or present or
past Property are subject to any investigation or any judicial or
administrative proceeding, order, judgment, settlement, decree, or other
agreement alleging, respecting or addressing (i) a violation of any
Environmental, Health or Safety Requirement of Law where such violation
has or is reasonably likely to have a Material Adverse Effect; (ii) any
Remedial Action where such Remedial Action has or is reasonably likely to
have a Material Adverse Effect; or (iii) any Claims or Liabilities and
Costs arising from the Release or threatened Release of a Contaminant into
the environment where such Claims or Liabilities and Costs has or is
reasonably likely to have a Material Adverse Effect, nor has Holdings, the
Company or any of the Company's Subsidiaries received any notice of the
foregoing;
(D) to the Company's Knowledge, none of Holdings, the Company or the
Company's Subsidiaries is the owner or operator of any Property which has
any of the following which could result in a liability that is reasonably
likely to have a Material Adverse Effect:
(i) any past or present on-site generation, treatment,
recycling, storage or disposal of any hazardous waste, as that term
is defined under 40
-113-
C.F.R. Part 261 or any state or local equivalent or any
similar statute of Canada, the United Kingdom, another
foreign jurisdiction, or political subdivision thereof;
(ii) any past or present landfill, waste-pile, underground
storage tank or surface impoundment;
(iii) any asbestos-containing material or suspected
asbestos-containing material; or
(iv) any polychlorinated biphenyls (PCBs) used in hydraulic
oils, electrical transformers or other Equipment;
(E) to the Company's Knowledge, except as reported to the Agent
pursuant to Section 7.07, no Environmental Lien has attached to any
Property of Holdings, the Company or any of the Company's Subsidiaries;
(F) to the Company's Knowledge, except as reported to the Agent
pursuant to Section 7.07, there have been no Releases of any Contaminants
into the environment in quantities reportable pursuant to 40 C.F.R. 302 by
Holdings, the Company or any of the Company's Subsidiaries;
(G) to the Company's Knowledge, except as reported to the Agent
pursuant to Section 7.07, neither Holdings, nor the Company, nor any of
the Company's Subsidiaries has any liability in connection with any
Release or threatened Release of any Contaminants into the environment
that is reasonably likely to have a Material Adverse Effect ;
(H) to the Company's Knowledge, except as reported to the Agent
pursuant to Section 7.07, neither Holdings, nor the Company nor any of the
Company's Subsidiaries has sent or directly arranged for the transport of
any waste to any site listed or proposed for listing on the National
Priorities List ("NPL") pursuant to CERCLA, or any similar statute of
Canada, the United Kingdom, another foreign jurisdiction, or a political
subdivision thereof, or on the Comprehensive Environmental Response
Compensation Liability Information System List ("CERCLIS"), or any similar
state list;
(I) to the Company's Knowledge, except as reported to the Agent
pursuant to Section 7.07, none of Holdings', the Company's or the
Company's Subsidiaries' present or past Property is listed or proposed for
listing on the NPL pursuant to CERCLA, or any similar statute of Canada,
the United Kingdom, another foreign jurisdiction, or a political
subdivision thereof, or on the CERCLIS or any similar state list of sites
requiring Remedial Action, and the Company and
-114-
the Company's Subsidiaries are unaware of any conditions on such Property
which would qualify such Property for inclusion on any such list;
(J) none of Holdings, the Company or any of the Company's
Subsidiaries is subject to any Environmental Property Transfer Act as a
result of the transactions contemplated by the Loan Documents;
(K) none of the products Holdings, the Company or any of the
Company's Subsidiaries manufactures, distributes or sells, or has ever
manufactured, distributed or sold, contains asbestos-containing material
or suspected asbestos-containing material; and
(L) none of Holdings, the Company or any of the Company's
Subsidiaries is subject to any Environmental, Health or Safety
Requirements of Law relating to financial responsibility, including,
without limitation, those contained in 40 C.F.R. Parts 264 and 265,
Subparts H, and state and local law equivalents, and those contained in 40
C.F.R. Part 280, Subpart H, and state and local law equivalents.
(p) ERISA Matters. None of Holdings, the Company or the ERISA
Affiliates maintains or contributes to any Plan other than those listed on
Schedule 6.01-P hereto. With respect to each Plan which is intended to be
qualified under Section 401(a) of the Internal Revenue Code as currently in
effect, Holdings, the Company or an ERISA Affiliate has received or is in the
process of seeking, a favorable determination letter that the Plan is so
qualified and that each trust related to any such Plan is exempt from federal
income tax under Section 501(a) of the Internal Revenue Code as currently in
effect, except as disclosed on Schedule 6.01-P. None of Holdings, the Company or
the ERISA Affiliates has Knowledge of any reason why such Plans or trusts are
not qualified. Except as disclosed in Schedule 6.01-P, none of Holdings, the
Company or any of the Company's Subsidiaries maintains or contributes to any
employee welfare benefit plan within the meaning of Section 3(l) of ERISA which
provides benefits to employees after termination of employment other than as
required by Section 601 of ERISA. Holdings, the Company and all of the ERISA
Affiliates are in compliance in all material respects with the responsibilities,
obligations or duties imposed on them by ERISA, the Internal Revenue Code and
regulations promulgated thereunder with respect to all Plans. No Benefit Plan
has incurred any accumulated funding deficiency (as defined in Sections
302(a)(2) of ERISA and 412(a) of the Internal Revenue Code) whether or not
waived. Except as disclosed in Schedule 6.01-P, neither Holdings, nor the
Company, nor any ERISA Affiliate, nor any fiduciary of any Plan which is not a
Multiemployer Plan (i) has engaged in a nonexempt prohibited
-115-
transaction described in Section 406 of ERISA or Section 4975 of the Internal
Revenue Code or (ii) has taken or failed to take any action which would
constitute or result in a Termination Event. None of Holdings, the Company or
the ERISA Affiliates has incurred any potential liability under Section 4063,
4064, 4069, 4204 or 4212(c) of ERISA. None of Holdings, the Company or the ERISA
Affiliates has incurred any liability to the PBGC which remains outstanding.
There are no premium payments which have become due to the PBGC which are
unpaid. Schedule B to the most recent annual report filed with the IRS with
respect to each Benefit Plan and furnished to the Agent is complete and
accurate. Since the date of each such Schedule B, there has been no material
adverse change in the funding status or financial condition of the Benefit Plan
relating to such Schedule B. Neither Holdings, nor the Company, nor any ERISA
Affiliate has (i) failed to make a required contribution or payment to a
Multiemployer Plan or (ii) made a complete or partial withdrawal under Section
4203 or 4205 of ERISA from a Multiemployer Plan. Except as disclosed in Schedule
6.01-P, neither Holdings, nor the Company nor any ERISA Affiliate has failed to
make a required installment or any other required payment under Section 412 of
the Internal Revenue Code on or before the due date for such installment or
other payment. Neither Holdings, nor the Company, nor any ERISA Affiliate is
required to provide security to a Benefit Plan under Section 401(a)(29) of the
Internal Revenue Code due to a Plan amendment that results in an increase in
current liability for the plan year. Except as disclosed on Schedule 6.01-P,
neither Holdings, nor the Company, nor any of the ERISA Affiliates has, by
reason of the transactions contemplated hereby, any obligation to make any
payment to any employee pursuant to any Plan or existing contract or
arrangement. The Company has made available to the Agent copies of all of the
following: each Benefit Plan and related trust agreement (including all
amendments to such Plan and trust) in existence, or for which Holdings, the
Company or any ERISA Affiliate has taken any corporate action to authorize the
adoption thereof, as of the Closing Date and in respect of which Holdings, the
Company or any ERISA Affiliate is currently an "employer" as defined in section
3(5) of ERISA, and the most recent summary plan description, actuarial report,
determination letter issued by the IRS and Form 5500 filed in respect of each
such Benefit Plan in existence; a listing of all of the Multiemployer Plans
currently contributed to by Holdings, the Company or any ERISA Affiliate with
the aggregate amount of the most recent annual contributions required to be made
by Holdings, the Company and all ERISA Affiliates to each such Multiemployer
Plan, any information which has been provided to Holdings, the Company or an
ERISA Affiliate regarding withdrawal liability under any Multiemployer Plan and
the collective bargaining agreement pursuant to which such contribution is
required to be made; and each employee welfare benefit plan within the meaning
of Section 3(l) of ERISA which provides benefits to employees of
-116-
Holdings, the Company or any of the Company's Subsidiaries after termination of
employment other than as required by Section 601 of ERISA, the most recent
summary plan description for such plan and the aggregate amount of the most
recent annual payments made to terminated employees under each such plan.
(q) Foreign Employee Benefit Matters. Each Foreign Employee Benefit
Plan is in compliance in all material respects with all Requirements of Law
applicable thereto and the respective requirements of the governing documents
for such Plan. The aggregate of the liabilities to provide all of the accrued
benefits under any Foreign Pension Plan does not exceed the current fair market
value of the assets held in the trust or other funding vehicle for such Plan.
With respect to any Foreign Employee Benefit Plan maintained by Holdings, the
Company, any of the Company's Subsidiaries or any ERISA Affiliate (other than a
Foreign Pension Plan), reasonable reserves have been established in accordance
with prudent business practice or where required by ordinary accounting
practices in the jurisdiction in which such Plan is maintained. The aggregate
unfunded liabilities, after giving effect to any reserves for such liabilities,
with respect to such Plans are not material. There are no actions, suits or
claims (other than routine claims for benefits) pending or threatened against
Holdings, the Company, any of the Company's Subsidiaries or any ERISA Affiliate
with respect to any Foreign Employee Benefit Plan.
(r) Labor Matters. (i) Except as set forth in Schedule 6.01-R, as of
the Closing Date there is no collective bargaining agreement covering any of the
employees of Company or any Subsidiary of Company. To the Company's Knowledge,
except as set forth on Schedule 6.01-R, as of the Closing Date no attempt to
organize the employees of Company or any such Subsidiary is pending, threatened
or planned.
(ii) Set forth in Schedule 6.01-R or Schedule 6.01-P, as the case may
be, is a list, as of the Closing Date, of all material consulting agreements,
executive employment agreements, executive compensation plans, deferred
compensation agreements, employee pension plans or retirement plans, employee
profit sharing plans, employee stock purchase and stock option plans, and
severance plans of Company and its Subsidiaries providing for benefits for
employees of Company and its Subsidiaries.
(s) Securities Activities. None of Holdings, the Company or any of
the Company's Subsidiaries is engaged in the business of extending credit for
the purpose of purchasing or carrying Margin Stock.
(t) Solvency. After giving effect to the transactions contemplated
in the Transaction Documents and the Loans to be made on the Closing Date or
such other date as Loans requested
-117-
hereunder are made and the disbursement of the proceeds of such Loans pursuant
to the Company's instructions, each of Holdings, each Borrower and each
Subsidiary Guarantor is Solvent.
(u) Patents, Trademarks, Permits, Etc.; Government Approvals. (i)
Holdings, the Company and each of the Company's Subsidiaries own, are licensed
or otherwise have the lawful right to use, or have all permits and other
governmental approvals, patents, trademarks, trade names, industrial designs,
copyrights, technology, know-how and processes used in or necessary for the
conduct of their businesses as currently conducted except where the failure to
do so would not have or be reasonably likely to have a Material Adverse Effect.
Except as set forth on Schedule 6.01-U, as of the Closing Date no claims are
pending or, to the best of Company's Knowledge following inquiry, threatened
that Holdings, the Company or any of its Subsidiaries is infringing in any
material respect upon the rights of any Person with respect to such permits and
other governmental approvals, patents, trademarks, trade names, industrial
designs, copyrights, tech nology, know-how and processes.
(ii) Except for Liens granted to the Agent for the benefit of the
Agent, the Issuing Banks and the Lenders, the transactions contemplated by the
Transaction Documents shall not impair the ownership of or rights under (or the
license or other right to use, as the case may be) any permits and governmental
approvals, patents, trademarks, trade names, industrial designs, copyrights,
technology, know-how or processes by Holdings, the Company or any of the
Company's Subsidiaries in any manner which shall have or is reasonably likely to
have a Material Adverse Effect.
(v) Assets and Properties. Each of Holdings, the Company and the
Company's Subsidiaries has good and marketable title to all of its material
assets and Property (tangible and intangible) owned by it or a valid leasehold
interest in all of its material leased assets (except for Liens permitted under
Section 9.03 and minor defects in title which do not interfere with their
ability to conduct their business as presently conducted insofar as
marketability may be limited by any laws or regulations of any Governmental
Authority affecting such assets), and all such assets and Property are free and
clear of all Liens, except Liens securing the Obligations and Liens permitted
under Section 9.03. As of the Closing Date Schedule 6.01-V contains a true and
complete list of (i) all of the Real Property owned in fee simple by each of
Holdings, the Company and the Company's Subsidiaries as of the Closing Date,
(ii) a true and complete list of all Leases in effect on the Closing Date the
annual rental payments under which exceed $250,000 and (iii) a true and complete
list of all warehouses in which there is, or is reasonably expected to be, (i)
for a period of 30 days or more during any twelve-month period, Inventory with a
fair market
-118-
value of $250,000 or more or (ii) at any time, Inventory with a fair market
value of $1,000,000 or more. Substantially all of the assets and Property owned
by or leased to Holdings, the Company and/or each such Subsidiary are in
adequate operating condition and repair, ordinary wear and tear excepted, and
are free and clear of any known defects except such defects that do not
substantially interfere in any material respect with the continued use thereof
in the conduct of normal operations. Except for Liens granted to the Agent for
the benefit of the Agent, the Issuing Banks and the Lenders, neither this
Agreement nor any other Transaction Document, nor any transaction contem plated
herein or therein, shall affect any right, title or interest of Holdings, the
Company or such Subsidiary in and to any of such assets in a manner that shall
have or is reasonably likely to have a Material Adverse Effect.
(w) Insurance. The Certificate of Insurance delivered to the Lenders
pursuant Section 5.01(a) accurately sets forth as of the Closing Date all
insurance policies currently in effect with respect to the respective assets and
business of the Company and its Subsidiaries, specifying for each such policy
and program, (i) the amount thereof, (ii) the general risks insured against
thereby, (iii) the name of the insurer and each insured party thereunder, (iv)
the policy or other identification number thereof and (v) the expiration date
thereof. Such insurance policies and programs are in amounts sufficient to cover
the replacement value of the respective assets of the Company and its
Subsidiaries.
(x) Pledge of Collateral. The grant and perfection of the security
interests in the Capital Stock of the Company and its Subsidiaries constituting
a portion of the Collateral for the benefit of the Agent, the Issuing Banks and
the Lenders, as contemplated by the terms of the Loan Documents, is not made in
violation of the registration provisions of the Securities Act, any applicable
provisions of other federal securities laws, state securities or "Blue Sky" law,
foreign securities law, or applicable general corporation law or in violation of
any other Requirement of Law.
(y) Transactions with Affiliates. Schedule 6.01-Y lists as of the
Closing Date each and every existing material agreement (other than the
Transaction Documents) as of the Closing Date and arrangement that any of
Holdings, the Company or the Company's Subsidiaries has entered into with any of
their respective Affiliates (other than Holdings, the Company's and the
Company's Subsidiaries).
(z) Transaction Documents. Solely with respect to the Transaction
Documents (other than the Loan Documents), as of the Closing Date the following
are true and correct and complete:
-119-
(i) All conditions precedent to, and all material consents and
Permits necessary to permit, the consummation of the transactions contemplated
by such Transaction Documents which will be entered into as of the or prior to
the Closing Date have been satisfied or delivered, or waived (to the extent
required under Section 9.16) with the prior written consent of the Requisite
Lenders, and no action has been taken, or to the best of Holdings and the
Company's Knowledge, shall be taken by any Governmental Authority which
restrains, prevents or imposes material adverse conditions upon, or seeks to
restrain, prevent or impose material adverse conditions upon, the consummation
of the transactions contemplated in such Transaction Documents.
(ii) Each of Holdings, the Company and the Company's Subsidiaries
has the requisite corporate power and authority to execute, deliver and perform
each of such Transaction Documents to which it is a party.
(iii) The execution, delivery and performance, as the case may be,
of each of such Transaction Documents which have been executed and to which any
of Holdings, the Company or any of the Company's Subsidiaries is a party and the
consummation of the transactions contemplated thereby, have been duly approved
by each of the boards of directors and (to the extent required by law) the
shareholders of Holdings, the Company and such Subsidiary, respectively, and
such approvals have not been rescinded, revoked or modified in any material
respect. No other corporate action or proceedings on the part of Holdings, the
Company or any of the Company's Subsidiaries is necessary to consummate such
transactions.
(iv) Each of such Transaction Documents to which Holdings, the
Company or any of the Company's Subsidiaries is a party has been duly executed,
or delivered on behalf of Holdings, the Company or such Subsidiary, as the case
may be, and constitutes its legal, valid and binding obligation, enforceable
against such Person in accordance with its terms (except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance and other laws affecting the enforcement of creditors' rights
generally and to the effect of general equitable principles (whether considered
in a proceeding in equity or at law)), is in full force and effect and, except
as permitted pursuant to Section 9.16, no term or condition thereof has been
amended, modified or waived from the terms and conditions contained in such
Transaction Documents delivered to the Agent pursuant to Section 5.01(a) without
the prior written consent of the Requisite Lenders. Each of Holdings, the
Company and the Company's Subsidiaries that is a party to such Transaction
Documents and, to the Knowledge of the Company, all other parties thereto, have
performed and complied in all material respects with all material terms,
provisions, agreements and conditions set forth therein and required to be
-120-
performed or complied with by such parties on or before the Closing Date, and as
of such date, no material default, event of default or breach of any covenant by
any such party exists thereunder.
(aa) Bank Accounts. Schedule 6.01-AA sets forth as of the Closing
Date all of (i) Holdings', the Company's and the Company's Subsidiaries'
Collection Account Banks and other banks where funds are from time to time
deposited, including the Lockboxes, the Collection Accounts and the Disbursement
Accounts their addresses and the relevant account numbers, and (ii) the Cash
Collateral Accounts, and the Company has disclosed all additions, subtractions
and modifications to such Schedule to the Agent and the Lenders as required by
Section 3.05.
ARTICLE VII
REPORTING COVENANTS
Each of Holdings and the Borrowers (other than the Canadian Borrower
which so covenants in favor of the Canadian Lenders only with respect to itself
and its consolidated liabilities, assets, business and opportunities) covenants
and agrees that so long as any Commitment is outstanding and thereafter until
Payment In Full of all of the Obligations, unless the Requisite Lenders shall
otherwise give prior written consent thereto:
7.01. Financial Statements. The Company and Holdings shall maintain,
and shall cause each of the Company's Subsidiaries to maintain, a system of
accounting established and administered in accordance with sound business
practices to permit preparation of consolidated and consolidating financial
statements in conformity with GAAP, and each of the financial statements
described below shall be prepared from such system and records. The Company or
Holdings, as the case may be, shall deliver or cause to be delivered to the
Agent and the Lenders:
(a) Monthly Reports. Within thirty (30) days after the end of each
fiscal month in each Fiscal Year, the consolidated and consolidating balance
sheets of Holdings and its Subsidiaries as at the end of such period and the
related consolidated and consolidating statements of income and cash flow of
Holdings and its Subsidiaries for such fiscal month and for the period from the
beginning of the then current Fiscal Year to the end of such fiscal month, and
for the corresponding period during the previous Fiscal Year, and a comparison
of the statement of the year to date earnings and cash flow to the corresponding
statement for the corresponding period from the previous Fiscal Year, and the
most recently prepared forecasted consolidated balance sheet and consolidated
statement of earnings and cash flow of Holdings and its Subsidiaries for and as
of the
-121-
end of such Fiscal Year, and a comparison of the statement of year to date
earnings and cash flow to the annual operating plan, certified by a Financial
Officer of the Company as fairly presenting the consolidated and consolidating
financial position of Holdings and its Subsidiaries as at the dates indicated
and the results of their operations and cash flow for the periods indicated in
accordance with GAAP, subject to normal year end adjustments.
(b) Annual Reports. Within ninety (90) days after the end of each
Fiscal Year, (i) audited financial statements of Holdings and its Subsidiaries
and (ii) annual consolidating financial statements of Holdings and its
Subsidiaries reported on by independent certified public accountants of
recognized national standing acceptable to the Requisite Lenders, which report
shall be unqualified (or, if qualified, only as to non-material matters) and
shall state that such financial statements fairly present the consolidated and
consolidating financial position of Holdings and its Subsidiaries as at the
dates indi cated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except for changes with which such independent certified public
accountants shall concur and which shall have been disclosed in the notes to the
financial statements) and that the examination by such accountants in connection
with such consolidating financial statements has been made in accordance with
generally accepted auditing standards.
(c) Officer's Certificate. Together with each delivery of any
financial statement pursuant to paragraph (a) and (b) of this Section 7.01, an
Officer's Certificate of the Company signed by a Financial Officer of the
Company setting forth calculations for the period then ended and which
demonstrate compliance, when applicable, with the provisions of Article X (the
"Compliance Certificate").
(d) Business Plans; Financial Projections. Not later than fifteen
(15) days prior to the end of each Fiscal Year, and containing substantially the
same types of financial information contained in the Initial Projections, (i)
the annual business plan of the Company for the next succeeding Fiscal Year and
(ii) forecasts prepared by management of the Company for each fiscal quarter in
the next Fiscal Year and for each succeeding Fiscal Year, up to and including
the Fiscal Year immediately following the Fiscal Year during which it is
anticipated that the Obligations shall be Paid In Full, containing a
consolidated balance sheet, an income statement and a consolidated statement of
cash flow.
(e) Accountant's Statement and Reliance Letter. Together with each
delivery of the financial statements referred to in Section 7.01(b), a written
statement of the firm of
-122-
independent certified public accountants of recognized national standing
acceptable to the Lenders giving the report stating (i) that their audit
examination has included a review of the terms hereof as it relates to
accounting matters and (ii) whether, in connection with their audit examination,
any condition or event which constitutes an Event of Default or Default has come
to their attention, and if such condition or event has come to their attention,
specifying the nature and period of existence thereof. The statement referred to
above shall be accompanied by (x) a copy of the management letter or any similar
report delivered to the Company or Holdings or to any officer or employee
thereof by such accountants in connection with such financial statements and (y)
a reliance letter in form and substance reasonably satisfactory to the Agents
from such accountants to the Company or Holdings. The Agent and each Lender may
communicate directly with such accountants.
(f) Opening Balance Sheet. Within ninety (90) days after the Closing
Date, the Closing Date Balance Sheet (as defined in the Acquisition Agreement).
7.02. Events of Default. Promptly upon (and, in any event, within
five (5) Business Days of) any Borrower or Holdings, as the case may be,
obtaining Knowledge (i) of any condition or event which constitutes an Event of
Default or Default, or becoming aware that any Lender, any Issuing Bank or the
Agent has given any written notice with respect to a claimed Event of Default or
Default, (ii) that any Person has given any written notice to Holdings, the
Company or any Subsidiary of the Company or taken any other action with respect
to a claimed default or event or condition of the type referred to in Section
11.01(e), (iii) of any condition or event which has or is reasonably likely to
materially and adversely affect the value of, or the Agent's interest in, the
Collateral, or (iv) of any condition or event which has or is reasonably likely
to have a Material Adverse Effect, the Company or Holdings, as the case may be,
shall deliver to the Agent and the Lenders an Officer's Certificate specifying
(A) the nature and period of existence of any such claimed default, Event of
Default, Default, condition or event, (B) the notice given or action taken by
such Person in connection therewith, and (C) the remedial action the Company or
Holdings, as the case may be, has taken, is taking and proposes to take with
respect thereto.
7.03. Lawsuits. Promptly upon (and, in any event, within ten (10)
Business Days of) the Company or Holdings, as the case may be, obtaining
Knowledge of the institution of, or written threat of, any action, suit,
proceeding, governmental investigation, any allegation of defective pricing, or
any arbitration against or affecting Holdings, the Company or any of the
Company's Subsidiaries or any Property of Holdings, the Company or any of the
Company's Subsidiaries not previously
-123-
disclosed pursuant to Section 6.01(i), which action, suit, proceeding,
governmental investigation or arbitration exposes, or in the case of multiple
actions, suits, proceedings, governmental investigations or arbitrations arising
out of the same general allegations or circumstances which expose, in Holdings'
or the Company's reasonable judgment, Holdings, the Company or any of the
Company's Subsidiaries to liability in an amount aggregating $1,000,000 or more,
or which could otherwise reasonably be expected to result in a Material Adverse
Effect, Holdings or the Company, as the case may be, shall give written notice
thereof to the Agent and the Lenders and provide such other information as may
be reasonably available to enable each Lender and the Agent and its counsel to
evaluate such matters.
7.04. Insurance. As soon as practicable and in any event within
ninety (90) days after the Closing Date and ninety (90) days after the end of
each Fiscal Year ending after the Closing Date, the Company shall deliver to the
Agent (i) a report in form and substance satisfactory to the Agent and the
Lenders outlining all material insurance coverage (including any self-insurance
provided by Holdings and/or the Company but excluding health, medical, dental
and life insurance (other than key man life insurance)) maintained as of the
date of such report by Holdings, the Company and the Company's Subsidiaries and
the duration of such coverage and (ii) to the extent such insurance coverage is
not provided by Holdings and/or the Company, an insurance broker's statement
that all premiums then due and payable with respect to such coverage have been
paid (except as otherwise agreed to by the Agent).
7.05. Borrowing Base Certificate. Promptly and in any event (a)
within five (5) days (or up to an additional five (5) days with the consent of
the Agent) after the close of each fiscal week (or more or less frequently as
may be requested by the Agent), the Company shall provide the Agent (which the
Agent will promptly deliver to each Lender) with a Borrowing Base Certificate,
together with such supporting documents as the Agent requests (including weekly
updated information concerning Receivables of the Borrowers) and (b) within
fifteen (15) days of (or up to an additional five (5) days with the consent of
the Agent) after the close of each fiscal month (or more or less frequently as
may be requested by the Agent), monthly Inventory reports of the Borrowers as of
the last day of the preceding month, all certified as being true, accurate and
complete by a Financial Officer of the Company.
7.06. ERISA Notices. The Company shall deliver or cause to be
delivered to the Agent, at the Company's expense, the following information and
notices as soon as reasonably possible, and in any event:
(i) within ten (10) Business Days after the
-124-
Company or any ERISA Affiliate Knows or reasonably should Know that
a Termination Event has occurred, a written statement of a Financial
Officer of the Company describing such Termination Event and the
action, if any, which the Company or any ERISA Affiliate has taken,
is taking or proposes to take with respect thereto, and when Known,
any action taken or threatened by the IRS, DOL or PBGC with respect
thereto;
(ii) within ten (10) Business Days after the Company or any
ERISA Affiliate Knows or reasonably should Know that a prohibited
transaction (defined in Sections 406 of ERISA and 4975 of the
Internal Revenue Code) has occurred that would have a material
adverse effect (financial or otherwise) on the Company or any ERISA
Affiliate for which a statutory or class exemption is not available
or a private exemption has not been previously obtained from the
DOL, a statement of a Financial Officer of the Company describing
such transaction and the action which the Company or any ERISA
Affiliate has taken, is taking or proposes to take with respect
thereto;
(iii) within ten (10) Business Days after receipt by the
Company of written request therefor from the Agent, copies of each
annual report (form 5500 series), including Schedule B thereto,
filed with respect to each Benefit Plan;
(iv) within ten (10) Business Days after receipt by the
Company of written request therefor from the Agent, copies of each
actuarial report for any Benefit Plan or Multiemployer Plan and each
annual report for any Multiemployer Plan;
(v) within ten (10) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with
respect to any Benefit Plan and, if requested by the Agent, all
communications received by the Company or any ERISA Affiliate with
respect to such request;
(vi) within ten (10) Business Days upon the occurrence
thereof, notification of any material increase in the benefits of
any existing Benefit Plan or the establishment of any new Benefit
Plan or the commencement of contributions to any Benefit Plan to
which the Company or any ERISA Affiliate was not previously
contributing;
(vii) within ten (10) Business Days after receipt by the
Company or any ERISA Affiliate of the PBGC's
-125-
intention to terminate a Benefit Plan or to have a trustee appointed
to administer a Benefit Plan, copies of each such notice;
(viii) within ten (10) Business Days after receipt by the
Company or any ERISA Affiliate of any unfavorable determination
letter from the IRS regarding the qualification of a Plan under
Section 401(a) of the Internal Revenue Code, copies of each such
letter; provided, that if Company or any ERISA Affiliate has reason
to believe that the IRS erroneously sent such letter, then a copy of
such letter need not be delivered to the Agent if the IRS shall
confirm in writing within such 10-day period that such letter is
withdrawn, invalid or otherwise should be disregarded;
(ix) within ten (10) Business Days after receipt by the
Company or any ERISA Affiliate of a notice from a Multiemployer Plan
regarding the imposition of withdrawal liability, copies of each
such notice;
(x) within ten (10) Business Days after the Company or any
ERISA Affiliate fails to make a required installment or any other
required payment that would give rise to a Lien under Section 412 of
the Internal Revenue Code on or before the due date for such
installment or payment, a notification of such failure;
(xi) within ten (10) Business Days after the Company or any
ERISA Affiliate Knows or reasonably should Know (a) a Multiemployer
Plan has been terminated, (b) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan, or (c)
the PBGC has instituted or will institute proceedings under Section
4042 of ERISA to terminate a Multiemployer Plan; and
(xii) within ten (10) Business Days after receipt by the
Company of a written notice from the Agent, copies of any Foreign
Employee Benefit Plan and related documents, reports and
correspondence as requested by the Agent in such notice.
For purposes of this Section 7.06, the Company and any ERISA Affiliate shall be
deemed to Know all facts Known by the administrator of any Plan of which the
Company or any ERISA Affiliate is the plan sponsor.
7.07. Environmental Notices. (a) The Company shall notify the Agent
and the Lenders in writing, promptly and in any event within 10 Business Days
upon the Company's learning thereof, of any:
-126-
(i) notice or claim by a Governmental Authority or any third party
to the effect that Holdings, the Company or any of the Company's
Subsidiaries is or may be liable to any Person, or is subject to an
investigation by a Governmental Authority, relating to a material Release
or threatened Release of any Contaminant into the environment, or any
materially unsafe or unhealthy condition at any Property of Holdings, the
Company or any of the Company's Subsidiaries;
(ii) notice that any Property of Holdings, the Company or any of the
Company's Subsidiaries is subject to an Environmental Lien;
(iii) commencement or threat of any judicial or administrative
proceeding alleging a material violation by Holdings, the Company or any
of the Company's Subsidiaries of any Environmental, Health or Safety
Requirement of Law;
(iv) new and material changes to any existing Environmental, Health
or Safety Requirement of Law that would or could reasonably be expected to
have a Material Adverse Effect; or
(v) any intent to execute an agreement, letter of intent or
commitment to acquire stock, assets or real estate, or to lease property,
or to take any other action by Holdings, the Company or any of the
Company's Subsidiaries that would subject Holdings, the Company or any of
the Company's Subsidiaries to environmental, health or safety Liabilities
and Costs that would or could reasonably be expected to have a Material
Adverse Effect.
(b) The Company shall notify the Agent and the Lenders in writing,
promptly and in any event within ten (10) Business Days upon any filing or
report made by Holdings, the Company or any of the Company's Subsidiaries with
any Governmental Authority with respect to (i) the violation of any
Environmental, Health or Safety Requirement of Law, (ii) any unpermitted Release
or threatened Release of a Contaminant that is reportable under 40 C.F.R. 302 or
(iii) any unsafe or unhealthful condition at any Property of Holdings, the
Company or any of the Company's Subsidiaries that would or could reasonably be
expected to have a Material Adverse Effect.
7.08. Labor Matters. The Company shall notify the Agent and the
Lenders in writing, promptly after the Company has Knowledge thereof, of (i) any
material labor dispute to which Holdings, the Company or any of the Company's
Subsidiaries is or may become a party, including, without limitation, any
strikes, lockouts or other disputes relating to such Persons' plants and other
facilities and (ii) any material liability (arising
-127-
pursuant to the Worker Adjustment and Retraining Notification Act or otherwise)
incurred with respect to the closing of any plant or other facility of such
Persons.
7.09. Public Filings and Reports. Promptly upon the filing thereof
with the Securities and Exchange Commission, the Company shall deliver to the
Agent and the Lenders copies of all filings or reports made in connection with
outstanding Indebtedness and Capital Stock of Holdings or the Company.
7.10. Notices under Acquisition Agreement. Promptly upon receipt
thereof, Holdings shall cause a copy of every written notice or communication
received by Holdings pursuant to the Acquisition Agreement to be promptly
delivered to the Agent.
7.11. Other Information. Promptly upon receipt of a request therefor
from the Agent, the Company shall prepare and deliver to the Agent and the
Lenders such other information with respect to Holdings, the Company, any of the
Company's Subsidiaries or the Collateral including, without limitation,
schedules identifying and describing the Collateral and any dispositions thereof
and copies of each existing written agreement or arrangement set forth on
Schedule 6.01-Y, as from time to time may be reasonably requested by the Agent.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Each of Holdings and the Borrowers (other than the Canadian Borrower
which so covenants in favor of the Canadian Lenders only with respect to itself
and its consolidated liabilities, assets, business and opportunities) covenants
and agrees that so long as any Commitment is outstanding and there after until
Payment In Full of all of the Obligations, unless the Requisite Lenders shall
otherwise give prior written consent:
8.01. Corporate Existence, Etc. Each of Holdings and the Company
shall, and shall cause each of the Company's Subsidiaries to, at all times
maintain its respective corporate existence and preserve and keep, or cause to
be preserved and kept, in full force and effect their respective rights and
franchises material to their respective businesses except where the failure to
so maintain or preserve would not have or be reasonably likely to have a
Material Adverse Effect.
8.02. Corporate Powers; Conduct of Business, Etc. Each of Holdings
and the Company shall, and shall cause each of the Company's Subsidiaries to,
qualify and remain qualified to do business in each jurisdiction in which the
nature of its business requires it to be so qualified, except where the failure
to be so qualified would not have or be reasonably likely to have a
-128-
Material Adverse Effect.
8.03. Compliance with Laws, Etc. Each of Holdings and the Company
shall, and shall cause each of the Company's Subsidiaries to, (a) comply with
all Requirements of Law and all restrictive covenants affecting such Person or
the business, Property or operations of such Person, and (b) obtain as needed
all Permits necessary for such Person's operations and maintain such Permits in
good standing, except, in each case, where the failure to do so would not have
or be reasonably likely to have a Material Adverse Effect.
8.04. Payment of Taxes and Claims; Tax Consolidation. Each of
Holdings and the Company shall, and shall cause each of the Company's
Subsidiaries to, pay (a) all taxes, assessments and other governmental charges
imposed upon it or on any of its Property or in respect of any of its
franchises, business, income or Property before any penalty or interest for late
payment (except as such penalty or interest relates to underpayment of estimated
tax payments) accrues thereon, and (b) all material claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien (other
than a Lien permitted by Section 9.03) upon any of Holdings', the Company's or
such Subsidiary's Property (other than Property with a fair market value of less
than $100,000), prior to the time when any penalty or fine shall be incurred
with respect thereto. Notwithstanding the preceding sentence, any Borrower shall
have the right to contest in good faith the validity or amount of any such taxes
or claims by proper proceedings timely instituted, and may permit the taxes or
claims to be contested to remain unpaid during the period of such contest if (i)
it diligently prosecutes such contest, (ii) it makes adequate provision in
conformity with GAAP with respect to the contested items, and (iii) during the
period of such contest, the enforcement and ability of any taxing authority to
force payment of any contested item or to impose a Lien with respect thereto is
effectively stayed. The Borrower shall promptly pay or cause to be paid any
valid judgment enforcing any such taxes and cause the same to be satisfied of
record.
8.05. Insurance. The Company shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain, in full force
and effect the insurance policies and programs listed in the most recent report
delivered to the Agent pursuant to Section 7.04 or substantially similar
policies and programs or other policies and programs as are reasonably
acceptable to the Agent. Each certificate and policy relating to Collateral
damage and/or business interruption coverage shall contain an endorsement, in
form and substance acceptable to the Agent, showing loss payable to the Agent,
and naming the Agent as an additional insured under such policy and
-129-
providing that no act, whether willful or negligent, or default of the Company,
any of the Company's Subsidiaries or any other Person shall affect the right of
the Agent to recover under such policy or policies of insurance in case of loss
or damage. Each certificate and policy relating to general liability, umbrella
and excess insurance coverages other than the foregoing shall contain an
endorsement naming the Agent as an additional insured under such policy. Such
endorsement or an independent instrument furnished to the Agent shall provide
that the insurance companies shall give the Agent at least thirty (30) days'
written notice before any such policy or policies of insurance shall be
cancelled or altered materially adversely to the interests of the Agent, the
Issuing Banks and the Lenders. In the event that the Company or any of its
Subsidiaries, at any time or times hereafter, shall fail to obtain or maintain
any of the policies or insurance required herein or to pay any premium in whole
or in part relating thereto, then the Agent, without waiving or releasing any
obligations or resulting Event of Default hereunder, may at any time or times
after the occurrence of an Event of Default (but shall be under no obligation to
do so) obtain and maintain such policies of insurance and pay such premiums and
take any other action with respect thereto which the Agent deems advisable. The
Agent agrees to give the Company reasonable notice of any such payments made by
it, but the Agent's failure to do so shall not limit its rights under this
section. All sums so disbursed by the Agent shall constitute Protective Advances
and be part of the Obligations, payable as provided herein.
8.06. Inspection of Property; Books and Records; Discussions. (a)
Holdings and the Company shall permit, and shall cause each of the Company's
Subsidiaries to permit, any authorized representative(s) designated by the Agent
to visit and inspect any of the Properties of such Person or such Subsidiary, to
examine, audit, check and make copies of their respective financial and
accounting records, books, journals, orders, receipts and any correspondence and
other data relating to their respective businesses or the transactions
contemplated hereby and by the Transaction Documents (including, in connection
with environmental compliance, hazard or liability), and to discuss their
affairs, finances and accounts with their officers and independent certified
public accountants, in each case upon reasonable notice and at such times during
normal business hours, as often as may be reasonably requested. All costs and
expenses reasonably incurred by the Agent as a result of such inspection, audit
or examination conducted pursuant to this Section 8.06 shall be paid by the
Company. It is presently anticipated that four (4) such inspections and audits
will take place in each Fiscal Year, provided that this sentence shall in no way
limit the right of the Agent to conduct greater or fewer inspections during such
time period.
-130-
(b) Holdings and the Company shall keep and maintain, and shall
cause its respective Subsidiaries to keep and maintain, in all material respects
proper books of record and account in which entries consistent with past
practices or otherwise in conformity with GAAP shall be made of all dealings and
transactions in relation to their respective businesses and activities,
including, without limitation, transactions and other dealings with respect to
the Collateral. If an Event of Default has occurred and is continuing, the
Company, upon the Agent's request, shall promptly turn over true, correct and
complete copies of all such records to the Agent or any of its representatives.
8.07. [Intentionally omitted]
8.08. ERISA Compliance. Holdings and the Company shall, and shall
cause each of the Company's Subsidiaries and each of the ERISA Affiliates to,
establish, maintain and operate all Plans to comply in all material respects
with the provisions of ERISA, the Internal Revenue Code, all other applicable
laws, and the regulations and interpretations thereunder and the respective
requirements of the governing documents for such Plans. Unless otherwise
consented to by the Requisite Lenders, the Company shall exercise its discretion
under Section 11.3 of the ESOP to require that the payment for company stock
purchased upon the exercise of a put option be made with a Common Equity Note
commencing within the 30-day period immediately following the date of exercise
of the put option.
8.09. Foreign Employee Benefit Plan Compliance. Holdings and the
Company shall, and shall cause each of the Company's Subsidiaries and each of
the ERISA Affiliates to establish, maintain and operate all Foreign Employee
Benefit Plans to comply in all material respects with all laws, regulations and
rules applicable thereto and the respective requirements of the governing
documents for such Plans.
8.10. Maintenance of Property. The Company shall, and shall cause
each of its Subsidiaries to, cause all material Property used or useful in the
conduct of its business to be maintained and kept in good condition, repair and
working order, ordinary wear and tear excepted, and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any such Property if (i) such Property is permitted
to be disposed of under Section 9.02 or (ii) such discontinuance is, in the
judgment of the Company, necessary or appropriate in the conduct of its business
or the business of any of its Subsidiaries and not disadvantageous to the Agent,
the Issuing Banks or the
-131-
Lenders.
8.11. Further Assurances; Additional Collateral.
(a) Each of Holdings and the Borrowers shall execute and deliver,
and cause its Subsidiaries to execute and deliver, within the time periods set
forth with respect to such items on the Closing List, all agreements, documents
and instruments designated as "post-closing items" on the Closing List.
(b) In addition to and not in lieu of the rights and obligations of
the parties under clause (a) above, (i) at any time and from time to time,
promptly following the Agent's written request and at the expense of the
applicable Person, each of Holdings and the Borrowers agrees to duly execute and
deliver, and to cause its Subsidiaries to duly execute and deliver, any and all
such further instruments and documents and take such further action as the Agent
may reasonably deem desirable in order to perfect and protect any Lien granted
or purported to be granted pursuant to the Loan Documents or to enable the
Agent, in accordance with the terms of the applicable Loan Documents, to
exercise and enforce its rights and remedies under the Loan Documents with
respect to such Collateral and (ii) in the event that the average aggregate
Revolving Credit Availability under all Credit Facilities during any thirty day
period is less than $10,000,000, each Borrower agrees to grant, and cause any of
its Subsidiaries to grant, to the Agent or the Canadian Agent, as applicable, a
security interest in any additional property which, as of the Closing Date, does
not constitute Collateral. Notwithstanding the foregoing, the granting of such
further assurances or security interest under this Section 8.11(b) shall not be
required if it would (w) be prohibited by other Contractual Obligations to which
such Borrower or such Subsidiary is a party, (x) be prohibited by applicable
law, (y) attach to assets constituting the "Term Loan Lenders Collateral" under
(and as defined in) the Intercreditor Agreement or (z) result in material
adverse tax consequences to the Domestic Borrowers, taken as a whole, or the
Canadian Borrower, individually. The obligation to provide such further
assurances or additional security interests may be avoided with respect to any
Borrower or Subsidiary if the assets with respect to which the related security
arrangements are proposed to be altered are excluded from the Domestic Borrowing
Base or the Canadian Borrowing Base, as applicable. In the event that the
Company notifies the Agent that the granting of such further assurances or
additional security interests requested by the Agent would be reasonably likely
to cause material adverse tax consequences, the Agent shall use its best efforts
to work with the Company to, and will consider such structures prepared by the
Company which would, avoid or minimize such adverse tax consequences.
8.12. Landlord and Bailee Waivers. On or prior to the
-132-
Closing Date, the Company shall obtain and deliver to the Agent Collateral
Access Agreements relating to each warehouse location listed on Schedule 6.01-V
(with such exceptions thereto as agreed to by the Agent). The Company shall use
its best efforts to obtain and deliver to the Agent Collateral Access Agreements
(w) relating to the Lease which is located at the Company's headquarters in
Norwalk, Connecticut, (x) with respect to any Lease entered into after the
Closing Date which relates to a location in which there is, or is reasonably
expected to be, Inventory with a fair market value of $250,000 or more and (y)
with respect to any warehouse location listed on Schedule 6.01-V that was not
obtained on or prior to the Closing Date and any other warehouse location
obtained after the Closing Date in which there is, or is reasonably expected to
be, (i) for a period of 30 days or more during any twelve-month period,
Inventory with a fair market value of $250,000 or more or (ii) at any time,
Inventory with a fair market value of $1,000,000 or more.
8.13. Environmental Compliance. (a) Holdings, the Company and the
Company's Subsidiaries shall comply with all Environmental, Health or Safety
Requirements of Law, noncompliance with which reasonably could be expected to
have a Material Adverse Effect.
(b) Holdings, the Company and each of the Company's Subsidiaries
shall obtain as needed all Permits necessary for their operations, and shall
maintain such Permits in good standing, where the failure to obtain and maintain
such Permits is reasonable likely to have a Material Adverse Effect.
8.14. Interest Rate Contracts. (i) On or before March 15, 1996, the
Company shall obtain, and shall thereafter cause to be maintained for a period
of not less than two years, one or more Interest Rate Contracts with respect to
the Loans, covering an aggregate notional amount of not less than $50,000,000
and otherwise on terms reasonably acceptable to the Agent and, in the event such
Interest Rate Contract constitutes Indebtedness of the Company, shall be
purchased from a financial institution reasonably acceptable as a credit matter
to the Agent. Upon the request of the Agent, the Company shall take all steps
necessary to arrange that payments owing to the Company or any of its
Subsidiaries from any counterparty under any Interest Rate Contract shall be
paid directly to the Agent for application to the Obligations.
(ii) The Company agrees to take all such other action with respect
to each such Interest Rate Contract as the Agent may reasonably request in order
to perfect its Lien therein, including, without limitation, executing a
collateral assignment of such Interest Rate Contract in a form and substance
reasonably satisfactory to the Agent.
-133-
ARTICLE IX
NEGATIVE COVENANTS
Each of Holdings and the Borrowers (other than the Canadian Borrower
which so covenants in favor of the Canadian Lenders only with respect to itself
and its consolidated liabilities, assets, business and opportunities) covenants
and agrees that it shall comply with the following covenants so long as any
Commitment is outstanding and thereafter until Payment In Full of all of the
Obligations, unless (except as otherwise provided below) the Requisite Lenders
shall otherwise give prior written consent thereto:
9.01. Indebtedness. None of Holdings, the Company or any of the
Company's Subsidiaries shall directly or indirectly create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(i) the Obligations;
(ii) the Finova Indebtedness; provided that the outstanding
principal amount of the Finova Indebtedness shall at no time exceed
$8,000,000;
(iii) Permitted Existing Indebtedness and any extensions, renewals,
refundings or replacements of such Indebtedness, provided that any such
extension, renewal, refunding or replacement is in an aggregate principal
amount not greater than the principal amount of, and, taken as a whole is
on terms no less favorable to such Borrower or such Subsidiary than the
terms of, such Indebtedness so extended, renewed, refunded or replaced;
(iv) Indebtedness in respect of taxes, assess ments, governmental
charges and claims for labor, materials or supplies, to the extent that
payment thereof is not required pursuant to Section 8.04;
(v) Indebtedness constituting Accommodation Obligations permitted by
Section 9.05;
(vi) Indebtedness under appeal bonds in connection with judgments
which do not result in an Event of Default or Default or any other breach
hereunder;
(vii) to the extent permitted by Article X and in any event in an
aggregate amount not to exceed $3,000,000 at any time, Capital Leases and
purchase money Indebtedness incurred by the Borrowers to finance the
acquisition of fixed assets, and Indebtedness incurred by the Borrowers to
refinance such Capital Leases and purchase money
-134-
Indebtedness;
(viii) Indebtedness incurred pursuant to the Permitted Receivables
Transaction Documents;
(ix) Permitted Subordinated Indebtedness;
(x) Indebtedness arising from intercompany loans (A) from any
Borrower to any other Borrower; provided that such loans shall be
evidenced by promissory notes substantially in the form of Exhibit U and
shall be pledged to the Agent or the Canadian Agent, as applicable, as
additional Collateral, (B) from any Subsidiary of the Company (other than
Borrowers) to a Borrower, (C) from Holdings to any Borrower, (D) from any
Borrower to any Subsidiary of the Company (other than Borrowers) in a
principal amount, together with any Investments made after the Closing
Date in such Subsidiaries and Finsub and other Subsidiaries permitted to
be created or capitalized after the Closing Date under Section 9.07(b), in
any Fiscal Year not to exceed the Subsidiary Investment Basket for such
Fiscal Year and (E) in addition to any loans made to such Person under
clause (D) above, from Pegasus to Pegasus Asia in an amount at any time
outstanding not to exceed the sum of (1) $2,000,000, plus (2) the amount
of dividends received by Pegasus from Pegasus Asia after the Closing Date;
provided, that no loans permitted by clauses (D) or (E) shall be made if
an Event of Default or Default has occurred and is continuing;
(xi) Indebtedness arising pursuant to Interest Rate Contracts
entered into pursuant to Section 8.14 and other Interest Rate Contracts
reasonably acceptable to the Agent having aggregate Interest Rate Contract
Exposure for all Borrowers in an amount not to exceed an amount equal to
(x) $5,000,000 minus (y) the aggregate Currency Agreement Exposure for all
Borrowers at such time;
(xii) Indebtedness arising pursuant to Currency Agreements entered
into in the ordinary course of business or otherwise reasonably acceptable
to the Agent having aggregate Currency Agreement Exposure for all
Borrowers in an amount not to exceed an amount equal to (x) $5,000,000
minus (y) the aggregate Interest Rate Contract Exposure for all Borrowers
at such time; and
(xiii) Indebtedness of Holdings in respect of the Common Equity
Notes.
9.02. Sales of Assets. None of Holdings, the Company or any of the
Company's Subsidiaries shall sell, assign, transfer, lease, convey or otherwise
dispose of any Property,
-135-
whether now owned or hereafter acquired, or any income or profits therefrom, or
enter into any agreement to do so, except:
(i) the sale of Property (other than General Intangibles) in the
ordinary course of business (including sales of such Property between the
Borrowers and their Subsidiaries);
(ii) the sale of Receivables pursuant to the Permitted Receivables
Transaction Documents;
(iii) sales of assets outside of the ordinary course of business not
in excess of $1,000,000 in any Fiscal Year; provided, however, (A) sales
of Collateral permitted pursuant to this clause shall be for cash or on
customary payment terms and (B) sales of other assets permitted pursuant
to this clause may be for cash, on customary payment terms or for
promissory notes, provided, that all cash shall be applied to the
Obligations (in accordance with Section 3.01(b)) of the Borrower whose
Collateral is being sold and all promissory notes shall be pledged to the
Agent or the Canadian Agent, as applicable, as additional Collateral;
(iv) sales of Receivables in the ordinary course of business made
(A) between Borrowers or (B) from Subsidiaries of the Company to a
Borrower, provided, that all actions under the Uniform Commercial Code and
other applicable Requirements of Law required to perfect the purchaser's
interest in such Receivables shall have been taken;
(v) assignments and licenses of intellectual property of the Company
in the ordinary course of business;
(vi) subleases of leases or leases of owned Real Property, to the
extent such leases and subleases have anticipated annual rentals of less
than $1,000,000 each;
(vii) sales of Receivables backed by foreign letters of credit of
not more than $3,500,000 in any Fiscal Year (or such larger amount as the
Agent may approve in its sole discretion);
(viii) sales of Capital Stock of Subsidiaries of the Company
permitted by Section 9.13; and
(ix) additional dispositions which may be approved by the Agent in
its sole discretion and which result in Net Cash Proceeds of not more than
$2,500,000 in the aggregate; and
-136-
9.03. Liens. None of Holdings, the Company or any of the Company's
Subsidiaries shall directly or indirectly create, incur, assume or permit to
exist any Lien on or with respect to any of their respective Property or assets
except:
(i) Liens created by the Loan Documents and the Finova Documents;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens;
(iv) purchase money Liens granted by a Borrower (including the
interest of a lessor under a Capital Lease) and Liens to which any
Property is subject at the time of the Company's acquisition thereof)
securing Indebtedness permitted under Sections 9.01(vii) and limited in
each case to the property purchased or subject to such lease;
(v) any attachment or judgment Lien the existence of which does not
constitute an Event of Default under Section 11.01(h);
(vi) Liens filed to perfect the transfers of Receivables pursuant to
the Permitted Receivables Transaction Documents or otherwise to evidence
the transactions contemplated thereunder;
(vii) to the extent Indebtedness secured thereby is permitted to be
extended, renewed, replaced or refinanced pursuant to Section 9.01(ii), a
future Lien upon any Property which is subject to a Lien described in
clauses (ii) or (iv) above, if such future Lien attaches only to the same
Property, secures only such permitted extensions, renewals, replacements
or refinancings and is of like quality, character and extent; and
(viii) certain statutory and contractual rights of retention on the
Inventory of the Company or any of its Subsidiaries located outside of the
United States and Canada.
9.04. Investments. None of Holdings, the Company or any of the
Company's Subsidiaries shall directly or indirectly make or own any Investment
except:
(i) Investments in cash and Cash Equivalents (including, without
limitation, Cash Collateral) (A) pledged to the Agent or deposited in the
Lockboxes, the Collection Accounts and the Cash Collateral Accounts in
accordance with the provisions of this Agreement and the other Loan
-137-
Documents and (B) on deposit in the Disbursement Accounts or other
operating or payroll accounts of the Borrower; provided that the aggregate
amount in such disbursement or other accounts on an overnight basis shall
not exceed at any time $1,500,000;
(ii) Permitted Existing Investments in an amount not greater than
the amount thereof on the Closing Date;
(iii) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising
in the ordinary course of business;
(iv) Investments by Holdings and the Borrowers on the Closing Date
in the Capital Stock of their Subsidiaries and additional Investments made
after the Closing Date in such Subsidiaries and Finsub and other
Subsidiaries permitted to be created or acquired after the Closing Date
under Section 9.07;
(v) Investments in loans to employees made in the ordinary course of
business (but excluding any such loans the proceeds of which are intended
to be used to purchase Capital Stock); and
(vi) Investments constituting Indebtedness permitted by Section
9.01, Accommodation Obligations permitted by Section 9.05 or Capital
Expenditures permitted by Section 10.03.
9.05. Accommodation Obligations. None of Holdings, the Company or
any of the Company's Subsidiaries shall directly or indirectly create or become
or be liable with respect to any Accommodation Obligation, except:
(i) Permitted Existing Accommodation Obligations;
(ii) Accommodation Obligations arising under the Loan Documents;
(iii) obligations, warranties and indemnities which have been or are
undertaken or made in the ordinary course of business, in connection with
the Transaction Documents or in connection with any sale of assets
permitted under Section 9.02;
(iv) (A) Accommodation Obligations of any Subsidiary of Holdings in
respect of obligations of a Borrower or a Subsidiary Guarantor and (B)
Accommodation Obligations of any Subsidiary of Holdings in respect of
obligations of any other Subsidiary of Holdings (other than the Borrowers
or
-138-
the Subsidiary Guarantors) but only if the aggregate amount of such
Accommodation Obligations does not exceed $17,500,000 at any time
outstanding; and
(v) Accommodation Obligations of the Company and Finsub pursuant to
the Permitted Receivables Transaction Documents; and
(vi) Accommodation Obligations in respect of Indebtedness permitted
under Section 9.01 or constituting a Lien permitted under Section 9.03 or
an Investment permitted under Section 9.04.
9.06. Restricted Junior Payments. None of Holdings, the Company or
any of the Company's Subsidiaries shall declare or make any Restricted Junior
Payment, except:
(i) regularly scheduled cash dividends by Holdings on the Preferred
Stock in an aggregate amount not to exceed $1,200,000 in any Fiscal Year;
provided that in the event such dividends actually paid in any Fiscal Year
are less than the maximum permitted to be paid during such Fiscal Year,
the unpaid amount for such Fiscal Year may be carried over to the next
succeeding Fiscal Year;
(ii) regularly scheduled payments of principal and interest by
Holdings on the Indebtedness evidenced by the Common Equity Notes issued
to the holders of Common Stock either (A) pursuant to the Shareholders'
Agreement or (B) pursuant to the ESOP;
(iii) cash dividends on the Capital Stock of the Company to Holdings
paid and declared on or prior to the Closing Date to fund the transactions
contemplated by the Acquisition Documents;
(iv) cash dividends on the Capital Stock of the Company to Holdings
paid and declared in any Fiscal Year (A) to fund the payment of taxes and
ordinary operating expenses of Holdings, (B) to fund the payment of
Transaction Costs of Holdings not in excess of $6,000,000 in the aggregate
and (C) to fund payments permitted to be made by Holdings pursuant to
clauses (i), (ii) and (vii) of this Section 9.06;
(v) cash dividends paid solely to a Borrower by any of such
Borrower's Subsidiaries;
(vi) regularly scheduled payments of interest and principal on the
Permitted Subordinated Indebtedness but only to the extent permitted to be
paid pursuant to the
-139-
terms of such Permitted Subordinated Indebtedness; and
(vii) after the first anniversary of the Closing Date, payments made
by Holdings in respect of (A) redemptions of the Preferred Stock, (B)
repurchases of the Nonvoting Common Stock (but only to the extent such
Nonvoting Common Stock is subject to a put or call pursuant to the
Nonvoting Common Stock Purchase Agreement), (C) repurchases of other
Capital Stock of Holdings put to (or, in the case of Capital Stock subject
to the Shareholders' Agreement and held by former employees of Holdings,
the Borrowers or any Subsidiary Guarantor, called by) Holdings pursuant to
the terms of the Shareholders' Agreement or the ESOP and principal
prepayments of any Common Equity Notes;
provided, however, that the Restricted Junior Payments described in clauses (i),
(ii)(A), (iv) and (vii) above shall not be permitted if either (A) a Default or
an Event of Default shall have occurred and be continuing at the date of
declaration or payment thereof or would result therefrom or (B) such Restricted
Junior Payment is prohibited under the terms of any Indebtedness or Capital
Stock of Holdings, the Company or any of the Company's Subsidiaries; and
provided, further, that cash redemptions permitted under clause (vii) above
shall be limited to the excess, if any, of the average aggregate Revolving
Credit Availability under all Credit Facilities (plus, after the inception of
the Permitted Receivables Financing Program, the average liquidity available to
the Borrowers under the Permitted Receivables Financing Program) during the
thirty days immediately preceding the date set for such payment over
$15,000,000.
9.07. Conduct of Business; Subsidiaries; Acquisitions.
(a) Neither the Company nor any of its Subsidiaries shall engage in
any business other than the businesses engaged in by the Company on the date
hereof and any business or activities which are substantially similar, related
or incidental thereto. Holdings shall engage in no business or activity other
than acting as the parent of the Company and owning all of the issued and
outstanding shares of the common stock of the Company and activities reasonably
related thereto or as otherwise permitted by the Loan Documents. The
Subsidiaries of the Company (other than Borrowers) conducting business in Europe
shall not engage in any business or activity other than acting as the agent for
Pegasus pursuant to the terms of an agency agreement between Pegasus and such
Subsidiary, in form and substance reasonably satisfactory to the Agent which
agreement shall have been collaterally assigned to the Agent pursuant to an
assignment agreement substantially in the form of Exhibit V.
(b) Neither Holdings nor the Company shall create, capitalize or
acquire any Subsidiary after the date hereof;
-140-
provided, however, the Company may capitalize Finsub in accordance with the
Permitted Receivables Transaction Documents and may capitalize the Subsidiaries
proposed to be created on Schedule 6.01-C for the purposes set forth on such
schedule in an aggregate amount during any Fiscal Year, together with the
initial principal amount of all intercompany loans permitted to be made in such
Fiscal Year pursuant to Section 9.01(x), not to exceed the amounts permitted by
Sections 9.01(x)(D) and 9.01(x)(E) for such Fiscal Year.
(c) No Borrower shall enter into any transaction or series of
transactions (other than the transactions contemplated in the Acquisition
Documents) in which it acquires all or any significant portion of the Capital
Stock or assets of another Person; provided, however, with the consent of the
Agent and so long as no Event of Default has occurred and is continuing, the
Borrowers may acquire the assets or Capital Stock of Persons having a fair
market value (as determined by the Company's board of directors), net of any
liabilities assumed by such Borrower in such acquisition (determined in
accordance with GAAP) in the aggregate for all such acquisitions after the
Closing Date of not greater than $2,000,000.
9.08. Transactions with Shareholders and Affiliates. Except for the
consummation of the transactions contemplated in the Transaction Documents, none
of Holdings, the Company or any of the Company's Subsidiaries shall directly or
indirectly enter into or permit to exist any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of Holdings or the Company which is
not its Subsidiary, on terms that are less favorable to Holdings, the Company or
any such Subsidiary, as applicable, than those that could be obtained in an
arm's length transaction at the time from Persons who are not such a holder or
Affiliate other than transactions with such Affiliates who are officers,
directors or members of the leadership committee of Holdings, the Company or a
Subsidiary of the Company which (a) are approved by the board of directors of
Holdings, the Company or such Subsidiary, as applicable, or (b) are in the
ordinary course of business of Holdings, the Company or such Subsidiary, as
applicable.
9.09. Restriction on Fundamental Changes. None of Holdings, the
Company or any of the Company's Subsidiaries shall (a) enter into any merger or
consolidation, or liquidate, wind-up or dissolve (or suffer any liquidation or
dissolution), except for a merger of a Domestic Borrower into another Domestic
Borrower, provided that the documents governing such merger are satisfactory to
the Requisite Lenders and a merger of a Wholly Owned Subsidiary (other than a
Borrower) into the Company (with the Company as the surviving corporation) or
another Wholly Owned Subsidiary or the dissolution of a Subsidiary of the
Company that
-141-
is not a party to any Loan Document and the Capital Stock of which is not
pledged in full or in part to the Agent, or convey, lease, sell, transfer or
otherwise dispose of, in one transaction or series of transactions, all or
substantially all of Holdings, the Company's or any such Subsidiary's business
or Property, whether now or hereafter acquired, except transactions permitted
under Section 9.02 or (b) enter into any partnership or joint venture (other
than (x) profit sharing arrangements with suppliers that are not conducted
through a corporation or partnership established for such purpose and (y)
partnerships or joint ventures which are at least 51% owned by a Domestic
Borrower.
9.10. Sales and Leasebacks; Operating Leases. (a) None of Holdings,
the Company or any of the Company's Subsidiaries shall enter into any Sale and
Leaseback Transaction except to the extent otherwise permitted by Article X and
in an aggregate amount not to exceed the amount specified in Section 9.01(vii).
(b) None of Holdings, the Company or any of the Company's
Subsidiaries shall become liable in any way, whether directly or by assignment
or by Accommodation Obligation, for the obligations of a lessee under any
Operating Lease unless, immediately after giving effect to the incurrence of
liability with respect to such Operating Lease, the aggregate amount of all
rents paid or accrued under all Operating Leases of Holdings, the Company and
the Company's Subsidiaries (determined in conformity with GAAP) shall not exceed
$4,000,000 in any Fiscal Year.
9.11. Margin Regulations; Securities Laws. None of Holdings, the
Company or any of the Company's Subsidiaries, shall use all or any portion of
the proceeds of any credit extended hereunder to purchase or carry Margin Stock.
9.12. ERISA and Certain Employment Matters. The Company shall not:
(i) engage, or permit any ERISA Affiliate to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of the
Internal Revenue Code for which a statutory or class exemption is not
available or a private exemption has not been previously obtained from the
DOL or with respect to which the aggregate liability of the Company and
its ERISA Affiliates arising from such transaction is greater than
$1,000,000;
(ii) permit to exist any accumulated funding deficiency (as defined
in sections 302 of ERISA and 412 of the Internal Revenue Code), with
respect to any Benefit Plan, whether or not waived;
-142-
(iii) fail, or permit any ERISA Affiliate to fail, to pay timely
required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(iv) terminate, or permit any ERISA Affiliate to terminate, any
Benefit Plan which would result in a material liability of Company or any
ERISA Affiliate under Title IV of ERISA;
(v) fail to make any contribution or payment to any Multiemployer
Plan which Company or any ERISA Affiliate may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto;
(vi) fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required that would give rise to
a Lien under Section 412 of the Internal Revenue Code on or before the due
date for such installment or other payment;
(vii) amend, or permit any ERISA Affiliate to amend, a Plan
resulting in an increase in current liability for the plan year such that
the Company or any ERISA Affiliate is required to provide security to such
Plan under Section 401(a)(29) of the Internal Revenue Code;
(viii) permit any unfunded liabilities with respect to any Foreign
Pension Plan other than as permitted under local law; or
(ix) fail, or permit any Subsidiary or ERISA Affiliate to fail, to
pay any required contributions or payments to a Foreign Pension Plan on or
before the due date for such required installment or payment.
9.13. Issuance or Sale of Capital Stock. Other than pursuant to the
Registration Statement, the Retirement Plan, the ESOP, the Shareholders'
Agreement and the Nonvoting Common Stock Purchase Agreement, none of the Company
or any of the Company's Subsidiaries shall (i) issue any Capital Stock, except,
in the case of the Company, the Capital Stock of the Company issued to Holdings
on or prior to the Closing Date and, in the case of Company's Subsidiaries, the
Capital Stock of any such Subsidiary to the extent the creation thereof is
permitted pursuant to Sections 9.04 and 9.07, (ii) grant any rights (either
preemptive or other) to subscribe for or to purchase, or any option for the
purchase of, its Capital Stock or (iii) create calls, commitments, or claims of
any character relating to any of its Capital Stock. The Company shall not sell
or otherwise dispose of, or permit the sale or disposition of, any shares of
Capital Stock of any of its Subsidiaries, except (x) as required by
-143-
applicable law for the qualification of directors or to satisfy minimum
shareholder requirements and (y) for the Capital Stock of Subsidiaries of the
Company that are not party to any Loan Document and the Capital Stock of which
is not pledged in full or in part to the Agent or the Canadian Agent.
9.14. Constituent Documents. None of Holdings, the Company or any of
the Company's Subsidiaries shall materially amend, modify or otherwise change
any of the terms or provisions in any of their respective Constituent Documents
as in effect on the Closing Date, except that Holdings, the Company or any such
Subsidiary may change its name, provided that any change of name of Holdings,
the Company or any Subsidiary party to the Subsidiary Security Agreement shall
be made in accordance with the Holdings Security Agreement, the Borrower
Security Agreements and the Subsidiary Security Agreements, respectively.
9.15. Fiscal Year. None of Holdings, the Company or any of the
Company's Subsidiaries shall change its Fiscal Year for accounting or tax
purposes from a period consisting of the 12-month period ending on December 31
of each calendar year.
9.16. Cancellation of Debt; Prepayment; Certain Amendments. Neither
Holdings, nor the Company, nor any of the Company's Subsidiaries shall (i)
cancel any material claim or debt or amend or modify the terms thereof, except
in the ordinary course of its business or pursuant to the exercise of reasonable
business judgment or (ii) except for regularly scheduled payments as expressly
permitted pursuant to the terms of the Loan Documents, prepay, redeem, purchase,
repurchase, defease or retire the Finova Indebtedness or any other long-term
Indebtedness; provided, however, after the inception of the Permitted
Receivables Financing Program, the Borrowers shall be entitled to prepay the
Finova Indebtedness or any such other long-term Indebtedness (other than
Permitted Subordinated Indebtedness) by an amount limited to the excess, if any,
of the average aggregate Revolving Credit Availability under all Credit
Facilities (plus the average liquidity available to the Borrowers under the
Permitted Receivables Financing Program) during the thirty (30) days immediately
preceding the date set for such prepayment over $20,000,000, or (iii) terminate,
amend, supplement or otherwise modify the terms of (A) the Acquisition Documents
(other than the Common Equity Notes) in any respect that is materially adverse
to the Lenders or (B) the Finova Documents, the Common Equity Notes, the
Permitted Receivables Transaction Documents or any documents evidencing the
Permitted Subordinated Indebtedness in any respect that is adverse to the
Lenders .
9.17. Environmental Matters. Neither Holdings, nor the Company, nor
any of Company's Subsidiaries shall become subject to any Liabilities and Costs
which would have a Material
-144-
Adverse Effect arising out of or related to (a) the Release or threatened
Release at any location of any Contaminant into the environment, or any Remedial
Action in response thereto, or (b) any violation of any Environmental, Health
and Safety Requirements of Law.
9.18. Cash Management. Neither the Company nor any of its
Subsidiaries may open any deposit or payroll account except in accordance with
Section 3.05, or as may be required after the Closing Date pursuant to the
Permitted Receivables Transaction Documents. The Company shall not authorize or
direct any Person to take any action with respect to amounts deposited in the
Lockboxes, the Collection Accounts, the Cash Collateral Accounts, the Canadian
Cash Collection Account or the U.S. Concentration Account in contravention of
the provisions hereof.
9.19. [Intentionally Omitted]
9.20. No New Restrictions on Subsidiary Dividends. Except to the
extent that any such agreement may be contained in the Loan Documents or the
Permitted Receivables Transaction Documents, neither Holdings nor the Company
will agree, or permit any of the Company's Subsidiaries to agree, to create or
otherwise permit to exist any consensual encumbrance or restriction of any kind
on the ability of any of the Company's Subsidiaries to pay dividends or make any
other distribution or transfer of funds or assets or make loans or advances to
or other Investments in, or pay any Indebtedness owing to, the Company.
ARTICLE X
FINANCIAL COVENANTS
Each of Holdings and the Borrowers (other than the Canadian Borrower
which so covenants in favor of the Canadian Lenders only with respect to itself
and its consolidated liabilities, assets, business and opportunities) covenants
and agrees that so long as any Commitment is outstanding and thereafter until
Payment In Full of all of the Obligations, unless the Requisite Lenders shall
otherwise give prior written consent thereto:
10.01. Minimum Consolidated Tangible Net Worth. Holdings and its
Subsidiaries shall maintain a Consolidated Tangible Net Worth at all times (i)
with respect to the first fiscal quarter of 1996, from the Closing Date until
the day preceding the last day of such fiscal quarter and (ii) with respect to
each fiscal quarter in each Fiscal Year set forth below thereafter, in each case
from the last day of the fiscal quarter preceding such fiscal quarter to the day
preceding the last day of such fiscal quarter of not be less than the minimum
-145-
amount set forth opposite such fiscal quarter:
Period Minimum Amount
------ --------------
First fiscal quarter of 1996 $18,000,000
Second fiscal quarter of 1996 19,000,000
Third fiscal quarter of 1996 20,500,000
Fourth fiscal quarter of 1996 22,000,000
First fiscal quarter of 1997 23,125,000
Second fiscal quarter of 1997 24,250,000
Third fiscal quarter of 1997 25,375,000
Fourth fiscal quarter of 1997 26,500,000
First fiscal quarter of 1998 27,750,000
Second fiscal quarter of 1998 29,000,000
Third fiscal quarter of 1998 30,250,000
Fourth fiscal quarter of 1998 31,500,000
First fiscal quarter of 1999 33,125,000
Second fiscal quarter of 1999 34,750,000
Third fiscal quarter of 1999 36,375,000
Fourth fiscal quarter of 1999 38,000,000
10.02. Minimum Fixed Charge Coverage Ratio. Holdings and its
Subsidiaries shall maintain a Fixed Charge Coverage Ratio on a consolidated
basis, as determined as of the last day of each fiscal quarter set forth below
for the four fiscal quarter period ending on such date (or if the period from
the Closing Date to such last day is less than four full fiscal quarters, such
shorter period), shall not be less than the minimum ratio set forth opposite
such fiscal quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
Second fiscal quarter of 1996 1.00 to 1
Third fiscal quarter of 1996 1.00 to 1
Fourth fiscal quarter of 1996 1.00 to 1
First fiscal quarter of 1997 1.05 to 1
Second fiscal quarter of 1997 1.10 to 1
Third fiscal quarter of 1997 1.10 to 1
Fourth fiscal quarter of 1997 1.20 to 1
First fiscal quarter of 1998 1.20 to 1
Second fiscal quarter of 1998 1.25 to 1
Third fiscal quarter of 1998 1.25 to 1
Fourth fiscal quarter of 1998 and
each fiscal quarter thereafter 1.30 to 1
10.03. Maximum Capital Expenditures. Capital Expenditures made or
incurred by the Company and its Subsidiaries on a consolidated basis during any
Fiscal Year shall not exceed $1,750,000; provided, that in the event Capital
Expenditures in any Fiscal Year are less than the maximum specified above for
such Fiscal Year, the unspent amount for such Fiscal Year may be carried over to
the next succeeding Fiscal Year (such carry-over
-146-
amount being available only for use in such succeeding Fiscal Year and being
treated as the last amount spent in such succeeding Fiscal Year, in each case
for purposes of applying this proviso to such Fiscal Year).
ARTICLE XI
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.01. Events of Default. Each of the following occurrences shall
constitute an Event of Default hereunder:
(a) Failure to Make Payments When Due. Any Borrower shall fail to
pay (i) when due any principal or interest on the Loans (including the
Reimbursement Obligations) or any other fees payable hereunder or (ii) any other
Obligation, and if such non-payment relates to Obligations other than interest,
principal or fees, such non-payment continues for a period of five (5) Business
Days after the due date thereof.
(b) Breach of Certain Covenants. Holdings or any Borrower shall fail
to perform or observe duly and punctually any agreement, covenant or obligation
binding on such Person under (i) Section 7.02, 7.03, 7.05, 8.01, 8.02 or 8.05
(solely with respect to the failure to pay insurance premiums which has the
effect of terminating any insurance policy required to be maintained pursuant to
such section), or (ii) Article IX or Article X.
(c) Breach of Representation or Warranty. Any repre sentation or
warranty made or deemed made by Holdings, the Company or any of the Company's
Subsidiaries to the Agent, any Lender or any Issuing Bank herein or in any other
Loan Document or in any certificate at any time given by any such Person
pursuant to any Loan Document shall be false or misleading in any material
respect on the date made (or deemed made).
(d) Other Defaults. Holdings or any Borrower shall default in the
performance of or compliance with any term contained herein (other than as
covered by paragraphs (a), (b) or (c) of this Section 11.01), or Holdings, the
Company or any of the Company's Subsidiaries shall default in the performance of
or compliance with any term contained in any other Loan Document, and such
default shall continue for (i) five (5) Business Days after the occurrence
thereof with any respect to any term contained in Section 8.06; (ii) ten (10)
Business Days after the occurrence thereof with respect to any term contained in
Section 7.01 or 8.14(i); and (iii) thirty (30) days after the occurrence thereof
with respect to any other term.
(e) Default as to Other Indebtedness; Operating Leases. Holdings,
the Company or any of the Company's
-147-
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) after any
grace period applicable thereto with respect to the Finova Indebtedness, any
Permitted Subordinated Indebtedness or any other Indebtedness (other than an
Obligation) in excess of $1,000,000; or any breach, default or event of default
shall occur, or any other condition shall exist under any instrument, agreement
or indenture pertaining to any such, if the effect thereof is (or, with the
giving of notice or lapse of time or both, would be) to cause an acceleration,
mandatory redemption or other required repurchase of such Indebtedness, or
permit the holders of such Indebtedness to accelerate the maturity of such
Indebtedness or require the redemption or other repurchase of such Indebtedness;
or any such Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or otherwise
repurchased by Holdings, the Company or any of the Company's Subsidiaries (other
than by a regularly scheduled required prepayment, mandatory redemption or
required repurchase) prior to the stated maturity thereof; or any breach,
default or event of default remaining uncured for a period of sixty (60) days on
the part of Holdings, the Company or any of the Company's Subsidiaries shall
occur under any Operating Lease to which the Company or any of its Subsidiaries
is a party pursuant to which rental payments thereunder equal or exceed
$1,000,000 per annum; or any event shall have occurred and be continuing which
constitutes an "Event of Termination" under and as defined in the Permitted
Receivables Transaction Documents, or which could otherwise cause the early
termination of the Permitted Receivables Financing Program.
-148-
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case, proceeding or other action shall be
commenced against Holdings, the Company or any of its Subsidiaries (A) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have any
order for relief entered with respect to it, or seeking to adjudicate it as
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
wind-up, liquidation, dissolution, composition or other relief with respect to
it or its debts, or (B) seeking appointment of a receiver, trustee,
receiver-manager, liquidator, sequestrator, administrator, custodian or similar
official for it or for all or any substantial part of its assets which case,
proceeding or other action results in entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or unbonded
for period of sixty (60) days; or a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of Holdings, the Company or
any of the Company's Subsidiaries in an involuntary case, under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in effect; or any
other similar relief shall be granted under any applicable federal, state, local
or foreign law.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, receiver-manager, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
Holdings, the Company or any of the Company's Subsidiaries or over all or a
substantial part of the Property of Holdings, the Company or any of the
Company's Subsidiaries shall be entered; or an interim receiver, trustee or
other custodian of Holdings, the Company or any of the Company's Subsidiaries or
of all or a substantial part of the property of Holdings, the Company or any of
the Company's Subsidiaries shall be appointed or a warrant of attachment,
execution or similar process against any substantial part of the Property of
Holdings, the Company or any of the Company's Subsidiaries shall be issued and
any such event shall not be stayed, dismissed, bonded or discharged within sixty
(60) days after entry, appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. Holdings,
the Company or any of the Company's Subsidiaries shall (i) commence any
voluntary case, proceeding or other action (A) under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have any order for relief
entered with respect to it, or seeking to adjudicate
-149-
it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
wind-up, liquidation, dissolution, composition or other relief with respect to
it or its debts, or (B) seeking appointment of a receiver, trustee,
receiver-manager, liquidator, sequestrator, administrator, custodian or similar
official for it or for all or any substantial part of its assets or (ii) shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
(iii) shall consent to the appointment of or taking possession by a receiver,
receiver-manager, liquidator, sequestrator, trustee or other custodian or other
officer for all or a substantial part of its property; (iv) or Holdings, the
Company or any of the Company's Subsidiaries shall generally not pay its debts
as such debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make any general assignment for the benefit of
creditors or (v) the Borrower shall take any other action to authorize any of
the actions set forth in this paragraph (g).
(h) Judgments. Holdings, the Company or any of the Company's
Subsidiaries shall permit any judgments or orders against any of them or any of
their respective assets for the payment of money in excess of $1,000,000 in the
aggregate at any one time in excess of any available insurance proceeds to
remain undischarged during a period of forty-five (45) consecutive days unless
during such period such judgments or orders shall be effectively stayed, vacated
or discharged on appeal or otherwise.
(i) Dissolution. Any order, judgment or decree shall be entered
against Holdings, the Company or any of the Company's Subsidiaries, decreeing
its involuntary dissolution or other similar proceeding, and such order shall
remain undischarged and unstayed for a period in excess of sixty (60) days; or
Holdings, the Company or any of the Company's Subsidiaries shall otherwise
dissolve or cease to exist except as specifically permitted hereby.
(j) Loan Documents; Failure of Security. At any time, for any
reason, (i) any Loan Document ceases to be in full force and effect (except in
accordance with its terms) or Holdings, the Company or any of the Company's
Subsidiaries party thereto seeks to repudiate its obligations thereunder and the
Liens intended to be created thereby are, or Holdings, the Company or any such
Subsidiary seeks to render such Liens, invalid or unperfected, or (ii) Liens in
favor of the Agent, the Issuing Banks and/or the Lenders contemplated by the
Loan Documents shall, at any time, for any reason, be invalidated or otherwise
cease to be in full force and effect, or such Liens shall be subordinated or
shall not have the priority contemplated hereby or by the other Loan Documents.
-150-
(k) Termination Event. Any Termination Event occurs which the Agent
reasonably believes could subject either the Company or any ERISA Affiliate to a
liability in excess of $1,000,000.
(l) Waiver of Minimum Funding Standard. If the plan administrator of
any Plan applies under Section 412(d) of the Internal Revenue Code for a waiver
of the minimum funding standards of Section 412(a) of the Internal Revenue Code
and the Agent believes the substantial business hardship upon which the
application for the waiver is based could subject either Holdings, the Company
or any ERISA Affiliate to a material liability.
(m) Material Adverse Change. An event shall exist or occur which has
a Material Adverse Effect.
(n) Intercreditor Agreement. Any of the parties to the Intercreditor
Agreement (other than the Agent and the Lenders) shall fail to perform any
material covenant or material obligation binding on such party or the
Intercreditor Agreement shall cease to be in full force and effect.
(o) Change of Control. A Change of Control shall have occurred.
An Event of Default shall be deemed "continuing" until cured or waived in
accordance with Section 13.07.
-151-
11.02. Rights and Remedies.
(a) Acceleration and Termination. Upon the occurrence of any Event
of Default described in Sections 11.01(f) or 11.01(g), the Revolving Credit
Commitments shall automatically and immediately terminate and the unpaid
principal amount of, and any and all accrued interest on, the Obligations and
all accrued fees shall automatically become immediately due and payable, without
presentment, demand, or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence, presentment, notice
of intent to demand or accelerate and of acceleration), all of which are hereby
expressly waived by the Borrowers; and upon the occurrence and during the
continuance of any other Event of Default, the Agent shall at the request, or
may with the consent, of the Requisite Lenders, by written notice to the
Company, (i) declare that all or any portion of the Revolving Credit Commitments
are terminated, whereupon the Revolving Credit Commitments and the obligation of
each Lender to make any Loan hereunder and of each Lender or Issuing Bank to
Issue or participate in any Letter of Credit not then Issued shall immediately
terminate, and/or (ii) declare the unpaid principal amount of and any and all
accrued and unpaid interest on the Obligations to be, and the same shall
thereupon be, immediately due and payable, without presentment, demand, or
protest or other requirements of any kind (including, without limitation,
valuation and appraisement, diligence, presentment, notice of intent to demand
or accelerate and of acceleration), all of which are hereby expressly waived by
the Borrowers.
(b) Deposit for Letters of Credit. In addition, after the occurrence
and during the continuance of an Event of Default, the Borrowers (other than the
Canadian Borrower) jointly and severally agree, promptly upon demand by the
Agent (given upon the written instructions of the Requisite Lenders or, in the
absence of such instructions, in its sole discretion), to deliver to the Agent,
Cash Collateral in such form as requested by the Agent for deposit in the
applicable Cash Collateral Account, together with such endorsements, and
execution and delivery of such documents and instruments as the Agent may
reasonably request in order to perfect or protect the Agent's Lien with respect
thereto, in an aggregate principal amount equal to the then outstanding Letter
of Credit Obligations.
(c) Rescission. If at any time after termination of the Revolving
Credit Commitments and/or acceleration of the maturity of the Loans, the
Borrowers shall pay all arrears of interest and all payments on account of
principal of the Loans and Reimbursement Obligations which shall have become due
other wise than by acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates speci-
-152-
fied herein) and all Events of Default and Defaults (other than nonpayment of
principal of and accrued interest on the Loans due and payable solely by virtue
of acceleration) shall be remedied or waived pursuant to Section 13.07, then
upon the written consent of the Requisite Lenders and written notice to the
Company, the termination of the Revolving Credit Commitments and/or the
acceleration and the consequences of such termination and/or acceleration may be
rescinded and annulled; but such action shall not affect any subsequent Event of
Default or Default or impair any right or remedy consequent thereon. The
provisions of the preceding sentence are intended merely to bind the Lenders and
the Issuing Banks to a decision which may be made at the election of the
Requisite Lenders; they are not intended to benefit the Borrowers and do not
give any Borrower the right to require the Lenders to rescind or annul any
acceleration here under, even if the conditions set forth herein are met.
(d) Enforcement. The Borrowers acknowledge that in the event
Holdings, the Company or any of the Company's Subsidiaries fails to perform,
observe or discharge any of its respective obligations or liabilities hereunder
or under any other Loan Document, any remedy of law may prove to be inadequate
relief to the Agent, the Issuing Banks and the Lenders; therefore, each Borrower
agrees that the Agent, the Issuing Banks and the Lenders shall be entitled after
the occurrence and during the continuance of an Event of Default to temporary
and permanent injunctive relief in any such case without the necessity of
proving actual damages.
11.03. Cash Collateral. The Agent may, at any time after an Event of
Default has occurred and is continuing, and otherwise consistent with the
Uniform Commercial Code (or any applicable Requirements of Law in any other
relevant jurisdiction), sell or cause to be sold any Cash Equivalents being held
by the Agent as Cash Collateral (in the Canadian Cash Collection Account, any
Cash Collateral Account, or otherwise) at any broker's board or at public or
private sale, in one or more sales or lots, at such price as the Agent may deem
best, without assumption of any credit risk, and the purchaser of any or all
such Cash Equivalents so sold shall thereafter own the same, absolutely free
from any claim, encumbrance or right of any kind whatsoever. The Agent, any of
the Lenders and any of the Issuing Banks may, in its own name or in the name of
a designee or nominee, buy such Cash Equivalents at any public sale and, if
permitted by applicable law, buy such Cash Equivalents at any private sale. The
Agent shall apply the proceeds of any such sale, net of any expenses incurred in
connection therewith, and any other funds deposited in (x) the Cash Collateral
Accounts (other than the Canadian Cash Collateral Account), to the payment of
the Obligations in accordance with this Agreement and (y) the Canadian Cash
Collection Account and the Canadian Cash Collateral Account to the payment of
the Obligations under the Canadian
-153-
Facility in accordance with this Agreement. Each Borrower agrees that (i) each
sale of Cash Equivalents shall be conducted in conformity with reasonable
commercial practices of banks, commercial finance companies, insurance companies
or other financial institutions disposing of property similar to such Cash
Equivalents and shall be deemed to be commercially reasonable and (ii) any
requirement of reasonable notice shall be met if such notice is received by the
Company at its notice address on the signature pages hereto at least ten (10)
Business Days before the time of the sale or disposition. Any other requirement
of notice, demand or advertisement for sale is waived to the extent permitted by
law. The Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
11.04. License for Use of Software and Other Intellectual Property.
Unless expressly prohibited by the licensor thereof, if any, the Agent (and with
respect to the Property of the Canadian Borrower, the Canadian Agent) is hereby
granted a license to use, without charge, the computer programs, software,
printouts and other computer materials, technical knowledge or processes, data
bases, materials, trademarks, registered trademarks, trademark applications,
service marks, registered service marks, service xxxx applications, patents,
patent applications, trade names, industrial designs, rights of use of any name,
labels, fictitious names, inventions, designs, trade secrets, goodwill,
registrations, copyrights, copyright applications, Permits, licenses,
franchises, customer lists, credit files, correspondence, and advertising
materials or any Property of a similar nature of each of Holdings, the Company
or any Subsidiary of the Company, in each case, as it pertains to the Collateral
owned by such Person, or any rights to any of the foregoing, in completing
production of, advertising for sale, and selling any of such Collateral, and
such Person's rights under all licenses and franchise agreements shall inure to
the benefit of the Agent (or in the case of a license or franchise agreement of
the Canadian Borrower, the Canadian Agent). Each of the Agent and the Canadian
Agent agrees not to use any such license prior to the occurrence of an Event of
Default without giving prior notice to Holdings, the Company or the applicable
Subsidiary of the Company.
ARTICLE XII
THE AGENT AND THE CANADIAN AGENT
12.01. Appointment. (a) Each U.S. Lender and each U.S. Issuing Bank,
and each Multicurrency Lender under the Multicurrency Facility, and with respect
to Collateral (other than that of the Canadian Borrower), each Canadian Lender
and each Canadian Issuing Bank, hereby designates and appoints
-154-
Citicorp as the Agent hereunder, and each such Person hereby irrevocably
authorizes the Agent to execute such documents (including, without limitation,
the Loan Documents to which the Agent is a party) and to take such other action
on such Person's behalf under the provisions hereof and of the Loan Documents
and to exercise such powers as are set forth herein or therein together with
such other powers as are reasonably incidental thereto. As to any matters not
expressly provided for hereby (including, without limitation, enforcement or
collection of the Notes or any amount payable under any provision of Article III
when due) or the other Loan Documents, the Agent shall not be required to
exercise any discretion or take any action. Notwithstanding the foregoing, the
Agent shall be required to act or refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Requisite Lenders (or, where required by the express terms hereof, a different
proportion of the Lenders) and such instructions shall be binding upon all
Lenders, Issuing Banks and Holders; provided, however, the Agent shall not be
required to take any action which (i) the Agent reasonably believes shall expose
it to personal liability unless the Agent receives an indemnification
satisfactory to it from the Lenders with respect to such action or (ii) is
contrary hereto, to the other Loan Documents or applicable law. The Agent agrees
to act as such on the express conditions contained in this Article XII.
(b) Each Canadian Lender and each Canadian Issuing Bank hereby
designates and appoints Citibank Canada as the Canadian Agent hereunder, and
each such Person hereby irrevocably authorizes the Canadian Agent to execute
such documents (including, without limitation, the Loan Documents to which the
Canadian Agent is a party) and to take such other action on such Person's behalf
under the provisions hereof and of the Loan Docu ments and to exercise such
powers as are set forth herein or therein together with such other powers as are
reasonably incidental thereto. As to any matters not expressly provided for
hereby (including, without limitation, enforcement or collection of the Canadian
Notes or any amount payable under any provision of Article III when due) or the
other Loan Documents, the Canadian Agent shall not be required to exercise any
discretion or take any action. Notwithstanding the foregoing, the Canadian Agent
shall be required to act or refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the Requisite
Lenders (or, where required by the express terms hereof, a different proportion
of the Lenders) and such instructions shall be binding upon all Lenders, Issuing
Banks and Holders; provided, however, the Canadian Agent shall not be required
to take any action which (i) the Canadian Agent reasonably believes shall expose
it to personal liability unless the Canadian Agent receives an indemnification
satisfactory to it from the Lenders with respect to such action or (ii) is
contrary hereto, to the other Loan Documents or applicable law. The
-155-
Canadian Agent agrees to act as such on the express conditions contained in this
Article XII.
(c) The provisions of this Article XII are solely for the benefit of
the Agent, the Canadian Agent, the Lenders and Issuing Banks, and none of
Holdings, the Company or the Company's Subsidiaries shall have any rights to
rely on or enforce any of the provisions hereof (other than as expressly set
forth in Sec tions 12.07 and 12.09). In performing their respective functions
and duties hereunder, the Agent and the Canadian Agent shall act solely as agent
of the applicable Lenders and the Issuing Banks and do not assume and shall not
be deemed to have assumed any obligation or relationship of agency, trustee or
fiduciary with or for Holdings, the Company or any Subsidiary of the Company.
Each of the Agent and the Canadian Agent may perform any of its duties
hereunder, or under the Loan Documents, by or through its respective agents or
employees.
12.02. Nature of Duties. The Agent and the Canadian Agent shall not
have any duties or responsibilities except those expressly set forth herein or
in the Loan Documents. The duties of the Agent and the Canadian Agent shall be
mechanical and administrative in nature. The Agent and the Canadian Agent shall
not have by reason hereof a fiduciary relationship in respect of any Holder.
Nothing herein or in any of the Loan Documents, expressed or implied, is
intended to or shall be construed to impose upon the Agent or the Canadian Agent
any obligations in respect hereof or any of the Loan Documents except as
expressly set forth herein or therein. Each Lender and each Issuing Bank shall
make its own independent investigation of the financial condition and affairs of
Holdings, the Company and the Company's Subsidiaries in connection with the
making and the continuance of the Loans hereunder and with the issuance of the
Letters of Credit and shall make its own appraisal of the creditworthiness of
Holdings, the Company and the Company's Subsidiaries initially and on a
continuing basis, and the Agent and the Canadian Agent shall not have any duty
or responsibility, either initially or on a continuing basis, to provide any
Holder with any credit or other information with respect thereto (except for
reports required to be delivered by the Agent and the Canadian Agent under the
terms hereof). If either the Agent or the Canadian Agent seeks the consent or
approval of any of the Lenders to the taking or refraining from taking of any
action hereunder, the Agent and the Canadian Agent shall send notice thereof to
each Lender. The Agent and the Canadian Agent shall promptly notify each Lender
at any time that the Lenders so required hereunder have instructed the Agent and
the Canadian Agent to act or refrain from acting pursuant hereto.
12.03. Rights, Exculpation, Etc. (a) Liabilities; Responsibilities.
None of the Agent, the Canadian Agent, any Affiliate of the Agent or any
Affiliate of the Canadian Agent,
-156-
nor any of their respective officers, directors, employees or agents shall be
liable to any Holder for any action taken or omitted by them hereunder or under
any of the Loan Documents, or in connection therewith, except that no Person
shall be relieved of any liability imposed by law for gross negligence or
willful misconduct. Neither the Agent nor the Canadian Agent shall be liable for
any apportionment or distribution of payments made by it in good faith pursuant
to Section 3.02(b), and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Holder to whom payment was due, but not made, shall be to recover from other
Holders any payment in excess of the amount to which they are determined to have
been entitled. Neither the Agent nor the Canadian Agent shall be responsible to
any Holder for any recitals, statements, representations or warranties herein or
for the execution, effectiveness, genuineness, validity, legality,
enforceability, collectability, or sufficiency hereof or of any of the other
Loan Documents or the transactions contemplated thereby, or for the financial
condition of Holdings, the Company or any of the Company's Subsidiaries. Neither
the Agent nor the Canadian Agent shall be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions hereof or of any of the Loan Documents or the financial condition
of the Company or any of its Subsidiaries, or the existence or possible
existence of any Default or Event of Default.
(b) Right to Request Instructions. The Agent and the Canadian Agent
may at any time request instructions from the applicable Lenders with respect to
any actions or approvals which, by the terms of any of the Loan Documents, the
Agent or the Canadian Agent is permitted or required to take or to grant, and
the Agent and the Canadian Agent shall be absolutely entitled to refrain from
taking any action or to withhold any approval and shall not be under any
liability whatsoever to any Person for refraining from any action or withholding
any approval under any of the Loan Documents until it shall have received such
instructions from those Lenders from whom the Agent and the Canadian Agent are
required to obtain such instructions for the pertinent matter in accordance with
the Loan Documents. Without limiting the generality of the foregoing, no Holder
shall have any right of action whatsoever against the Agent or the Canadian
Agent as a result of the Agent or the Canadian Agent acting or refraining from
acting under the Loan Documents in accordance with the instructions of the
Requisite Lenders or, where required by the express terms hereof, a greater
proportion of the Lenders.
12.04. Reliance. Each of the Agent and the Canadian Agent shall be
entitled to rely upon any written notices, statements, certificates, orders or
other documents or any telephone message believed by it in good faith to be
genuine and correct and to have been signed, sent or made by the proper
-157-
Person, and with respect to all matters pertaining hereto or to any of the Loan
Documents and its duties hereunder or thereunder, upon advice of legal counsel
(including counsel for the Company), independent public accountants and other
experts selected by it.
12.05. Indemnification. (a) To the extent that the Agent is not
reimbursed and indemnified by the Borrowers (other than the Canadian Borrower),
the Lenders (other than the Canadian Lenders) shall reimburse and indemnify the
Agent for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or 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 action taken or omitted by the Agent under the Loan Documents, in proportion
to such Lender's Pro Rata Share of all Credit Facilities (without giving effect
to Canadian Facility); provided, however, such Lenders shall have no obligation
to the Agent with respect to the matters indemnified pursuant to this Section
12.05(a) resulting from the willful misconduct or gross negligence of the Agent,
as determined in a judgment by a court of competent jurisdiction. The
obligations of such Lenders under this Section 12.05(a) shall survive the
Payment In Full of the Loans, the Reimbursement Obligations and all other
Obligations and the termination hereof.
(b) To the extent that the Canadian Agent is not reimbursed and
indemnified by the Canadian Borrower, the Canadian Lenders shall reimburse and
indemnify the Canadian Agent for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or dis bursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Canadian Agent in any way relating to
or arising out of the Loan Documents or any action taken or omitted by the
Canadian Agent under the Loan Documents, in proportion to such Canadian Lender's
Pro Rata Share of the Canadian Facility; provided, however, the Canadian Lenders
shall have no obligation to the Canadian Agent with respect to the matters
indemnified pursuant to this Section 12.05(b) resulting from the willful
misconduct or gross negligence of the Canadian Agent, as determined in a
judgment by a court of competent jurisdiction. The obligations of the Canadian
Lenders under this Section 12.05(b) shall survive the Payment In Full of the
Loans, the Reimbursement Obligations and all other Obligations and the
termination hereof.
12.06. Citicorp and Citibank Canada Individually. With respect to
their respective Pro Rata Shares of the Revolving Credit Commitments hereunder,
if any, and the Loans made by it, if any, each of Citicorp and Citibank Canada
shall have and may exercise the same rights and powers hereunder and are subject
to the same obligations and liabilities as and to the extent set forth herein
for any other Lender under the applicable Credit
-158-
Facility. The terms "Lenders", "U.S. Lenders" or "Requisite Lenders" or any
similar terms shall, unless the context clearly otherwise indicates, include
Citicorp in its individual capacity as a Lender, a U.S. Lender or as one of the
Requisite Lenders. The terms "Lenders", "Canadian Lenders" or "Requisite
Lenders" or any similar terms shall, unless the context clearly otherwise
indicates, include Citibank Canada in its individual capacity as a Lender, a
Canadian Lender or as one of the Requisite Lenders. Each of Citicorp, Citibank
Canada and their respective Affiliates may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with the
Company or any of its Subsidiaries as if Citicorp were not acting as Agent and
Citibank Canada were not acting as Canadian Agent pursuant hereto.
12.07. Successor Agents; Resignation of Agents. (a) Resignation. The
Agent may resign from the performance of its functions and duties hereunder at
any time by giving at least thirty (30) Business Days' prior written notice to
the Company and the Lenders. Any resignation by the Agent shall be deemed to be
a resignation by the Canadian Agent. The resignation of the Agent and the
Canadian Agent shall take effect upon the acceptance by a successor Agent and
Canadian Agent of appointment pursuant to this Section 12.07.
(b) Appointment by Requisite Lenders. Upon any such notice of
resignation by the Agent, the Requisite Lenders shall have the right to appoint
a successor Agent and Canadian Agent selected from among the U.S. Lenders and
Canadian Lenders, respectively, which appointment shall be subject to the prior
written approval of the Company (which may not be unreasonably withheld, and
shall not be required upon the occurrence and during the continuance of an Event
of Default). Any successor Agent (or an Affiliate thereof) must also be the
Canadian Agent.
(c) Appointment by Retiring Agent. If a successor Agent and Canadian
Agent shall not have been appointed within the thirty (30) Business Day period
provided in paragraph (a) of this Section 12.07, the retiring Agent and Canadian
Agent, with the consent of the Company (which may not be unreasonably withheld,
and shall not be required upon the occurrence and during the continuance of an
Event of Default), shall then appoint a successor Agent and Canadian Agent who
shall serve as Agent and Canadian Agent, respectively, until such time, if any,
as the Requisite Lenders appoint a successor Agent and Canadian Agent as
provided above.
(d) Rights of the Successor and Retiring Agents. Upon the acceptance
of any appointment as Agent or Canadian Agent hereunder by a successor Agent or
Canadian Agent, such successor Agent and Canadian Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the
-159-
retiring Agent and Canadian Agent, respectively, and each of the retiring Agent
and Canadian Agent shall be discharged from its duties and obligations hereunder
thereafter to be performed. After the resignation of any Agent or Canadian Agent
hereunder, the provisions of this Article XII shall inure to such Persons'
benefit as to any actions taken or omitted to be taken by it while it was the
Agent or the Canadian Agent, as applicable, hereunder.
12.08. Relations Among Lenders. Each Lender and each Issuing Bank
agrees that it shall not take any legal action, nor institute any actions or
proceedings, against Holdings, the Company or any other obligor hereunder or
with respect to any Collateral without the prior written consent of the
Requisite Lenders. Without limiting the generality of the foregoing, no Lender
may accelerate or otherwise enforce its portion of the Obligations, or terminate
its Revolving Credit Commitments except in accordance with Section 11.02(a) or a
setoff permitted under Section 13.05.
12.09. Concerning the Collateral and the Loan Documents. (a)
Protective Advances. The Agent, with respect to the Domestic Borrowers and the
Multicurrency Borrower, and the Canadian Agent, with respect to the Canadian
Borrower, may from time to time, after the occurrence and during the continuance
of an Event of Default, make such disbursements and advances to or for the
account of any such Borrower pursuant to the Loan Documents which the Agent or
the Canadian Agent, as applicable, in its sole discretion, deems necessary or
desirable to preserve or protect the Collateral under the applicable Credit
Facility or any portion thereof or, to the extent such advance is consented to
by such Borrower, to enhance the likelihood or maximize the amount of repayment
of the Loans and other Obligations up to an amount, in each case not in excess
of the lesser of the Revolving Credit Availability under such Credit Facility at
such time and (i) $1,000,000 in the aggregate for all Credit Facilities with
respect to advances made by the Agent or the Canadian Agent without such
Borrower's consent or (ii) $5,000,000 in the aggregate for all Credit Facilities
with respect to advances made by the Agent or the Canadian Agent with the
consent of such Borrower ("Protective Advances"). The Agent or the Canadian
Agent, as applicable, shall notify the Company and each Lender in writing of
each such Protective Advance, which notice shall include a description of the
purpose of such Protective Advance. The Borrowers (other than the Canadian
Borrower) jointly and severally agree to pay the Agent, upon demand, the
principal amount of all outstanding Protective Advances under the U.S. Facility
and/or the Multicurrency Facility, together with interest thereon at the rate
from time to time applicable to Floating Rate Loans under such Credit Facility
from the date of such Protective Advance until the outstanding principal balance
thereof is paid in full. The Canadian Borrower agrees to pay the
-160-
Canadian Agent, upon demand, the principal amount of all outstanding Protective
Advances under the Canadian Facility, together with interest thereon at the rate
from time to time applicable to the Canadian Loans from the date of such
Protective Advance until the outstanding principal balance thereof is paid in
full. If the applicable Borrower(s) fail to make payment in respect of any
Protective Advance within one (1) Business Day after the date the Company
receives written demand therefor from the Agent or the Canadian Agent, as the
case may be, the Agent or the Canadian Agent shall promptly notify each Lender
under the applicable Credit Facility and such Lender agrees that it shall
thereupon make available to the Agent, in Dollars or Canadian Dollars, as
applicable, in immediately available funds, the amount equal to such Lender's
Pro Rata Share under the applicable Credit Facility of such Protective Advance.
If such funds are not made available to the Agent or the Canadian Agent, as
applicable, by such Lender within one (1) Business Day after the Agent's or
Canadian Agent's demand therefor, the Agent or the Canadian Agent shall be
entitled to recover any such amount from such Lender together with interest
thereon at the Interbank Rate for each day during the period commencing on the
date of such demand and ending on the date such amount is received. The failure
of any Lender to make available to the Agent or the Canadian Agent such Pro Rata
Share of any such Protective Advance shall neither relieve any other Lender of
its obligation hereunder to make available to the Agent or the Canadian Agent
such other Lender's Pro Rata Share under the applicable Credit Facility of such
Protective Advance on the date such payment is to be made nor increase the
obligation of any other Lender to make such payment to the Agent or the Canadian
Agent. All outstanding principal of, and interest on, Protective Advances shall
constitute Obligations secured by the Collateral until paid in full by the
applicable Borrower(s).
(b) Authority. Each Lender and each Issuing Bank authorizes and
directs the Agent to enter into the Loan Documents relating to the Collateral
for the benefit of the Lenders and the Issuing Banks. Each Canadian Lender and
each Issuing Bank under the Canadian Facility authorizes and directs the
Canadian Agent to enter into the Loan Documents relating to the Collateral for
the benefit of the Canadian Lenders and the Canadian Issuing Banks. Each Lender
and each Issuing Bank agrees that any action taken by the Agent, the Canadian
Agent or the Requisite Lenders (or, where required by the express terms hereof,
a different proportion of the Lenders) in accordance with the provisions hereof
or of the other Loan Documents, and the exercise by the Agent, the Canadian
Agent or the Requisite Lenders (or, where so required, such different
proportion) of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding
upon all of the Lenders and Issuing Banks. Without limiting the generality of
the foregoing, the Agent and the Canadian Agent, as
-161-
to any applicable Credit Facility, shall have the sole and exclusive right and
authority to (i) act as the disbursing and collecting agent for the Lenders and
the Issuing Banks under such Credit Facility with respect to all payments and
collections arising in connection herewith and with the Loan Documents relating
to the Collateral; (ii) execute and deliver each Loan Document relating to the
Collateral and accept delivery of each such agreement delivered by Holdings, the
Company or any of the Company's Subsidiaries; (iii) act as collateral agent for
the Lenders and the Issuing Banks for purposes of the perfection of all security
interests and Liens created by such agreements and all other purposes stated
therein, provided, however, the Agent hereby appoints, authorizes and directs
each Lender and each Issuing Bank, and the Canadian Agent hereby appoints,
authorizes and directs each Canadian Lender and each Canadian Issuing Bank, to
act as collateral sub-agent for the Agent, the Lenders and the Issuing Banks and
the Canadian Agent, the Canadian Lenders and the Canadian Issuing Banks,
respectively, for purposes of the perfection of all security interests and Liens
with respect to Holdings', the Company's and the Company's Subsidiaries'
respective deposit accounts maintained with, and cash and Cash Equivalents held
by, such Lender or such Issuing Bank; (iv) manage, supervise and otherwise deal
with the Collateral; (v) take such action as is necessary or desirable to
maintain the perfection and priority of the security interests and Liens created
or purported to be created by the Loan Documents; and
(vi) except as may be otherwise specifically restricted by the terms hereof or
of any other Loan Document, exercise all remedies given to the Agent, the
Canadian Agent, the Lenders or the Issuing Banks with respect to the Collateral
under the Loan Documents relating thereto, applicable law or otherwise.
(c) Release of Collateral. (i) Each of the Agent, the Lenders and
the Issuing Banks hereby directs the Agent to release any Lien held by the Agent
for the benefit of the Agent, the Lenders, the Issuing Banks and the other
Holders and each of the Canadian Agent, the Canadian Lenders and the Canadian
Issuing Banks hereby directs the Canadian Agent to release any Lien held by the
Canadian Agent for the benefit of the Canadian Agent, the Canadian Lenders, the
Canadian Issuing Banks and the other Holders under the Canadian Facility:
(A) against all of the Collateral, upon final Payment In Full of the
Obligations and termination of the Revolving Credit Commitments; and
(B) against any part of the Collateral sold or disposed of by the
Company or any of its Subsidiaries, if such sale or disposition is
permitted by Section 3.05, 9.02 or 9.06 (or permitted pursuant to a waiver
or consent of a transaction otherwise prohibited by such Section) or, if
not pursuant to such sale or disposition, against any part of
-162-
the Collateral, if such release is consented to by Lenders whose aggregate
Pro Rata Shares under all Credit Facilities, in the aggregate, are equal
to 100%.
(ii) Each of the Lenders and the Issuing Banks hereby directs the
Agent, and each of the Canadian Lenders and Canadian the Issuing Banks hereby
directs the Canadian Agent, to execute and deliver or file such termination and
partial release statements and do such other things as are necessary to release
Liens to be released pursuant to this Section 12.09(c) promptly upon the
effectiveness of any such release.
(iii) Each of the Lenders and the Issuing Banks hereby direct the
Agent (and hereby agree on their own behalf) to take all actions reasonably
requested by the Company to give effect to the Permitted Receivables Financing
Program (after the satisfaction of any approval requirements hereunder with
respect thereto), including, without limitation, the release of the Lien on the
Receivables sold pursuant thereto (it being understood and agreed that the
proceeds of the initial sale thereunder shall constitute part of the
Collateral).
(d) Confirmation by Lenders. Without in any manner limiting the
Agent's or Canadian Agent's authority to act without any specific or further
authorization or consent by the applicable Lenders (as set forth in subsection
(c) above), each Lender agrees to confirm in writing, upon request by the
Company, the authority to release Collateral conferred upon the Agent under
clauses (A) and (B) of subsection (c)(i) above. Upon receipt by the Agent or the
Canadian Agent of any such written confirmation from the Lenders or the Canadian
Lenders, as applicable, of such Person's authority to release any particular
items or types of Collateral and upon at least five (5) Business Days' prior
written request by the Company or the Canadian Borrower, the Agent or the
Canadian Agent, as applicable, shall (and is hereby irrevocably authorized by
the applicable Lenders to) execute such documents as may be necessary to
evidence the release of the Liens upon such Collateral granted to the Agent for
the benefit of Agent, the Lenders, the Issuing Banks and the other Holders or to
the Canadian Agent for the benefit of the Canadian Agent, the Canadian Lenders
and the Issuing Banks and the other Holders under the Canadian Facility;
provided, however, that (i) neither the Agent nor the Canadian Agent shall be
required to execute any such document on terms which, in such Person's opinion,
would expose such Person to liability or create any obligation other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Liens upon
(or obligations of Holdings, the Company or any of the Company's Subsidiaries in
respect of) assets which continue to constitute Collateral, including, without
limitation, all reversionary rights of Holdings, the Company or any Subsidiary
of
-163-
the Company with respect to the released Collateral and the proceeds of any
sale, all of which shall continue to constitute part of the Collateral.
(e) No Obligation. The Agent and the Canadian Agent shall not have
any obligation whatsoever to any Lender or to any other Person to assure that
the Collateral exists or is owned by Holdings, the Company or any of the
Company's Subsidiaries or is cared for, protected or insured or has been
encumbered or that the Liens granted to the Agent and the Canadian Agent herein
or pursuant to the Loan Documents have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority, or to exercise at all or in any particular manner or under any duty of
care, disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Agent and the Canadian Agent
in this Section 12.09 or in any of the Loan Documents, it being understood and
agreed that in respect of the Collateral, or any act, omission or event related
thereto, the Agent and the Canadian Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Agent's or the Canadian Agent's
own interests in the Collateral as one of the Lenders and that the Agent and the
Canadian Agent shall not have any duty or liability whatsoever to any Lender,
any Issuing Bank or any other Holder.
ARTICLE XIII
MISCELLANEOUS
13.01. Assignments. (a) Assignments. No assignments or
participations of any Lender's rights or obligations hereunder shall be made
except in accordance with this Section 13.01. Each Lender may assign to one or
more Eligible Assignees all or a portion of its rights and obligations hereunder
(including all of its rights and obligations with respect to the Revolving Loans
and the Letters of Credit) in accordance with the provisions of this Section
13.01.
(b) Limitations on Assignments. Each assignment by a Lender shall be
subject to the following conditions: (i) each assignment (other than to a Lender
or an Affiliate of a Lender) shall be approved by the Agent and the Company,
which approval shall not be unreasonably withheld or delayed; (ii) each such
assignment shall be to an Eligible Assignee (and, if applicable in the case of
an assignment of a Lender's Multicurrency Commitment or Canadian Commitment,
such Eligible Assignee's Affiliates) and in the case of an assignment of a
Lender's Canadian Commitment or Multicurrency Commitment, the Agent shall be
satisfied with such assignee's (or its Affiliates') ability to fund in Canadian
Dollars or the Optional Currencies, as the case may be; (iii) each assignment of
a Lender's Revolving Credit
-164-
Commitment shall be an assignment of the assigning Lender's (and, where
applicable, its Affiliates') Revolving Credit Commitments in each Credit
Facility in which such Lender (and, if applicable, its Affiliates) then hold
Revolving Credit Commitments and shall be allocated to such Credit Facilities as
determined by such Lender (and, if applicable, its Affiliates) and consented to
by the Agent; (iv) each assignment shall be in an amount such that, after giving
effect to such assignment, the Eligible Assignee (and, if applicable, its
Affiliates) shall hold aggregate Revolving Credit Commitments in an amount at
least equal to $20,000,000 (provided, that after the inception of the Permitted
Receivables Financing Program such assignment shall at least equal $10,000,000
and provided, further, that more than one Lender (and, if applicable, its
Affiliates) may be the assigning Lender under any such assignment) except if the
Eligible Assignee is a Lender or an Affiliate of Lender or if such assignment
shall constitute all the assigning Lender's interest hereunder; and (iv) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance. Upon
such execution, delivery, acceptance and recording in the Register, from and
after the effective date specified in each Assignment and Accep tance and agreed
to by the Agent and the Company, (x) the assignee thereunder shall, in addition
to any rights and obligations hereunder held by it immediately prior to such
effective date, if any, have the rights and obligations hereunder that have been
assigned to it pursuant to such Assignment and Acceptance and shall, to the
fullest extent permitted by law, have the same rights and benefits hereunder as
if it were an original Lender hereunder and (y) the assigning Lender shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations hereunder (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of such assigning Lender's
rights and obligations hereunder, the assigning Lender shall cease to be a party
hereto).
(c) The Register. The Agent shall maintain at its address in effect
pursuant to Section 13.08 a copy of each Assignment and Acceptance delivered to
and accepted by it and a register (the "Register") for the recordation of the
names and addresses of the Lenders and the Revolving Credit Commitments of the
Lenders under each Credit Facility, the principal amount of the Loans under each
Credit Facility owing to each Lender from time to time and whether such Lender
is an original Lender or the assignee of another Lender pursuant to an
Assignment and Acceptance. The Register shall include an account for each
Lender, in which accounts (taken together) shall be recorded (i) the date and
amount of each Borrowing made hereunder, (ii) the effective date and amount of
each Assignment and Accept ance delivered to and accepted by it and the parties
thereto,
-165-
(iii) the amount of any principal or interest due and payable or to become due
and payable from each Borrower to each Lender hereunder or under the Notes, and
(iv) the amount of any sum received by the Agent from Holdings, the Company or
any Subsidiary Guarantor hereunder and each Lender's share thereof. The Agent
shall deliver a statement of such account to the Company whenever an Assignment
and Acceptance is accepted by it and the parties hereto and at such other times
as may be reasonably requested by the Company; provided, however, the Agent
shall not be obligated to deliver such statement more frequently than once a
month. Each such statement shall be deemed final, binding and conclusive upon
the Borrowers in all respects as to all matters reflected therein (absent
manifest error) unless the Company, within sixty (60) days after the end of any
Fiscal Year, delivers to the Agent written notice of any objections which the
Company may have to any such statement covering any time period during such
Fiscal Year. In that event, only those items expressly objected to in such
notice shall be deemed to be disputed by the Company. The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Company and each of its Subsidiaries, the Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes hereof. The Register shall be available for
inspection by the Company or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(d) Fee. Upon its receipt of an Assignment and Acceptance executed
by the assigning Lender and an Eligible Assignee and (unless waived by the
Agent) a processing and recordation fee of $5,000 (payable by the assigning
Lender or the assignee, as shall be agreed between them), the Agent shall, if
such Assignment and Acceptance has been completed and is in compliance herewith
and in substantially the form of Exhibit A hereto, (i) accept such Assignment
and Acceptance (together with the Company), (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Company and the other Lenders.
(e) Information Regarding the Company. Any Lender may, in connection
with any assignment or proposed assignment pursuant to this Section 13.01,
disclose to the assignee or proposed assignee any information relating to
Holdings, the Company or any of the Company's Subsidiaries furnished to such
Lender by the Agent or by or on behalf of Holdings or the Company; provided
that, prior to any such disclosure, such assignee or proposed assignee shall
agree (for the Company's benefit) to preserve in accordance with Section 13.20
the confidentiality of any confidential information described therein.
(f) Lenders' Creation of Security Interests.
-166-
Notwithstanding any other provision set forth herein, any Lender may at any time
create a security interest in all or any portion of its rights hereunder
(including, without limitation, Obligations owing to it and Notes held by it) in
favor of any Federal Reserve bank in accordance with Regulation A; provided,
however, such assignment shall not release such assigning Lender from any of its
obligations hereunder.
(g) Assignments by an Issuing Bank. If any Issuing Bank (or its
Affiliate) ceases to be a Lender hereunder by virtue of any assignment made
pursuant to this Section 13.01 and another Issuing Bank is obligated to Issue
Letters of Credit or will become so obligated after such assignment becomes
effective, then, as of the effective date of such cessation, such Issuing Bank's
obligations to Issue Letters of Credit pursuant to Section 2.02 shall terminate
and such Issuing Bank shall be an Issuing Bank hereunder only with respect to
outstanding Letters of Credit Issued prior to such date.
(h) Participations. Each Lender may sell participations to one or
more other financial institutions in or to all or a portion of its rights and
obligations under and in respect of any and all facilities hereunder (including,
without limitation, all or a portion of any or all of its Revolving Credit
Commitments hereunder and the Loans owing to it and its undivided interest in
the Letters of Credit); provided, however, that (i) such Lender's obligations
hereunder (including, without limitation, its Revolving Credit Commitments
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) Holdings, the Borrowers, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations hereunder and (iv) such participant's rights to agree or
to restrict such Lender's ability to agree to the modification, waiver or
release of any of the terms of the Loan Documents or to the release of any
Collateral covered by the Loan Documents, to consent to any action or failure to
act by any party to any of the Loan Documents or any of their respective
Subsidiaries or Affiliates, or to exercise or refrain from exercising any powers
or rights which any Lender may have under or in respect of the Loan Documents or
any Collateral, shall be limited to the right to consent to (A) reduction of the
principal of, or rate or amount of interest on the Loans(s) subject to such
participation (other than by the payment or prepayment thereof), (B)
postponement of any scheduled date for any payment of principal of, or interest
on, the Loan(s) subject to such participation (except with respect to any
modifications of the applicable provisions relating to the prepayments of Loans
and other Obligations) and (C) release of any guarantor of the Obligations or
all or any substantial portion of the Collateral except for any such release
provided in Section 12.09(c). No
-167-
holder of a participation in all or any part of the Loans shall be a "Lender" or
a "Holder" for any purposes hereunder by reason of such participation; provided,
however, that each holder of a participation shall have the rights and
obligations of a Lender (including any right to receive payment) under Sections
3.03, 3.04, 4.01(f), 4.02(d), 4.02(f), 12.05, 13.02 and 13.05; provided,
however, that all requests for any payments pursuant to such Sections shall be
made by a participant through the Lender granting such participation. The right
of each holder of a participation to receive payment under Sections 3.03, 3.04,
4.01(f), 4.02(d), 4.02(f), 12.05, 13.02 and 13.05 shall be limited to the lesser
of (i) the amounts actually incurred by such holder for which payment is
provided under said Sections and (ii) the amounts that would have been payable
under said Sections by the Borrowers to the Lender granting the participation in
respect of the participated interest to such holder had such participation not
been granted. The Lender shall promptly notify the Agent of the identity of any
holder of a participation.
(i) Payment to Participants. Anything herein to the contrary
notwithstanding, in the case of any participation, all amounts payable by the
Borrowers under the Loan Documents shall be calculated and made in the manner
and to the parties required hereby as if no such participation had been sold.
-168-
13.02. Expenses.
(a) Generally. The Borrowers (other than the Canadian Borrower,
which so agrees to pay or reimburse the Canadian Agent with respect to the
Canadian Facility) jointly and severally agree upon demand to pay, or reimburse
the Agent for, all of the Agent's reasonable internal and external audit, legal,
appraisal, valuation, filing, document duplication and reproduction and
investigation expenses and for all other reasonable out-of-pocket costs and
expenses of every type and nature (including, without limitation, the reasonable
fees, expenses and disbursements of the Agent's counsel, Sidley & Austin, local
legal counsel, auditors, accountants, appraisers, printers, insurance and
environmental advisers, and other consultants and agents), incurred by the Agent
in connection with (A) the Agent's audit and investigation of the Company and
the Company's Subsidiaries in connection with the preparation, negotiation, and
execution of the Loan Documents and the Agent's periodic audits of the Company
or the Company's Subsidiaries; (B) the preparation, negotiation, execution and
interpretation hereof (including, without limitation, the satisfaction or
attempted satisfaction of any of the conditions set forth in Article V), the
other Loan Documents and any proposal letter or commitment letter issued in
connection therewith and the making of the Loans hereunder; (C) the cre ation,
perfection or protection of the Liens under the Loan Documents (including,
without limitation, any reasonable fees and expenses for local counsel in
various jurisdictions); (D) the ongoing administration hereof and of the Loans,
including consultation with attorneys in connection therewith and with respect
to the Agent's rights and responsibilities hereunder and under the other Loan
Documents; (E) the protection, collection or enforcement of any of the
Obligations or the enforcement of any of the Loan Documents; (F) the
commencement, defense or intervention in any court proceeding relating in any
way to the Obligations, the Property, Holdings, the Company, any of the
Company's Subsidiaries, this Agreement or any of the other Loan Documents; (G)
the response to, and preparation for, any subpoena or request for document
production with which the Agent is served or deposition or other proceeding in
which the Agent is called to testify, in each case, relating in any way to the
Obligations, the Property, Holdings, the Company, any of the Company's
Subsidiaries, this Agreement or any of the other Loan Documents; and (H) any
amendments, consents, waivers, assignments, restatements, or supplements to any
of the Loan Documents and the preparation, negotiation, and execution of the
same.
(b) After Default. The Borrowers (other than the Canadian Borrower,
which so agrees to pay or reimburse the Canadian Agent, the Canadian Lenders and
the Canadian Issuing Banks with respect to the Canadian Facility) further
jointly and severally agree to pay or reimburse the Agent, the Issuing Banks
-169-
and the Lenders, within five (5) Business Days after such Person's informing
such Borrower(s) thereof in writing accompanied by a copy of a related invoice
or similar statement in reasonable detail and reasonably detailed supporting
information with respect thereto, for all reasonable out-of-pocket costs and
expenses, including, without limitation, reasonable attorneys' fees, incurred by
the Agent, any Issuing Bank or any Lender (i) in enforcing any Loan Document or
Obligation or any security therefor or exercising or enforcing any other right
or remedy available by reason of any Event of Default; (ii) in connection with
any refinancing or restructuring of the credit arrangements provided hereunder
in the nature of a "work-out" or in any insolvency or bankruptcy proceeding;
(iii) in commencing, defending or intervening in any litigation or in filing a
petition, complaint, answer, motion or other pleadings in any legal proceeding
relating to the Obligations, the Property, Holdings, the Company or any of the
Company's Subsidiaries and related to or arising out of the transactions
contemplated hereby or by any of the other Loan Documents; and (iv) in taking
any other action in or with respect to any suit or proceeding (bankruptcy or
otherwise) described in clauses (i) through (iii) above.
13.03. Indemnity. (a) The Borrowers (other than the Canadian
Borrower) further jointly and severally agree to defend, protect, indemnify, and
hold harmless the Agent and each and all of the Lenders and Issuing Banks and
each of their respective Affiliates, and each of such Agent's, Lender's, Issuing
Bank's or Affiliate's respective officers, directors, employees, attorneys and
agents (including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article V) (collectively, the "Indemnitees") and (b) the Canadian Borrower
further agrees to defend, protect, indemnify, and hold harmless the Canadian
Agent and each and all of the Canadian Lenders and Canadian Issuing Banks and
each of their respective Canadian Affiliates, and each of such Canadian Agent's,
Canadian Lender's, Canadian Issuing Bank's or Affiliate's respective officers,
directors, employees, attorneys and agents (including, without limitation, those
retained in connection with the satisfaction or attempted satisfaction of any of
the conditions set forth in Article V) (collectively, the "Canadian
Indemnitees"), in each case from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
with out limitation, the reasonable fees and disbursements of counsel for such
Indemnitees or Canadian Indemnitees, as applicable, in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees or Canadian Indemnitees, as applicable, shall be designated a party
thereto), imposed on, incurred by, or asserted against such Indemnitees or
Canadian Indemnitees, as applicable, in any manner relating to or
-170-
arising out of or in connection with (a) this Agreement, the other Loan
Documents, any of the other Transaction Documents or any act, event or
transaction related or attendant thereto, whether or not any such Indemnitee or
Canadian Indemnitee is a party thereto and whether or not such transactions are
consummated, the making of the Loans, the issuance of and participation in
Letters of Credit hereunder, the management of such Loans or Letters of Credit,
the use or intended use of the proceeds of the Loans or Letters of Credit
hereunder, the execution, delivery and/or performance of Currency Agreements or
Interest Rate Contracts, or any of the other transactions contemplated by the
Transaction Documents, or (b) any Liabilities and Costs under Environmental,
Health or Safety Requirements of Law arising from or in connection with the
past, present or future operations of Holdings, the Company, the Company's
Subsidiaries or any of their respective predecessors in interest, or, the past,
present or future environmental, health or safety condition of any respective
Property of Holdings, the Company or the Company's Subsidiaries, the presence of
asbestos-containing materials or suspected asbestos-containing materials at any
respective Property of Holdings, the Company or such Subsidiaries or the Release
or threatened Release of any Contaminant into the environment (collectively, the
"Indemnified Matters"); provided, however, the Borrowers shall have no
obligation to an Indemnitee or a Canadian Indemnitee, as applicable, hereunder
with respect to Indemnified Matters resulting from the willful misconduct or
gross negligence of such Indemnitee or Canadian Indemnitee, as applicable, as
determined in a judgment by a court of competent jurisdiction. To the extent
that the undertaking to indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, each applicable Borrower shall contribute the maximum portion
which it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all Indemnified Matters incurred by the Indemnitees or the
Canadian Indemnitees, as applicable.
13.04. Change in Accounting Principles. If any change in the
accounting principles used in the preparation of the most recent financial
statements referred to in the definition of "GAAP" contained in Section 1.01 is
hereafter required or permitted by the rules, regulations, pronouncements and
opinions of the Financial Accounting Standards Board or the American Institute
of Certified Public Accountants (or successors thereto or agencies with similar
functions) and are adopted by the Company with the agreement of its independent
certified public accountants and such change results in a change in the method
of calculation of any of the covenants, standards or terms found in Article IX
and Article X, the parties hereto agree to enter into negotiations in order to
amend such provisions so as to equitably reflect such change with the desired
result that the criteria for evaluating compliance with such covenants,
standards and terms by
-171-
the Company shall be the same after such change as if such change had not been
made; provided, however, no change in GAAP that would affect the method of
calculation of any of the covenants, standards or terms shall be given effect in
such calculations until such provisions are amended, in a manner satisfactory to
the Requisite Lenders and the Company, so to reflect such change in accounting
principles.
13.05. Setoff. In addition to any Liens granted under the Loan
Documents and any rights now or hereafter granted under applicable law, upon the
occurrence and during the continuance of any Event of Default, each Lender, each
Issuing Bank and any Affiliate of any Lender or Issuing Bank is hereby
authorized by each Borrower at any time or from time to time, without notice to
any Person (any such notice being hereby expressly waived) to combine accounts
or to set off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured (but not including trust accounts)) and
any other Indebtedness at any time held or owing by such Lender, Issuing Bank or
any of their Affiliates to or for the credit or the account of such Borrower
against and on account of the Obligations of any Borrowers to such Lender,
Issuing Bank or any of their Affiliates, including, but not limited to, all
Loans and Letters of Credit and all claims of any nature or description arising
out of or in connection herewith, irrespective of whether or not (i) such Lender
or Issuing Bank shall have made any demand hereunder or (ii) the Agent, at the
request or with the consent of the Requisite Lenders, shall have declared the
principal of and interest on the Loans and other amounts due hereunder to be due
and payable as permitted by Article XI and even though such Obligations may be
contingent or unmatured. Each Lender shall give the Company notice of any action
taken pursuant to this Section 13.05 promptly upon the occurrence thereof
provided that any failure to do so shall not limit any right of a Lender to take
such action.
13.06. Ratable Sharing. The Lenders and the Issuing Banks agree
among themselves that, except as otherwise expressly provided in any Loan
Document, (i) with respect to all amounts received by a U.S. Lender or a U.S.
Issuing Bank, a Multicurrency Lender, a Canadian Lender or a Canadian Issuing
Bank, as the case may be, which are applicable to the payment of the Obligations
(excluding (x) the fees described in Sections 2.02(g), 3.03, 3.04, 4.01(f) and
4.02 and (y) and amounts so received in respect of Currency Agreements and/or
Interest Rate Contracts) equitable adjustment shall be made so that, in effect,
all such amounts shall be shared among them ratably in accordance with their Pro
Rata Shares, whether received by voluntary payment, by the exercise of the right
of setoff or banker's lien, by counterclaim or cross-action or by the
enforcement of any or all of such Obligations (excluding (x) the fees described
in Sections
-172-
2.02(g), 3.03, 3.04, 4.01(f) and 4.02 and (y) and amounts so received in respect
of Currency Agreements and/or Interest Rate Contracts) or the Collateral, (ii)
if any of them shall by voluntary payment or by the exercise of any right of
counterclaim, setoff, banker's lien or otherwise, receive payment of a
proportion of the aggregate amount of such Obligations held by it which is
greater than the amount which such Lender is entitled to receive hereunder, the
Lender receiving such excess payment shall purchase, without recourse or
warranty, an undivided interest and participation (which it shall be deemed to
have done simultaneously upon the receipt of such payment) in such Obligations
owed to the others so that all such recoveries with respect to such Obligations
shall be applied ratably in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be rescinded and
the purchase prices paid for such participation shall be returned to such party
to the extent necessary to adjust for such recovery, but without interest except
to the extent the purchasing party is required to pay interest in connection
with such recovery. Each Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 13.06 may, to the
fullest extent permitted by law, exercise all its rights of payment (including,
subject to Section 13.05, the right of setoff) with respect to such
participation as fully as if such Lender were the direct creditor of such
Borrower in the amount of such participation. The Agent, the Canadian Agent, the
Lenders and the Issuing Banks further agree and acknowledge that in no event
shall proceeds of the Collateral of the Canadian Borrower, more than sixty-five
percent (65%) of the Capital Stock of the Canadian Borrower or Pegasus Asia or
amounts received from the Canadian Borrower as described herein be shared with
any Lender or Issuing Bank for application on any of the Obligations other than
the Obligations of the Canadian Borrower.
13.07. Amendments and Waivers. (a) General Provisions. Unless
otherwise provided herein, no amendment or modification of any provision hereof
shall be effective without the written agreement of the Requisite Lenders and
the Company, and no termination or waiver of any provision hereof, or consent to
any departure by the Borrowers therefrom, shall be effective without the written
concurrence of the Requisite Lenders, which the Requisite Lenders shall have the
right to grant or withhold in their sole discretion.
(b) Amendments, Consents and Waivers by all Lenders. Notwithstanding
the foregoing, any amendment, modification, termination, waiver or consent with
respect to any of the following provisions hereof shall be effective only by a
written agreement, signed by the Company and each Lender:
(i) waiver of any of the conditions specified in
-173-
Section 5.01 or 5.02 (except with respect to a condition based upon
another provision hereof, the waiver of which requires only the
concurrence of the Requisite Lenders),
(ii) increase in the amount of any of the Revolving Credit
Commitments of any Lender or any increase in the amount, or other
modification to the terms or components, of the Domestic Borrowing Base or
the Canadian Borrowing Base, (except with respect to (A) modifications
which may be made by the Agent in accordance with the definitions of
Canadian Borrowing Base and Domestic Borrowing Base or (B) the
reallocation of the Revolving Credit Commitments under Section 3.01(c)),
(iii) reduction of the principal of, rate or amount of interest on
the Loans or Reimbursement Obligations or any fees payable to any Lender,
(iv) except as provided in Section 11.02(c), extension of the
Revolving Credit Termination Date or postponement of any date on which any
payment of principal of, or interest on, the Loans or Reimbursement
Obligations or any fees payable to any Lender or Issuing Bank would
otherwise be due,
(v) release of any guarantor of the Obligations (except in
connection with the sale of all or substantially all of the Capital Stock
or Property of such guarantor or a merger of such guarantor into another
guarantor or into the Company, in each case approved by the Requisite
Lenders or otherwise permitted hereunder) or all or any portion of the
Collateral (except as provided in Section 12.09(c)),
(vi) change in the definition of Requisite Lenders, or
(vii) amendment of Sections 12.09(c), 13.02, 13.06 or this Section
13.07.
The Agent may, but shall have no obligation to, with the written
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on any Borrower in any case shall entitle such Borrower to
any other or further notice or demand in similar or other circumstances.
Notwithstanding anything to the contrary contained in this Section 13.07, no
amendment, modification, waiver or consent shall affect the rights or duties of
the Agent hereunder or under the other Loan Documents, including this Article
XIII, unless made in writing and signed by the Agent so affected in addition to
the Lenders required above to take such action. Notwithstanding anything herein
to the contrary, in the
-174-
event that a Borrower shall have requested, in writing, that any Lender agree to
an amendment, modification, waiver or consent with respect to any particular
provision or provisions hereof, and such Lender shall have failed to state, in
writing, that it either agrees or disagrees (in full or in part) with all such
requests (it being understood that any such statement of agree ment may be
subject to satisfactory documentation and other conditions specified in such
statement) within thirty (30) days of receipt of such request by such Lender,
then such Lender hereby irrevocably authorizes the Agent to agree or disagree,
in full or in part, and in the Agent's sole discretion, to such requests on
behalf of such Lender as such Lender's attorney-in-fact and to execute and
deliver any writing evidencing such agreement which has been delivered to such
Lender in connection with such request and approved by the Agent as such
Lender's duly authorized agent for such purposes. Furthermore, in the event that
any Lender fails to agree to any amendment, modification, waiver or consent
requiring the unanimous approval of the Lenders pursuant to Section 13.07(b), at
the joint request of any Borrower and the Agent, the Lenders who have so agreed
to such amendment, modification, waiver or consent shall have the right (but not
the obligation) to, or to cause an Eligible Assignee to, purchase from such
Lender (at the face amount thereof) all Revolving Loans, Letter of Credit
Obligations and Revolving Credit Commitments held by such Lender.
13.08. Notices. (a) Unless otherwise specifically provided herein,
any notice, consent or other communication herein required or permitted to be
given shall be in writing and may be personally served, telecopied, or sent by
courier service or the United States mails (or with respect to the Canadian
Borrower, the Canadian Agent, the Canadian Lenders and the Canadian Issuing
Banks, the Canadian mails) and shall be deemed to have been given (i) ten (10)
days following deposit in the United States mails (or with respect to the
Canadian Borrower, the Canadian Agent, the Canadian Lenders and the Canadian
Issuing Banks, the Canadian mails), with proper postage prepaid, (ii) upon
delivery thereof to a reputable overnight courier service, with delivery charges
prepaid, (iii) when delivered in person or (iv) upon confirmation of receipt of
a telecopy. Notices to the Agent or the Canadian Agent pursuant to Article II,
III or IV shall not be effective until received by the Agent. For the purposes
hereof, the addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this Section 13.08) shall be as set forth below each
party's name on the signature pages hereof or the signature page of any
applicable Assignment and Acceptance, or, as to each party, at such other
address as may be designated by such party in a written notice to all of the
other parties hereto.
(b) The Borrowers (other than the Canadian Borrower, which so agrees
to indemnify and hold harmless the Canadian
-175-
Indemnitees) jointly and severally agree to indemnify and hold harmless each
Indemnitee from and against any and all claims, damages, liabilities,
obligations, losses, penalties, actions, judgments, suits, costs, disbursements
and expenses of any kind or nature (including, without limitation, reasonable
fees and disbursements of counsel to any such Indemnitee) which may be imposed
on, incurred by or asserted against any such Indemnitee or Canadian Indemnitee,
as applicable, in any manner relating to or arising out of any action taken or
omitted by such Indemnitee or Canadian Indemnitee, as applicable, in good faith
in reliance on any notice or other written communication in the form of a
telecopy or facsimile purporting to be from a Borrower or Holdings; provided
that no Borrower shall have any obligation under this Section 13.08(b) to an
Indemnitee or Canadian Indemnitee, as applicable, with respect to any
indemnified matter caused by or resulting from the gross negligence or willful
misconduct of that Indemnitee or Canadian Indemnitee, as applicable, as
determined by a court of competent jurisdiction.
13.09. Survival of Warranties and Agreements. All representations
and warranties made herein and all obligations of the Borrowers and Holdings in
respect of taxes, indemnification and expense reimbursement shall survive the
execution and delivery hereof and of the other Loan Documents, the making and
repayment of the Loans, the issuance and discharge of Letters of Credit
hereunder and the termination of the Commitments hereunder and shall not be
limited in any way by the passage of time or occurrence of any event and shall
expressly cover time periods when the Agent, any of the Issuing Banks or any of
the Lenders may have come into possession or control of any of Holdings',the
Company's or the Company's Subsidiaries' Property.
13.10. Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of the Agent, any Lender or any Issuing Bank in the
exercise of any power, right or privilege under any of the Loan Documents shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privi lege. All rights and remedies existing under the
Loan Documents are cumulative to and not exclusive of any rights or remedies
otherwise available.
13.11. Marshalling; Payments Set Aside. None of the Agent, any
Lender or any Issuing Bank shall be under any obliga tion to xxxxxxxx any assets
in favor of the Borrowers or any other party or against or in payment of any or
all of the Obliga tions. To the extent that a Borrower makes a payment or
payments to the Agent, the Lenders or the Issuing Banks or any of such Persons
receives payment from the proceeds of the Collateral or exercise their rights of
setoff, and such payment or payments or
-176-
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party, then to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, right and remedies therefor, shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.
13.12. Severability. In case any provision in or obligation
hereunder or under the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
13.13. Headings. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof or be given
any substantive effect.
13.14. Governing Law. THIS AGREEMENT SHALL BE INTERPRETED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE
LAW OF THE STATE OF NEW YORK.
13.15. Intercreditor Agreement. Each Lender and each Issuing Bank,
by executing this Agreement or the Assignment and Acceptance by which such
Person became a Lender or an Issuing Bank, and each Holder, by accepting the
benefits of the Loan Documents, hereby (a) consents to the terms of the
Intercreditor Agreement, (b) agrees to be bound by the terms thereof and (c)
directs the Agent, acting on behalf of the Agent, the Lenders, the Issuing Banks
and the Holders, to execute and deliver the Intercreditor Agreement.
13.16. Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of the parties
hereto and the successors and permitted assigns of the Lenders and the Issuing
Banks. The rights hereunder and the interest herein of the Borrowers may not be
assigned without the written consent of all Lenders. Any attempted assignment
without such written consent shall be void.
-177-
13.17. Certain Consents and Waivers.
(a) Personal Jurisdiction. (i) EACH OF THE AGENT, THE LENDERS, THE
ISSUING BANKS, HOLDINGS AND THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND ANY
COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY
ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF HOLDINGS AND THE
BORROWERS IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION SYSTEM AT 0000
XXXXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS PROCESS AGENT (THE "PROCESS AGENT")
FOR SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH
SERVICE BEING HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. EACH OF THE AGENT, THE LENDERS, THE ISSUING BANKS, HOLDINGS AND THE
BORROWERS AGREES THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH OF HOLDINGS
AND THE BORROWERS WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(ii) EACH OF HOLDINGS AND THE BORROWERS AGREES THAT THE AGENT SHALL
HAVE THE RIGHT TO PROCEED AGAINST SUCH PERSON OR ITS PROPERTY IN A COURT IN ANY
LOCATION TO ENABLE THE AGENT, THE ISSUING BANKS AND THE LENDERS TO REALIZE ON
THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE AGENT, ANY ISSUING BANK OR
ANY LENDER. EACH OF HOLDINGS AND THE BORROWERS WAIVES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT, ANY ISSUING BANK OR ANY
LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
(b) Service of Process. EACH OF HOLDINGS AND THE BORROWERS
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PROCESS AGENT OR THE
RELEVANT BORROWER'S AND/OR HOLDINGS' NOTICE ADDRESS SPECIFIED PURSUANT TO
SECTION 13.08, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH
MAILING. EACH OF HOLDINGS AND THE BORROWERS IRREVOCABLY WAIVES ANY OBJECTION
(INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON
-178-
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF
THE AGENT TO BRING PROCEEDINGS AGAINST HOLDINGS AND/OR ANY BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION.
(c) Waiver of Jury Trial. EACH OF THE AGENT, THE CANADIAN AGENT, THE
ISSUING BANKS, THE LENDERS, HOLDINGS AND THE BORROWERS WAIVES ANY RIGHT TO TRIAL
BY JURY IN ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG
ANY OF THE AGENT, THE CANADIAN AGENT, THE ISSUING BANKS, HOLDINGS OR THE
BORROWERS ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY
AGREEMENT OR ANY OTHER LOAN DOCUMENT. ANY SUCH PERSON MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
13.18. Counterparts; Effectiveness; Inconsistencies. This Agreement
and any amendments, waivers, consents, or supple ments hereto may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement shall become effective against Holdings, the
Borrowers, each Lender, each Issuing Bank and the Agent on the date hereof. This
Agreement and each of the other Loan Documents shall be construed to the extent
reasonable to be consistent one with the other, but to the extent that the terms
and conditions hereof are actually inconsistent with the terms and conditions of
any other Loan Document, this Agreement shall govern.
13.19. Limitation on Agreements. All agreements between the
Borrowers, the Agent, each Lender and each Issuing Bank in the Loan Documents
are hereby expressly limited so that in no event shall any of the Loans or other
amounts payable by the Borrower under any of the Loan Documents be directly or
indirectly secured (within the meaning of Regulation U) by Margin Stock.
13.20. Confidentiality. Subject to Section 13.01(e), the Agent, the
Lenders and the Issuing Banks shall hold all nonpublic information obtained
pursuant to the requirements hereof and identified as such by the Company in
accordance with safe and sound banking practices and in any event may make
disclosure reasonably required by a bona fide offeree or assignee (or
participant) in connection with the contemplated transfer (or participation), or
as required or requested by any Governmental Authority or representative
thereof, or pursuant to legal process, or to its accountants, lawyers and other
advisors who shall be informed of the confidential nature of such information,
-179-
and shall require any such offeree or assignee (or participant) to agree (and
require any of its offerees, assignees or participants to agree) to comply with
this Section 13.20. In no event shall the Agent, any Lender or any Issuing Bank
be obligated or required to return any materials furnished by the Company;
provided, however, each offeree shall be required to agree that if it does not
become an assignee (or participant) it shall return all materials furnished to
it by the Company in connection herewith. In the event the Agent or any Lender
or Issuing Bank is requested or required by law to disclose any of such
information, the Agent or such Lender or Issuing Bank agrees to will provide the
Company with prompt notice thereof; provided, however, the Agent or such Lender
or Issuing Bank may, without restriction hereunder, including the providing of
such notice, provide any and all of such information to any of the agencies or
other governmental entities which regularly regulate its ability to engage in
any of its businesses under state or federal law.
13.21. Judgment Currency. (a) If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due hereunder or under
the Notes in any currency to another currency the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be the Spot Rate on the 2nd Business Day preceding that on which judgment
is given.
(b) The obligation of any Borrower in respect of any sum due in the
original currency from it to any Lender or the Agent hereunder or under any Note
held by such Lender shall, notwithstanding any judgment in any other currency,
be discharged only to the extent that on the Business Day following receipt by
such Lender or the Agent (as the case may be) of any sum adjudged to be so due
in such other currency such Lender or the Agent (as the case may be) may in
accordance with normal banking procedures purchase the original currency with
such other currency; if the amount of the original currency so purchased is less
than the sum originally due to such Lender or the Agent (as the case may be) in
the original currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or the Agent (as the
case may be) against such loss, and if the amount of the original currency so
purchased exceeds the sum originally due to any Lender or the Agent (as the case
may be) in the original currency, such Lender or the Agent (as the case may be)
agrees to remit to such Borrower such excess.
13.22. Entire Agreement. This Agreement, taken together with all of
the other Loan Documents embodies the entire agreement and understanding among
the parties hereto and supersedes the Letter Agreement (except for provisions
therein specifically referred to herein) and all prior agreements and
understandings, written and oral, relating to the subject matter hereof.
-180-
-181-
-182-
IN WITNESS WHEREOF, this Agreement has been duly exe cuted as of the
date first above written.
X. XXXXXXXXXX & CO., INC.
By:________________________________
Name:
Title:
Notice Address:
X. Xxxxxxxxxx & Co., Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Chief Financial Officer
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
PEGASUS POLYMERS INTERNATIONAL INC.
By:________________________________
Name:
Title:
Notice Address:
c/o X. Xxxxxxxxxx & Co., Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Chief Financial Officer
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
-S-1-
XXXXXXXXXX INTERNATIONAL, LTD.
By:________________________________
Name:
Title:
Notice Address:
c/o X. Xxxxxxxxxx & Co., Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Chief Financial Officer
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
X. XXXXXXXXXX & CO. (CANADA) LIMITED
By:________________________________
Name:
Title:
Notice Address:
c/o X. Xxxxxxxxxx & Co., Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Chief Financial Officer
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
XXXXXXXXXX HOLDING CORPORATION
By:________________________________
Name:
Title:
Notice Address:
c/o X. Xxxxxxxxxx & Co., Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Chief Financial Officer
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
-S-2-
CITICORP USA, INC., as Agent and U.S.
Lender
By:________________________________
Name:
Title:
Notice Address, Domestic
and Fixed Rate Lending Offices:
Citicorp USA, Inc.
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
CITIBANK, N.A., as Multicurrency Lender
and Issuing Bank
By:________________________________
Name:
Title:
Notice Address:
c/o Citicorp USA, Inc.
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Fixed Rate Lending Office:
Citibank, N.A.
Structured Finance Department
0xx Xxxxx
Xxxxxxx Xxxxxx
Xxxx Xxxx
Xxxxxx XX0 0XX Xxxxxxx
Attention: Xxxxxxx Xxxxx/Xxxx Xxxxxx
Telecopier No.: 011-441-71-234-2398
Confirmation No.: 011-441-71-234-2391 or
-2392
-S-3-
CITIBANK CANADA, as Canadian Agent,
Canadian Lender and Canadian Issuing
Bank
By:________________________________
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
Corporate Finance
Notice Address and
Canadian Lending Office:
Citibank Canada
000 Xxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Attention: Vice President
Corporate Finance
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
-S-4-
NATIONSBANK, N.A., as U.S. Lender and
Multicurrency Lender
By:________________________________
Name:
Title:
Notice Address:
NationsBank, N.A.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: ________________________
Telecopier No.: (410) ___________
Confirmation No.: (410) ___________
Domestic Lending Office:
___________________________________
___________________________________
___________________________________
Attention: _______________________
Telecopier No.: _________________
Confirmation No.: _________________
Fixed Rate Lending Office:
___________________________________
___________________________________
___________________________________
Attention: _______________________
Telecopier No.: _________________
Confirmation No.: _________________
-S-5-
XXXXXX FINANCIAL, INC., as U.S. Lender
By:________________________________
Name: Xxxx Xxxxxxxxx
Title: Vice President
Notice Address:
Xxxxxx Financial, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
Assistant Vice President
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Domestic Lending Office:
Xxxxxx Financial, Inc.
Loan Administration
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Assistant Vice President
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
-S-6-
