EXHIBIT 10.2
SHORT-TERM CREDIT AGREEMENT
DATED AS OF JUNE 30, 1998,
AMONG
ANICOM, INC.,
THE LENDERS
PARTY HERETO,
AND
XXXXXX TRUST AND SAVINGS BANK,
INDIVIDUALLY AND AS AGENT
TABLE OF CONTENTS
SECTION DESCRIPTION
SECTION 1. THE REVOLVING CREDITS
Section 1.1. The Revolving Credit
Section 1.2. The Revolving Credit Notes
Section 1.3. Manner and Disbursement of Loans
Section 1.4. Extensions of the Revolving Commitments
SECTION 2. INTEREST AND CHANGE IN CIRCUMSTANCES
Section 2.1. Interest Rate Options
Section 2.2. Minimum LIBOR Portion Amounts
Section 2.3. Computation of Interest
Section 2.4. Manner of Rate Selection
Section 2.5. Change of Law
Section 2.6. Unavailability of Deposits or Inability to
Ascertain Adjusted LIBOR
Section 2.7. Taxes and Increased Costs
Section 2.8. Change in Capital Adequacy Requirements
Section 2.9. Funding Indemnity
Section 2.10. Lending Branch
Section 2.11. Discretion of Lenders as to Manner of Funding
SECTION 3. FEES, PREPAYMENTS AND TERMINATIONS
Section 3.1. Fees
Section 3.2. Voluntary Prepayments
Section 3.3. Terminations
Section 3.4. Place and Application of Payments
Section 3.5. Notations
SECTION 4. GUARANTIES
Section 4.1. Subsidiary Guaranties
SECTION 5. DEFINITIONS; INTERPRETATION
Section 5.1. Definitions
Section 5.2. Interpretation
SECTION 6. REPRESENTATIONS AND WARRANTIES
Section 6.1. Organization and Qualification
Section 6.2. Subsidiaries
Section 6.3. Corporate Authority and Validity of Obligations
Section 6.4. Use of Proceeds; Margin Stock
Section 6.5. Financial Reports
Section 6.6. No Material Adverse Change
Section 6.7. Full Disclosure
Section 6.8. Good Title
Section 6.9. Litigation and Other Controversies
Section 6.10. Taxes
Section 6.11. Approvals
Section 6.12. Affiliate Transactions
Section 6.13. Investment Company; Public Utility Holding Company
Section 6.14. ERISA
Section 6.15. Compliance with Laws
Section 6.16. Other Agreements
Section 6.17. No Default
Section 6.18. Year 2000 Compliance
SECTION 7. CONDITIONS PRECEDENT
Section 7.1. All Advances
Section 7.2. Initial Advance
Section 7.3. Termination of Existing Credit Agreement
Section 7.4. July 15 as Earliest Date
SECTION 8. COVENANTS
Section 8.1. Corporate Existence; Subsidiaries
Section 8.2. Maintenance of Properties
Section 8.3. Taxes and Assessments
Section 8.4. Insurance
Section 8.5. Financial Reports
Section 8.6. Current Ratio
Section 8.7. Interest Coverage Ratio
Section 8.8. Tangible Net Worth
Section 8.9. Debt to Earnings Ratio
Section 8.10. Leverage Ratio
Section 8.11. Indebtedness for Borrowed Money
Section 8.12. Liens
Section 8.13. Investments, Loans, Advances and Guaranties
Section 8.14. Acquisitions
Section 8.15. Sales and Leasebacks
Section 8.16. Dividends and Certain Other Restricted Payments
Section 8.17. Mergers, Consolidations and Sales
Section 8.18. ERISA
Section 8.19. Compliance with Laws
Section 8.20. Burdensome Contracts With Affiliates
Section 8.21. No Changes in Fiscal Year
Section 8.22. Inspection and Field Audit
Section 8.23. Formation of Subsidiaries
Section 8.24. Subordinated Indebtedness
Section 8.25. Use of Proceeds
SECTION 9. EVENTS OF DEFAULT AND REMEDIES
Section 9.1. Events of Default
Section 9.2. Non-Bankruptcy Defaults
Section 9.3. Bankruptcy Defaults
SECTION 10. THE AGENT
Section 10.1. Appointment and Authorization
Section 10.2. Rights as a Lender
Section 10.3. Standard of Care
Section 10.4. Costs and Expenses
Section 10.5. Indemnity
SECTION 11. MISCELLANEOUS
Section 11.1. Withholding Taxes
Section 11.2. Non-Business Days
Section 11.3. No Waiver, Cumulative Remedies
Section 11.4. Waivers, Modifications and Amendments
Section 11.5. Costs and Expenses
Section 11.6. Documentary Taxes
Section 11.7. Survival of Representations
Section 11.8. Survival of Indemnities
Section 11.9. Participations
Section 11.10. Assignment Agreements
Section 11.11. Notices
Section 11.12. Construction
Section 11.13. Headings
Section 11.14. Severability of Provisions
Section 11.15 Counterparts
Section 11.16. Entire Understanding
Section 11.17. Binding Nature, Governing Law, Etc.
Section 11.18. Submission to Jurisdiction; Waiver of Jury Trial
Signature
Exhibit A - Revolving Credit Note
Exhibit B - Compliance Certificate
Exhibit C - Subordinated Indebtedness
Exhibit D - Subordination Provisions Applicable to Subordinated Debt
Exhibit E - Form of Guaranty
Schedule 6.2 - Subsidiaries
SHORT-TERM CREDIT AGREEMENT
To each of the Lenders party hereto:
Ladies and Gentlemen:
The undersigned, Anicom, Inc., an Delaware corporation (the "Company"),
applies to you for your several commitments, subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter set
forth, to extend credit to the Company, all as more fully hereinafter set forth.
.C1.SECTION 1. THE REVOLVING CREDITS.
.c2.Section 1.1. The Revolving Credit.; Subject to the terms and
conditions hereof, each Lender severally agrees to extend a revolving credit
(the "Revolving Credit") to the Company which may be availed of by the Company
from time to time during the period from and including the date hereof to but
not including the Revolving Credit Termination Date, at which time the
commitments of the Lenders to extend credit under the Revolving Credit shall
expire. The maximum amount of the Revolving Credit which each Lender agrees to
extend to the Company shall be as set forth opposite such Lender's signature
hereto under the heading "Revolving Credit Commitment" or as otherwise provided
in Section 11.10 hereof, as such amount may be reduced pursuant hereto. The
Revolving Credit may be utilized by the Company in the form of Loans, all as
more fully hereinafter set forth, provided that (i) the aggregate principal
amount of Loans under the Revolving Credit outstanding at any one time shall not
exceed the Revolving Credit Commitments and (ii) no additional Loans shall be
available under the Revolving Credit unless the commitments under the Long-Term
Credit Agreement are fully utilized. During the period from and including the
date hereof to but not including the Revolving Credit Termination Date, the
Company may use the Revolving Credit Commitments by borrowing, repaying and
reborrowing Loans in whole or in part, all in accordance with the terms and
conditions of this Agreement. For purposes of this Agreement, where a
determination of the unused or available amount of the Revolving Credit
Commitments is necessary, the Loans outstanding under the Revolving Credit shall
be deemed to utilize the Revolving Credit Commitments. The obligations of the
Lenders hereunder are several and not joint, and no Lender shall under any
circumstances be obligated to extend credit under the Revolving Credit in excess
of its Revolving Credit Commitment.
.c2.Section 1.2. The Revolving Credit Notes.; Subject to the terms and
conditions hereof, the Revolving Credit may be availed of by the Company in the
form of loans (individually a "Loan" and collectively the "Loans"). Each
Borrowing of Loans under the Revolving Credit shall be made ratably by the
Lenders in accordance with their Percentages of the Revolving Credit
Commitments. Each Borrowing of Loans under the Revolving Credit shall be in an
amount of $500,000 or such greater amount which is an integral multiple of
$100,000; provided, however, that a Borrowing of Loans under the Revolving
Credit which bears interest with reference to the Adjusted LIBOR shall be in
such greater amount as is required by Section 2 hereof. All Loans made by a
Lender under the Revolving Credit shall be made against and evidenced by a
single Short-Term Revolving Credit Note of the Company (individually a "Note"
and collectively the "Notes") payable to the order of such Lender in the amount
of its Revolving Credit Commitment, with each Note to be in the form (with
appropriate insertions) attached hereto as Exhibit A. Each Note shall be dated
the date of issuance thereof, be expressed to bear interest as set forth in
Section 2 hereof, and be expressed to mature on the Revolving Credit Termination
Date. Without regard to the principal amount of each Note stated on its face,
the actual principal amount at any time outstanding and owing by the Company on
account thereof shall be the sum of all advances then or theretofore made
thereon less all payments of principal actually received.
.c2.Section 1.3. Manner and Disbursement of Loans.; The Company shall
give written or telephonic notice to the Agent (which notice shall be
irrevocable once given and, if given by telephone, shall be promptly confirmed
in writing) by no later than 11:00 a.m. (Chicago time) on the date the Company
requests that any Borrowing of Loans be made to it under the Revolving Credit
Commitments, and the Agent shall promptly notify each Lender of the Agent's
receipt of each such notice. Each such notice shall specify the date of the
Borrowing of Loans requested (which must be a Business Day), the type of Loan
being requested, and the amount of such Borrowing. Each Borrowing of Loans shall
initially constitute part of the applicable Domestic Rate Portion except to the
extent the Company has otherwise timely elected that such Borrowing, or any part
thereof, constitute part of a LIBOR Portion as provided in Section 2 hereof. The
Company agrees that the Agent may rely upon any written or telephonic notice
given by any person the Agent in good faith believes is an Authorized
Representative without the necessity of independent investigation and, in the
event any telephonic notice conflicts with the written confirmation, such
telephonic notice shall govern if the Agent and the Lenders have acted in
reliance thereon. Not later than 1:00 p.m. (Chicago time) on the date specified
for any Borrowing of Loans to be made hereunder, each Lender shall make the
proceeds of its Loan comprising part of such Borrowing available to the Agent in
Chicago, Illinois in immediately available funds. Subject to the provisions of
Section 7 hereof, the proceeds of each Loan shall be made available to the
Company at the principal office of the Agent in Chicago, Illinois, in
immediately available funds, upon receipt by the Agent from each Lender of its
Percentage of such Borrowing. Unless the Agent shall have been notified by a
Lender prior to 1:00 p.m. (Chicago time) on the date a Borrowing is to be made
hereunder that such Lender does not intend to make the proceeds of its Loan
available to the Agent, the Agent may assume that such Lender has made such
proceeds available to the Agent on such date and the Agent may in reliance upon
such assumption make available to the Company a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such Lender
and the Agent has made such amount available to the Company, the Agent shall be
entitled to receive such amount from such Lender forthwith upon the Agent's
demand, together with interest thereon in respect of each day during the period
commencing on the date such amount was made available to the Company and ending
on but excluding the date the Agent recovers such amount at a rate per annum
equal to the effective rate charged to the Agent for overnight federal funds
transactions with member banks of the federal reserve system for each day as
determined by the Agent (or in the case of a day which is not a Business Day,
then for the preceding day). If such amount is not received from such Lender by
the Agent immediately upon demand, the Company will, on demand, repay to the
Agent the proceeds of such Loan attributable to such Lender with interest
thereon at a rate per annum equal to the interest rate applicable to the
relevant Loan, but without such payment being considered a payment or prepayment
of a LIBOR Portion, so that the Company will have no liability under Section 2.9
hereof with respect to such payment.
.c2.Section 1.4. Extensions of the Revolving Commitments;. The Company
may advise the Agent in writing of its desire to extend the Revolving Credit
Termination Date for an additional 364 days; provided (i) such request is made
no earlier than 60 days and not later than 30 days prior to the date on which
such Revolving Credit Termination Date is scheduled to occur, (ii) not more than
one such request for the extension of a Termination Date may be made in any one
calendar year and (iii) in no event shall the Revolving Credit Termination Date
be extended beyond June 30, 2003. The Agent shall promptly notify the Lenders of
each such request. Each Lender shall notify the Agent in writing within 30 days
after such Lender receives such notice from the Agent, whether such Lender in
its sole discretion agrees to such extension (each such Lender agreeing to such
extension being hereinafter referred to as a "Consenting Lender"). In the event
that a Lender shall fail to so notify the Agent within such 30-day period,
whether it agrees to such extension, such Lender shall be deemed to have refused
to grant the requested extension. Upon receipt by the Agent of the consent of
all the Lenders within such 30-day period, the Revolving Credit Termination Date
or Dates shall be automatically extended for 364 days. In the event the Company
and all the Lenders do not consent to the requested extension of the Revolving
Credit Termination Date, such Revolving Credit Termination Date shall take place
as scheduled.
.C1.SECTION 2. INTEREST AND CHANGE IN CIRCUMSTANCES.
.c2.Section 2.1. Interest Rate Options.;
(a) Portions. Subject to the terms and conditions of this Section 2,
portions of the principal indebtedness evidenced by the Notes (all of the
indebtedness evidenced by the Notes bearing interest at the same rate for the
same period of time being hereinafter referred to as a "Portion") may, at the
option of the Company, bear interest with reference to the Domestic Rate
("Domestic Rate Portions") or with reference to the Adjusted LIBOR ("LIBOR
Portions"), and Portions may be converted from time to time from one basis to
another. All of the indebtedness evidenced by a particular Class of Notes which
is not part of a LIBOR Portion shall constitute a single Domestic Rate Portion.
All of the indebtedness evidenced by Notes of the same type which bears interest
with reference to a particular Adjusted LIBOR for a particular Interest Period
shall constitute a single LIBOR Portion. There shall not be more than five (5)
LIBOR Portions applicable to the Notes outstanding at any one time, and each
Lender shall have a ratable interest in each Portion based on its Percentage.
Anything contained herein to the contrary notwithstanding, the obligation of the
Lenders to create, continue or effect by conversion any LIBOR Portion shall be
conditioned upon the fact that at the time no Default or Event of Default shall
have occurred and be continuing. The Company hereby promises to pay interest on
each Portion at the rates and times specified in this Section 2.
(b) Domestic Rate Portion. Each Domestic Rate Portion shall bear
interest at the rate per annum determined by adding the Applicable Margin to the
Domestic Rate as in effect from time to time, provided that if a Domestic Rate
Portion or any part thereof is not paid when due (whether by lapse of time,
acceleration or otherwise) such Portion shall bear interest, whether before or
after judgment, until payment in full thereof at the rate per annum determined
by adding 2% to the interest rate which would otherwise be applicable thereto
from time to time. Interest on each Domestic Rate Portion shall be payable
quarterly in arrears on the last day of each March, June, September and December
in each year (commencing September 30, 1998) and at maturity of the applicable
Notes, and interest after maturity (whether by lapse of time, acceleration or
otherwise) shall be due and payable upon demand. Any change in the interest rate
on the Domestic Rate Portions resulting from a change in the Domestic Rate shall
be effective on the date of the relevant change in the Domestic Rate.
(c) LIBOR Portions. Each LIBOR Portion shall bear interest for each
Interest Period selected therefor at a rate per annum determined by adding the
Applicable LIBOR Margin to the Adjusted LIBOR for such Interest Period, provided
that if any LIBOR Portion is not paid when due (whether by lapse of time,
acceleration or otherwise) such Portion shall bear interest, whether before or
after judgment, until payment in full thereof through the end of the Interest
Period then applicable thereto at the rate per annum determined by adding 2% to
the interest rate which would otherwise be applicable thereto, and effective at
the end of such Interest Period such LIBOR Portion shall automatically be
converted into and added to the applicable Domestic Rate Portion and shall
thereafter bear interest at the interest rate applicable to such Domestic Rate
Portion after default. Interest on each LIBOR Portion shall be due and payable
on the last day of each Interest Period applicable thereto and, with respect to
any Interest Period applicable to a LIBOR Portion in excess of 3 months, on the
date occurring every 3 months after the date such Interest Period began and at
the end of such Interest Period, and interest after maturity (whether by lapse
of time, acceleration or otherwise) shall be due and payable upon demand. The
Company shall notify the Agent on or before 11:00 a.m. (Chicago time) on the
third Business Day preceding the end of an Interest Period applicable to a LIBOR
Portion whether such LIBOR Portion is to continue as a LIBOR Portion, in which
event the Company shall notify the Agent of the new Interest Period selected
therefor, and in the event the Company shall fail to so notify the Agent, such
LIBOR Portion shall automatically be converted into and added to the applicable
Domestic Rate Portion as of and on the last day of such Interest Period. The
Agent shall promptly notify each Lender of each notice received from the Company
pursuant to the foregoing provision.
.c2.Section 2.2. Minimum LIBOR Portion Amounts.; Each LIBOR Portion
shall be in an amount equal to $1,000,000 or such greater amount which is an
integral multiple of $500,000.
.c2.Section 2.3. Computation of Interest.; All interest on the Loans
constituting part of the Domestic Rate Portion shall be computed on the basis of
a year of 365 or 366 days, as the case may be, for the actual number of days
elapsed. All interest on the Loans constituting all or part of a LIBOR Portion
shall be computed on the basis of a year of 360 days for the actual number of
days elapsed.
.c2.Section 2.4. Manner of Rate Selection.; The Company shall notify
the Agent by 11:00 a.m. (Chicago time) at least 3 Business Days prior to the
date upon which the Company requests that any LIBOR Portion be created or that
any part of the applicable Domestic Rate Portion be converted into a LIBOR
Portion (each such notice to specify in each instance the amount thereof and the
Interest Period selected therefor), and the Agent shall promptly notify each
Lender of each notice received from the Company pursuant to the foregoing
provision. If any request is made to convert a LIBOR Portion into another type
of Portion available hereunder, such conversion shall only be made so as to
become effective as of the last day of the Interest Period applicable thereto.
All requests for the creation, continuance and conversion of Portions under this
Agreement shall be irrevocable. Such requests may be written or oral and the
Agent is hereby authorized to honor telephonic requests for creations,
continuances and conversions received by it from any person the Agent in good
faith believes to be an Authorized Representative without the necessity of
independent investigation, the Company hereby indemnifying the Agent and the
Lenders from any liability or loss ensuing from so acting.
.c2.Section 2.5. Change of Law.; Notwithstanding any other provisions
of this Agreement or any Note, if at any time any Lender shall determine in good
faith that any change in applicable laws, treaties or regulations or in the
interpretation thereof makes it unlawful for such Lender to create or continue
to maintain any LIBOR Portion, it shall promptly so notify the Agent (which
shall in turn promptly notify the Company and the other Lenders) and the
obligation of such Lender to create, continue or maintain any such LIBOR Portion
under this Agreement shall terminate until it is no longer unlawful for such
Lender to create, continue or maintain such LIBOR Portion. The Company, on
demand, shall, if the continued maintenance of any such LIBOR Portion is
unlawful, thereupon prepay the outstanding principal amount of the affected
LIBOR Portion, together with all interest accrued thereon and all other amounts
payable to affected Lender with respect thereto under this Agreement; provided,
however, that the Company may elect to convert the principal amount of the
affected Portion into another type of Portion available hereunder, subject to
the terms and conditions of this Agreement.
.c2.Section 2.6. Unavailability of Deposits or Inability to Ascertain
Adjusted LIBOR.; Notwithstanding any other provision of this Agreement or any
Note, if prior to the commencement of any Interest Period, the Required Lenders
shall determine in good faith that deposits in the amount of any LIBOR Portion
scheduled to be outstanding during such Interest Period are not readily
available to such Lenders in the relevant market or, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining Adjusted LIBOR Rate, then such Lenders shall promptly give notice
thereof to the Agent (which shall in turn promptly notify the Company and the
other Lenders) and the obligations of the Lenders to create, continue or effect
by conversion any such LIBOR Portion in such amount and for such Interest Period
shall terminate until deposits in such amount and for the Interest Period
selected by the Company shall again be readily available in the relevant market
and adequate and reasonable means exist for ascertaining Adjusted LIBOR Rate, as
the case may be.
.c2.Section 2.7. Taxes and Increased Costs.; With respect to any LIBOR
Portion, if any Lender shall determine in good faith that any change in any
applicable law, treaty, regulation or guideline (including, without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or any new
law, treaty, regulation or guideline, or any interpretation of any of the
foregoing by any governmental authority charged with the administration thereof
or any central bank or other fiscal, monetary or other authority having
jurisdiction over such Lender or its lending branch or the LIBOR Portions
contemplated by this Agreement (whether or not having the force of law), shall:
(i) impose, increase, or deem applicable any reserve, special
deposit or similar requirement against assets held by, or deposits in or for the
account of, or loans by, or any other acquisition of funds or disbursements by,
such Lender which is not in any instance already accounted for in computing the
interest rate applicable to such LIBOR Portion;
(ii) subject such Lender, any LIBOR Portion or a Note to the extent it
evidences such a Portion to any tax (including, without limitation, any United
States interest equalization tax or similar tax however named applicable to the
acquisition or holding of debt obligations and any interest or penalties with
respect thereto), duty, charge, stamp tax, fee, deduction or withholding in
respect of this Agreement, any LIBOR Portion or a Note to the extent it
evidences such a Portion, except such taxes as may be measured by the overall
net income or gross receipts of such Lender or its lending branches and imposed
by the jurisdiction, or any political subdivision or taxing authority thereof,
in which such Lender's principal executive office or its lending branch is
located;
(iii) change the basis of taxation of payments of principal and
interest due from the Company to such Lender hereunder or under a Note to the
extent it evidences any LIBOR Portion (other than by a change in taxation of the
overall net income or gross receipts of such Lender or its lending branches); or
(iv) impose on such Lender any penalty with respect to the foregoing
or any other condition regarding this Agreement, any LIBOR Portion, or its
disbursement, or a Note to the extent it evidences any LIBOR Portion; and such
Lender shall determine in good faith that the result of any of the foregoing is
to increase the cost (whether by incurring a cost or adding to a cost) to such
Lender of creating or maintaining any LIBOR Portion hereunder or to reduce the
amount of principal or interest received or receivable by such Lender (without
benefit of, or credit for, any prorations, exemption, credits or other offsets
available under any such laws, treaties, regulations, guidelines or
interpretations thereof), then the Company shall pay on demand to the Agent for
the account of such Lender from time to time as specified by such Lender such
additional amounts as such Lender shall reasonably determine are sufficient to
compensate and indemnify it for such increased cost or reduced amount; provided,
however, that the Company shall not be obligated to pay any such amount or
amounts to the extent such additional cost or payment was incurred or paid by
such Lender more than ninety (90) days prior to the date of the delivery of the
certificate referred to in the immediately following sentence (nothing herein to
impair or otherwise affect the Company's liability hereunder for costs or
payments subsequently incurred or paid by such Lender). If a Lender makes such a
claim for compensation, it shall provide to the Company (with a copy to the
Agent) a certificate setting forth the computation of the increased cost or
reduced amount as a result of any event mentioned herein in reasonable detail
and such certificate shall be conclusive if reasonably determined.
.c2.Section2.8. Change in Capital Adequacy Requirements.; If any
Lender shall determine that the adoption after the date hereof of any applicable
law, rule or regulation regarding capital adequacy, or any change in any
existing law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender (or any of its branches) or any corporation controlling such
Lender with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's or such corporation's capital, as the case may be, as a consequence of
such Lender's obligations hereunder or for the credit which is the subject
matter hereof to a level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
liquidity and capital adequacy) by an amount deemed by such Lender to be
material, then from time to time, within fifteen (15) days after demand by such
Lender, the Company shall pay to the Agent for the account of such Lender such
additional amount or amounts reasonably determined by such Lender as will
compensate such Lender for such reduction; provided, however, that the Company
shall not be obligated to compensate such Lender to the extent its rate of
return was so reduced more than ninety (90) days prior to the date of such
demand (nothing herein to impair or otherwise affect the Company's liability
hereunder to compensate for subsequent reductions in such Lender's rate of
return).
.c2.Section 2.9. Funding Indemnity;. In the event any Lender shall
incur any loss, cost or expense (including, without limitation, any loss
(including loss of profit), cost or expense incurred by reason of the
liquidation or re-employment of deposits or other funds acquired or contracted
to be acquired by such Lender to fund or maintain its part of any LIBOR Portion
or the relending or reinvesting of such deposits or other funds or amounts paid
or prepaid to such Lender) as a result of:
(i) any payment of a LIBOR Portion on a date other than the last day
of the then applicable Interest Period for any reason, whether before or
after default, and whether or not such payment is required by any
provisions of this Agreement; or
(ii) any failure by the Company to create, borrow, continue or effect
by conversion a LIBOR Portion on the date specified in a notice given
pursuant to this Agreement;
then, upon the demand of such Lender, the Company shall pay to the Agent for the
account of such Lender such amount as will reimburse such Lender for such loss,
cost or expense. If a Lender requests such a reimbursement, it shall provide to
the Company (with a copy to the Agent) a certificate setting forth the
computation of the loss, cost or expense giving rise to the request for
reimbursement in reasonable detail and such certificate shall be conclusive if
reasonably determined; provided, however, that the Company shall not be
obligated to pay any such amount or amounts to the extent such loss, cost or
expense was incurred by such Lender more than ninety (90) days prior to the date
of the delivery of such certificate (nothing herein to impair or otherwise
affect the Company's liability hereunder to compensate for any subsequent loss,
cost, or expense incurred by such Lender).
.c2.Section 2.10. Lending Branch.; Each Lender may, at its option,
elect to make, fund or maintain its pro rata share of the Loans hereunder at the
branches or offices specified on the signature pages hereof or on any Assignment
Agreement executed and delivered pursuant to Section 11.10 hereof or at such of
its branches or offices as such Lender may from time to time elect. To the
extent reasonably possible, a Lender shall designate an alternate branch or
funding office with respect to its pro rata share of the LIBOR Portions to
reduce any liability of the Company to such Lender under Section 2.7 hereof or
to avoid the unavailability of an interest rate option under Section 2.6 hereof,
so long as such designation is not otherwise disadvantageous to the Lender.
.c2.Section 2.11. Discretion of Lenders as to Manner of Funding.;
Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of all or any part of its
Notes in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder (including, without
limitation, determinations under Sections 2.6, 2.7 and 2.9 hereof) shall be made
as if each Lender had actually funded and maintained each LIBOR Portion during
each Interest Period applicable thereto through the purchase of deposits in the
relevant market in the amount of its pro rata share of such LIBOR Portion,
having a maturity corresponding to such Interest Period, and bearing an interest
rate equal to the LIBOR Rate, as the case may be, for such Interest Period.
.C1.SECTION 3. FEES, PREPAYMENTS AND TERMINATIONS.
.c2.Section 3.1. Fees. ;
(a) Facility Fee. For the period from and including the date hereof to
but not including the Revolving Credit Termination Date, the Company shall pay
to the Agent for the account of the Lenders a facility fee at the rate of 1/10
of 1% (0.10%) per annum (computed on the basis of a year of 360 days for the
actual number of days elapsed) on the average daily amount of the Revolving
Credit Commitments (whether or not in use). Such facility fee shall be payable
quarterly in arrears on the last day of each March, June, September and December
in each year (commencing September 30, 1998) and on the Revolving Credit
Termination Date.
(b) Agent's Fee. On the date hereof and on the date occurring on each
anniversary of the date hereof when any credit, or commitment to extend credit,
is outstanding hereunder, the Company shall pay to the Agent, for its own use
and benefit, an Agent's fee as mutually agreed upon by the Company and the
Agent. .c2.Section 3.2. Voluntary Prepayments.; The Company shall have the
privilege of prepaying the Notes in whole or in part (but if in part, then in a
minimum amount of $500,000 or such greater amount which is an integral multiple
of $100,000 as to any particular class of Notes being prepaid) at any time upon
notice to the Agent prior to 11:00 a.m. (Chicago time) on the date fixed for
prepayment (such notice if received subsequent to 11:00 a.m. (Chicago time) on a
given day to be treated as though received at the opening of business on the
next Business Day), of which the Agent shall promptly so notify the Lenders, by
paying to the Agent for the account of the Lenders the principal amount to be
prepaid and (i) if such a prepayment prepays the Notes in full and is
accompanied by the termination in whole of the Revolving Credit Commitments,
accrued interest thereon to the date of prepayment and (ii) any amounts due to
the Lenders under Section 2.9 hereof.
.c2.Section 3.3. Terminations.;
The Company shall have the right at any time and from time to time,
upon 3 Business Days' prior notice to the Agent (which shall promptly so notify
the Lenders), to ratably terminate without premium or penalty and in whole or in
part (but if in part, then in an aggregate amount not less than $1,000,000 or
such greater amount which is an integral multiple of $500,000) the Revolving
Credit Commitments; provided, however, that the Revolving Credit Commitments may
not be reduced to an amount less than the aggregate principal amount of the
Loans then outstanding.
.c2.Section 3.4. Place and Application of Payments.; All payments of
principal, interest, fees and all other Obligations payable hereunder and under
the other Loan Documents shall be made to the Agent at its office at 000 Xxxx
Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx (or at such other place as the Agent may
specify) on the date any such payment is due and payable. Payments received by
the Agent after 11:00 a.m. (Chicago time) shall be deemed received as of the
opening of business on the next Business Day. All such payments shall be made in
lawful money of the United States of America, in immediately available funds at
the place of payment, without set-off or counterclaim and without reduction for,
and free from, any and all present or future taxes, levies, imposts, duties,
fees, charges, deductions, withholdings, restrictions and conditions of any
nature imposed by any government or any political subdivision or taxing
authority thereof (but excluding any taxes imposed on or measured by the net
income of any Lender). Except as herein provided, all payments shall be received
by the Agent for the ratable account of the Lenders and shall be promptly
distributed by the Agent ratably to the Lenders. Principal payments (including
prepayments) on the Notes shall first be applied to the Domestic Rate Portion of
such Notes until payment in full thereof, with any balance applied to LIBOR
Portions of such Notes in the order in which their Interest Periods expire.
Anything contained herein to the contrary notwithstanding, all
payments and collections received in respect of the Obligations, in each
instance, by the Agent or any of the Lenders after the occurrence of an Event of
Default shall be remitted to the Agent and distributed as follows:
(a) first, to the payment of any outstanding costs and expenses
incurred by the Agent in protecting, preserving or enforcing rights under
this Agreement or any of the other Loan Documents, and in any event
including all costs and expenses of a character which the Company has
agreed to pay under Section 11.4 hereof (such funds to be retained by the
Agent for its own account unless it has previously been reimbursed for such
costs and expenses by the Lenders, in which event such amounts shall be
remitted to the Lenders to reimburse them for payments theretofore made to
the Agent);
(b) second, to the payment of any outstanding interest or other fees
or amounts due under this Agreement or any of the other Loan Documents
other than for principal, pro rata as among the Agent and the Lenders in
accord with the amount of such interest and other fees or amounts owing
each;
(c) third, to the payment of the principal of the Notes, pro rata as
among the Lenders in accord with the then respective unpaid principal
balances of the Notes;
(d) fourth, to the Agent and the Lenders pro rata in accord with the
amounts of any other indebtedness, obligations or liabilities of the
Company owing to them and secured by the Collateral Documents unless and
until all such indebtedness, obligations and liabilities have been fully
paid and satisfied; and
(e) fifth, to the Company or to whoever the Agent reasonably
determines to be lawfully entitled thereto.
.c2. Section 3.5. Notations.; Each Loan made against a Note, the
status of all amounts evidenced by a Note as constituting part of the Domestic
Rate Portion or a LIBOR Portion, and, in the case of any LIBOR Portion, the
rates of interest and Interest Periods applicable to such Portions shall be
recorded by the relevant Lender on its books and records or, at its option in
any instance, endorsed on a schedule to the applicable Note of such Lender and
the unpaid principal balance and status, rates and Interest Periods so recorded
or endorsed by such Lender shall be prima facie evidence in any court or other
proceeding brought to enforce such Note of the principal amount remaining unpaid
thereon, the status of the Loan or Loans evidenced thereby and the interest
rates and Interest Periods applicable thereto; provided that the failure of a
Lender to record any of the foregoing shall not limit or otherwise affect the
obligation of the Company to repay the principal amount of each Note together
with accrued interest thereon.
.C1.SECTION 4. GUARANTIES. .c2.Section 4.1. Subsidiary Guaranties;.
The Loans and other Obligations shall be guaranteed by each Material Subsidiary
pursuant to a written guaranty from such Material Subsidiary in form and
substance reasonably acceptable to the Required Lenders.
C1.'SECTION 5. DEFINITIONS; INTERPRETATION'
.c2.Section 5.1. Definitions.; The following terms when used herein
shall have the following meanings:
"Acquisition" means (i) the acquisition of all or any substantial part
of the assets, property or business of any other person, firm or corporation, or
(ii) any acquisition of a majority of common stock, warrants or other equity
securities of any firm or corporation.
"Adjusted LIBOR" means a rate per annum determined by the Agent in
accordance with the following formula:
Adjusted LIBOR = LIBOR
-----------------------
100%-Reserve Percentage
"Reserve Percentage" means, for the purpose of computing Adjusted
LIBOR, the maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental or other special reserves)
imposed by the Board of Governors of the Federal Reserve System (or any
successor) under Regulation D on Eurocurrency liabilities (as such term is
defined in Regulation D) for the applicable Interest Period as of the first day
of such Interest Period, but subject to any amendments to such reserve
requirement by such Board or its successor, and taking into account any
transitional adjustments thereto becoming effective during such Interest Period.
For purposes of this definition, LIBOR Portions shall be deemed to be
Eurocurrency liabilities as defined in Regulation D without benefit of or credit
for prorations, exemptions or offsets under Regulation D. "LIBOR" means, for
each Interest Period, (a) the LIBOR Index Rate for such Interest Period, if such
rate is available, and (b) if the LIBOR Index Rate cannot be determined, the
arithmetic average of the rates of interest per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) at which deposits in U.S. Dollars in
immediately available funds are offered to the Agent at 11:00 a.m. (London,
England time) 2 Business Days before the beginning of such Interest Period by 3
or more major banks in the interbank eurodollar market selected by the Agent for
a period equal to such Interest Period and in an amount equal or comparable to
the applicable LIBOR Portion scheduled to be outstanding from the Agent during
such Interest Period. "LIBOR Index Rate" means, for any Interest Period, the
rate per annum (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a
period equal to such Interest Period which appears on the Telerate Page 3750 as
of 11:00 a.m. (London, England time) on the date 2 Business Days before the
commencement of such Interest Period. "Telerate Page 3750" means the display
designated as "Page 3750" on the Telerate Service (or such other page as may
replace Page 3750 on that service or such other service as may be nominated by
the British Bankers' Association as the information vendor for the purpose of
displaying British Banker's Association Interest Settlement Rates for U.S.
Dollar deposits). Each determination of LIBOR made by the Agent shall be
conclusive and binding on the Company and the Lenders absent manifest error.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for the purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise.
"Agent" means Xxxxxx Trust and Savings Bank and any successor thereto
appointed pursuant to Section 10.1 hereof.
"Agreement" means this Credit Agreement, as the same may be amended,
modified or restated from time to time in accordance with the terms hereof.
"Applicable Margin" shall mean with respect to each type of Portion
specified below the rate specified for such Obligation in the chart below,
subject to quarterly adjustment as hereinafter provided:
Applicable Applicable
When Following Status Exists Margin Margin For
For any Margin Determination For Domestic Rate LIBOR
Date Portion Is: Portions Is:
Level I Status (0.50%) .50%
LevelII Status (0.50%) .75%
Level III Status (0.50%) .875%
Level IV Status (0.25%) 1.00%
provided, however, that all of the foregoing percentages set forth in the chart
above are subject to the following:
(i) on or before the date that is ten (10) Business Days after the
latest date by which the Company is required to deliver a Compliance
Certificate to the Agent for a given quarterly accounting period pursuant
to Section 8.5(c) hereof (each date that is ten Business Days after the
latest date by which the Company is required to deliver a Compliance
Certificate to the Agent being herein referred to as the "Margin
Determination Date"), the Agent shall determine whether Level I Status,
Level II Status, Level III Status or Level IV Status exists as of the close
of the applicable quarterly accounting period (each, a "quarterly test
period") and shall also determine the Interest Coverage Ratio and Debt to
Earnings Ratio as of such close, in each case based upon such Compliance
Certificate and the financial statements delivered to the Agent under
Section 8.5 hereof for such quarterly test period, and shall promptly
notify the Company of such determination and of any change in the
Applicable Margin resulting therefrom;
(ii) the Applicable Margin for the Loans shall be the rate set forth
in the chart above, after giving effect to adjustments pursuant to clause
(iii) of this proviso below, unless the Interest Coverage Ratio as of the
close of such quarterly test period is less than 2.5 to 1.0. In such event,
the Applicable Margin for the Loans in each case shall be .0625% above the
rate otherwise specified hereunder (after giving effect to adjustments
pursuant to such clause (iii) hereof);
(iii) the Applicable Margin for the Loans shall be the rate set forth
in the chart above, after giving effect to adjustments pursuant to clause
(ii) of this proviso above, unless the Debt to Earnings Ratio as of the
close of the relevant quarterly test period is greater than 3.0 to 1.0. In
such event, the Applicable Margin for the Loans in each case shall be .25%
above the rate otherwise specified hereunder (after giving effect to
adjustments pursuant to such clause (ii) hereof);
(iv) any change in the Applicable Margin (except for such a change
pursuant to clause (iii) hereof) shall be effective as of such Margin
Determination Date, with such new Applicable Margin to continue in effect
until the next Margin Determination Date. If the Company has not delivered
a Compliance Certificate by the date such Compliance Certificate is
required to be delivered under Section 8.5 hereof, until a Compliance
Certificate is delivered before the next Margin Determination Date, the
Applicable Margin shall be the Applicable Margin for Level IV Status as if
the Debt to Earnings Ratio as calculated for purposes of clause (iii) above
were greater than 3.0 to 1.0. If the Company subsequently delivers a
Compliance Certificate before the next Margin Determination Date, the
Applicable Margin established by such Compliance Certificate shall take
effect from the date ten (10) Business Days after the date of such delivery
and remain effective until the next Margin Determination Date; and
(v) the initial Applicable Margin in effect through the first Margin
Determination Date shall be the Applicable Margin for Level I Status.
"Assignment Agreements" is defined in Section 11.10 hereof.
"Authorized Representative" means those persons shown on the list of
officers provided by the Company pursuant to Section 7.2(a) hereof or on any
update of any such list provided by the Company to the Agent, or any further or
different officer of the Company so named by any Authorized Representative of
the Company in a written notice to the Agent.
"Borrowing" means the total of Loans of a single type made to the Company
by all the Lenders on a single date, and if such Loans are to be part of a LIBOR
Portion, for a single Interest Period. Borrowings of Loans are made and
maintained ratably from each of the Lenders according to their Percentages of
the applicable Commitments. "Business Day" means any day other than a Saturday
or Sunday on which banks are not authorized or required to close in Chicago,
Illinois and, when used with respect to LIBOR Portions, a day on which banks are
also dealing in United States Dollar deposits in London, England and Nassau,
Bahamas.
"Capital Lease" means any lease of Property which in accordance with GAAP
is required to be capitalized on the balance sheet of the lessee. "Capitalized
Lease Obligation" means the amount of the liability shown on the balance sheet
of any Person in respect of a Capital Lease determined in accordance with GAAP.
"Code" means the Internal Revenue Code of 1986, as amended, and any successor
statute thereto.
"Company" is defined in the introductory paragraph hereof.
"Compliance Certificate" is defined in Section 8.5 hereof.
"Consolidated Net Income" means, for any period, the net income (or net
loss) of the Company and its Subsidiaries for such period computed on a
consolidated basis in accordance with GAAP, including without limitation
interest income and, without limiting the foregoing, after deduction from gross
income of all expenses and reserves, including reserves for all taxes on or
measured by income, but excluding any extraordinary profits and also excluding
any taxes on such profits. "Convertible Preferred Stock" shall mean the Series A
Convertible Preferred Stock issued by the Company on May 20, 1997.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Company or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"Current Ratio" means, as of any time the same is to be determined, the
ratio of current assets of the Company and its Subsidiaries to current
liabilities of the Company and its Subsidiaries, all as determined on a
consolidated basis in accordance with GAAP consistently applied, but, in any
event subject to the following restrictions and limitations: (a) current
liabilities for such purposes shall include all loans outstanding hereunder or
under the Long-Term Credit Agreement which mature within one year of such date
of determination; (b) current liabilities for such purposes shall exclude all
Special Post-Closing Acquisition Liabilities; and (c) current assets for such
purposes shall include all prepaid expenses.
"Debt to Earnings Ratio" means, as of any time the same is to be
determined, the ratio of Total Funded Debt at such time to EBITDA for the four
fiscal quarters of the Company then ended. "Default" means any event or
condition the occurrence of which would, with the passage of time or the giving
of notice, or both, constitute an Event of Default.
"Domestic Rate" means, for any day, the greater of (i) the rate of interest
announced by the Agent from time to time as its prime commercial rate, as in
effect on such day (it being understood and agreed that such rate may not be the
Agent's best or lowest rate); and (ii) the sum of (x) the rate determined by the
Agent to be the average (rounded upwards, if necessary, to the next higher 1/100
of 1%) of the rates per annum quoted to the Agent at approximately 10:00 a.m.
(Chicago time) (or as soon thereafter as is practicable) on such day (or, if
such day is not a Business Day, on the immediately preceding Business Day) by
two or more Federal funds brokers selected by the Agent for the sale to the
Agent at face value of Federal funds in an amount equal or comparable to the
principal amount owed to the Agent for which such rate is being determined, plus
(y) 1/2 of 1%.
"Domestic Rate Portions" is defined in Section 2.1(a) hereof.
"EBIT" means, for any period, Consolidated Net Income for such period plus
all amounts deducted in arriving at such Consolidated Net Income amount for such
period for Interest Expense and for foreign, federal, state and local income tax
expense.
"EBITDA" means, for any period, EBIT for such period plus all amounts
deducted in arriving at such EBIT in respect of (i) all amounts properly charged
for depreciation of fixed assets and amortization of Capital Leases and
intangible assets during such period on the books of the Company and its
Subsidiaries and (to the extent such period includes the fourth fiscal quarter
of the fiscal year the Company ended on or about December 31, 1997) (ii) all the
Fiscal 1997 Charges during such period, all as determined in accordance with
GAAP.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto. "Event of Default" means any event or
condition identified as such in Section 9.1 hereof. "Existing Lenders" means
Xxxxxx Trust and Savings Bank, The First National Bank of Chicago and LaSalle
National Bank.
"Existing Credit Agreement" means the Short-Term Credit Agreement dated as
of July 3, 1997, among the Company, Xxxxxx Trust and Savings Bank, as Agent and
the Existing Lenders, as amended and supplemented.
"Fiscal 1997 Charges" means up to $5,584,000 of the charges taken by the
Company against its earnings in the fourth fiscal quarter of its fiscal year
ended on or about December 31, 1997 for the Company's costs (including internal
costs) related to its development and implementation of new business processes
and information technology system, writing off all capitalized costs associated
with the Company's previous system, terminating certain contractual obligations
that resulted from a 1996 acquisition, consolidating redundant facilities and
the internal resource costs related to the implementation of the new system and
the business process reengineering plan.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied by the Company and its Subsidiaries on a basis consistent
with the preparation of the Company's most recent financial statements furnished
to the Lenders pursuant to Section 6.5 hereof. "Guarantor" means each Material
Subsidiary of the Company that executes and delivers to the Agent a Guaranty
Agreement.
"Guaranty Agreement" means each guaranty issued by a Material Subsidiary to
the Agent guaranteeing all or any Obligations.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) (i) all indebtedness created, assumed or incurred in any manner by
such Person representing money borrowed (including by the issuance of debt
securities), (ii) all indebtedness for the deferred purchase price of property
or services (other than trade accounts payable arising in the ordinary course of
business which are not more than sixty (60) days past due), (iii) all
indebtedness secured by any Lien upon Property of such Person, whether or not
such Person has assumed or become liable for the payment of such indebtedness,
(iv) all Capitalized Lease Obligations of such Person and (v) all obligations of
such Person on or with respect to letters of credit, bankers' acceptances and
other extensions of credit whether or not representing obligations for borrowed
money.
"Intangible Assets" means, as of any time the same is to be determined,
goodwill, patents, trademarks, copyrights and franchises of the Company and its
Subsidiaries (including, without limitation, unamortized debt discount and
expense, organization costs and deferred research and development expense)
determined on a consolidated basis in accordance with GAAP.
"Interest Expense" means, with reference to any period, the
sum of all interest charges (including imputed interest charges with
respect to Capitalized Lease Obligations and all amortization of debt
discount and expense) of the Company and its Subsidiaries for such
period as computed on a consolidated basis in accordance with GAAP.
"Interest Period" means, with respect to any LIBOR Portion, the period
commencing on, as the case may be, the creation, continuation or conversion date
with respect to such LIBOR Portion and ending 1, 2, 3 or 6 months thereafter as
selected by the Company in its notice as provided herein; provided that, all of
the foregoing provisions relating to Interest Periods are subject to the
following:
(i) if any Interest Period would otherwise end on a day which is
not a Business Day, that Interest Period shall be extended to the next
succeeding Business Day, unless in the case of an Interest Period for
a LIBOR Portion the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) no Interest Period may extend beyond the final maturity date
of the relevant Notes;
(iii) the interest rate to be applicable to each Portion for each
Interest Period shall apply from and including the first day of such
Interest Period to but excluding the last day thereof; and
(iv) no Interest Period may be selected if after giving effect thereto the
Company will be unable to make a principal payment scheduled to be made during
such Interest Period without paying part of a LIBOR Portion on a date other than
the last day of the Interest Period applicable thereto.
For purposes of determining an Interest Period, a month means a period starting
on one day in a calendar month and ending on a numerically corresponding day in
the next calendar month, provided, however, if an Interest Period begins on the
last day of a month or if there is no numerically corresponding day in the month
in which an Interest Period is to end, then such Interest Period shall end on
the last Business Day of such month.
"Lender" means Xxxxxx Trust and Savings Bank, the other signatories hereto
(other than the Company) and all other lenders becoming parties hereto pursuant
to Section 11.10 hereof.
"Leverage Ratio" means, as of any time the same is to be determined, the
ratio of Total Funded Debt of the Company and its Subsidiaries to Total
Capitalization of the Company and its Subsidiaries, all as determined on a
consolidated basis in accordance with GAAP.
"Level I Status" shall mean, for any Margin Determination Date, that as of
the close of the quarterly test period with reference to which such Margin
Determination Date was set, the Pricing Leverage Ratio is less than or equal to
10%.
"Level II Status" shall mean, for any Margin Determination Date, that as of
the close of the quarterly test period with reference to which such Margin
Determination Date was set, the Pricing Leverage Ratio is greater than 10% but
less than or equal to 20%.
"Level III Status" shall mean, for any Margin Determination Date, that as
of the close of the quarterly test period with reference to which such Margin
Determination Date was set, the Pricing Leverage Ratio is greater than 20% but
less than or equal to 30%.
"Level IV Status" shall mean, for any Margin Determination Date, that as of
the close of the quarterly test period with reference to which such Margin
Determination Date was set, the Pricing Leverage Ratio is greater than 30%.
"LIBOR Portions" means and includes LIBOR Portions, unless the context
in which such term is used shall otherwise require.
"LIBOR Portions" is defined in Section 2.1(a) hereof.
"Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"Loan Documents" means this Agreement, the Notes, the Assignment Agreements
and each other instrument or document to be delivered hereunder or thereunder or
otherwise in connection therewith.
"Loans" is defined is Section 1.2 hereof.
"Long-Term Credit Agreement" means that certain Long-Term Credit Agreement
dated as of even date herewith among the Company, Xxxxxx Trust and Savings Bank,
individually and as agent, The First National Bank of Chicago, LaSalle National
Bank, Bank of America National Trust and Savings Association and the other
lenders from time to time party thereto, as amended and supplemented from time
to time.
"Material Subsidiary" means any Subsidiary which has, as of the close of
any completed fiscal year of the Company (commencing with the Company's fiscal
year ending December 31, 0000), XXXXXX for any such fiscal year (directly and
together with its subsidiaries) greater than 7% of the EBITDA of the Company and
its Subsidiaries for any such fiscal year on a consolidated basis in accordance
with GAAP.
"Non-Material Subsidiary" means each Subsidiary other than a Material
Subsidiary. "Notes" is defined in Section 1.2 hereof.
"Obligations" means all obligations of the Company to pay principal and
interest on the Loans, all fees and charges payable hereunder, and all other
payment obligations of the Company arising under or in relation to any Loan
Document, in each case whether now existing or hereafter arising, due or to
become due, direct or indirect, absolute or contingent, and howsoever evidenced,
held or acquired.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Percentage" means, for each Lender, the percentage of the Revolving Credit
Commitments represented by such Lender's Revolving Credit Commitment or, if the
Revolving Credit Commitments have been terminated, the percentage held by such
Lender of the aggregate principal amount of all outstanding Obligations.
"Person" means an individual, partnership, corporation, association, trust,
unincorporated organization or any other entity or organization, including a
government or agency or political subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the Code that
either (i) is maintained by a member of the Controlled Group for employees of a
member of the Controlled Group, or (ii) is maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which a member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
"Portion" is defined in Section 2.1(a) hereof.
"Pricing Leverage Ratio" means, as of any time the same is to be
determined, the ratio of Total Funded Debt to Total Capitalization of
the Company and its Subsidiaries, all as determined on a consolidated
basis in accordance with GAAP.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Required Lenders" means, as of the date of determinations thereof, those
Lenders holding at least 66-2/3% of the Revolving Credit Commitments or, in the
event that no Revolving Credit Commitments are outstanding hereunder, holding at
least 66-2/3% in aggregate principal amount of the Loans.
"Revolving Credit" is defined in Section 1.1 hereof.
"Revolving Credit Commitments" means the commitments of the Lenders to
extend credit under the Revolving Credit in the amounts set forth opposite their
signatures hereto under the heading "Revolving Credit Commitment" and opposite
their signatures on Assignment Agreements delivered pursuant to Section 11.10
hereof under the heading "Revolving Credit Commitment", as such amounts may be
reduced pursuant hereto.
"Revolving Credit Note" is defined in Section 1.2 hereof. "Revolving
Credit Termination Date" means June 30, 1999, or such earlier date on
which the Revolving Credit Commitments are terminated in whole pursuant
to Section 3.3, 9.2 or 9.3 hereof, or in such later date to which the
Revolving Credit Termination Date is extended pursuant to Section 1.4
hereof.
"Shareholders' Equity" means, as of any time the same is to be determined,
the sum (without duplication) of (i) shareholders' equity (including all capital
stock, additional paid-in-capital and retained earnings after deducting treasury
stock, but excluding minority interests in subsidiaries) which would appear on
the balance sheet of the Company and its Subsidiaries plus (to the extent not
included in such Shareholders' Equity) (ii) the Convertible Preferred Stock, all
as determined on a consolidated basis in accordance with GAAP.
"SEC" means the Securities and Exchange Commission or any successor agency
thereto.
"Special Post-Closing Acquisition Liabilities" means as of any time, those
liabilities established by the Company after making an Acquisition which survive
such Acquisition associated with the Property or Person so acquired, or the
employees of such Person, to the extent (i) such liabilities are reflected as a
current liability in accordance with GAAP on a consolidated balance sheet of the
Company and its Subsidiaries, (ii) the creation of such liabilities is offset by
a concurrent debit of like amount in accordance with GAAP to the goodwill of the
Company and its Subsidiaries and (iii) such liabilities have been reasonably
described in the most recent Compliance Certificate submitted to the Agent.
"Subordinated Indebtedness" means, as of any time the same is to be
determined, indebtedness of the Company or any Subsidiary subordinated in right
of payment to the Obligations, pursuant to documentation containing interest
rates, payment terms, maturities, amortization schedules, covenants, defaults,
remedies, subordination provisions and other material terms in form and
substance satisfactory to the Lenders. The Lenders further acknowledge and agree
that subordination provisions in the form or substantially the form annexed
hereto as Exhibit D constitute subordination provisions satisfactory in form and
substance to the Lenders.
"Subsidiary" means any corporation or other Person more than 50% of the
outstanding ordinary voting shares or other equity interests of which is at the
time directly or indirectly owned by the Company, by one or more of its
Subsidiaries, or by the Company and one or more of its Subsidiaries. "Tangible
Net Worth" means, as of any time the same is to be determined, Shareholders'
Equity less the sum of (i) all notes receivable from officers and employees of
the Company and its Subsidiaries and (ii) Intangible Assets.
"Total Capitalization" means the sum of Total Funded Debt and Shareholder's
Equity.
"Total Funded Debt" means, at any time the same is to be determined, the
aggregate of all Indebtedness for Borrowed Money of the Company and its
Subsidiaries at such time, plus all Indebtedness for Borrowed Money of any other
Person which is directly or indirectly guaranteed by the Company or any of its
Subsidiaries or which the Company or any of its Subsidiaries has agreed
(contingently or otherwise) to purchase or otherwise acquire or in respect of
which the Company or any of its Subsidiaries has otherwise assured a creditor
against loss.
"Unfunded Vested Liabilities" means, for any Plan at any time, the amount
(if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA. "Welfare Plan" means a "welfare plan" as defined in
Section 3(1) of ERISA.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the issued and
outstanding shares of capital stock (other than directors' qualifying shares as
required by law) or other equity interests are owned by the Company and/or one
or more Wholly-Owned Subsidiaries within the meaning of this definition.
.c2.Section 5.2. Interpretation. ; The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"hereof", "herein", and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement.
.C1.SECTION 6. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to the Agent and the Lenders as
follows:
.c2.Section 6.1. Organization and Qualification;. The Company is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of Delaware, has full and adequate corporate power to own its
Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying.
.c2.Section 6.2. Subsidiaries;. Each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, as the case may be, has full and adequate power to
own its Property and conduct its business as now conducted, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to obtain such
authorization, license or qualification would not result in a material adverse
change in the business, financial condition or Properties of the Company and its
Subsidiaries. Schedule 6.2 hereto identifies each Subsidiary, the jurisdiction
of its incorporation or organization, as the case may be, the percentage of
issued and outstanding shares of each class of its capital stock or other equity
interests owned by the Company and the Subsidiaries and, if such percentage is
not 100% (excluding directors' qualifying shares as required by law), a
description of each class of its authorized capital stock and other equity
interests and the number of shares of each class issued and outstanding. All of
the outstanding shares of capital stock and other equity interests of each
Subsidiary are validly issued and outstanding and fully paid and nonassessable
and all such shares and other equity interests indicated on Schedule 6.2 as
owned by the Company or a Subsidiary are owned, beneficially and of record, by
the Company or such Subsidiary free and clear of all Liens. There are no
outstanding commitments or other obligations of any Subsidiary to issue, and no
options, warrants or other rights of any Person to acquire, any shares of any
class of capital stock or other equity interests of any Subsidiary. Each
Subsidiary that is a Material Subsidiary is so noted on Schedule 6.2 hereto.
Each Material Subsidiary is a Guarantor except to the extent Section 8.1(b)
hereof does not yet require such Subsidiary to be a Guarantor.
.c2.Section 6.3. Corporate Authority and Validity of Obligations;. (a)
The Company has full right and authority to enter into this Agreement and the
other Loan Documents, to make the borrowings herein provided for, to issue its
Notes in evidence thereof, and to perform all of its obligations hereunder and
under the other Loan Documents. The Loan Documents delivered by the Company have
been duly authorized, executed and delivered by the Company and constitute valid
and binding obligations of the Company enforceable in accordance with their
terms except as enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law); and this
Agreement and the other Loan Documents do not, nor does the performance or
observance by the Company of any of the matters and things herein or therein
provided for, contravene or constitute a default under any provision of law or
any judgment, injunction, order or decree binding upon the Company or any
provision of the charter, articles of incorporation or by-laws of the Company or
any covenant, indenture or agreement of or affecting the Company or any of its
Properties, or result in the creation or imposition of any Lien on any Property
of the Company.
(b) Guarantors. Each Guarantor has full right and authority to enter
into any Loan Documents it has executed and to perform all of its obligations
thereunder. The Loan Documents delivered by each Guarantor have been duly
authorized, executed and delivered by such Guarantor and constitute valid and
binding obligations of such Guarantor enforceable in accordance with their terms
except as enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights generally and general
principles of equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law); and such Loan Documents do
not, nor does the performance or observance by such Guarantor of any of the
matters and things herein or therein provided for, contravene or constitute a
default under any provision of law or any judgment, injunction, order or decree
binding upon the Company or any Guarantor or any provision of the charter,
articles of incorporation or by-laws of the Company or any Guarantor or any
covenant, indenture or agreement of or affecting the Company or any Guarantor or
any of their Properties, or result in the creation or imposition of any Lien on
any Property of the Company or any Guarantor.
.c2.'Section 6.4. Use of Proceeds; Margin Stock';. The Company shall use
the proceeds of the Loans and other extensions of credit made available
hereunder solely for its general working capital purposes and for such other
legal and proper purposes as are consistent with all applicable laws. Neither
the Company nor any Subsidiary is engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System), and no
part of the proceeds of any Loan or any other extension of credit made hereunder
will be used to purchase or carry any such margin stock or to extend credit to
others for the purpose of purchasing or carrying any such margin stock.
.c2.Section 6.5. Financial Reports;. The consolidated balance sheet of
the Company and its Subsidiaries as at December 31, 1997, and the related
consolidated statements of income, retained earnings and cash flows of the
Company and its Subsidiaries for the fiscal year then ended, and accompanying
notes thereto, which financial statements are accompanied by the audit report of
Coopers & Xxxxxxx, LLP, independent public accountants, and the unaudited
interim consolidated balance sheet of the Company and its Subsidiaries as at
March 31, 1998, and the related consolidated statements of income and cash flows
of the Company and its Subsidiaries for the three (3) months then ended,
heretofore furnished to the Lenders, fairly present the consolidated financial
condition of the Company and its Subsidiaries as at said dates and the
consolidated results of their operations and cash flows for the periods then
ended in conformity with generally accepted accounting principles applied on a
consistent basis. Neither the Company nor any Subsidiary has contingent
liabilities which are material to it other than as indicated on such financial
statements or, with respect to future periods, on the financial statements
furnished pursuant to Section 8.5 hereof.
.c2.Section 6.6. No Material Adverse Change;. Since March 31, 1998,
there has been no change in the condition (financial or otherwise) or business
prospects of the Company or any Subsidiary except those occurring in the
ordinary course of business, none of which individually or in the aggregate have
been materially adverse.
.c2.Section 6.7. Full Disclosure;. The statements and information
furnished to the Lenders in connection with the negotiation of this Agreement
and the other Loan Documents and the commitments by the Lenders to provide all
or part of the financing contemplated hereby do not contain any untrue
statements of a material fact or omit a material fact necessary to make the
material statements contained herein or therein not misleading, the Lenders
acknowledging that as to any projections furnished to Lenders, the Company only
represents that the same were prepared on the basis of information and estimates
the Company believed to be reasonable.
.c2.Section 6.8. Good Title;. The Company and its Subsidiaries each
have good and defensible title to their assets as reflected on the most recent
consolidated balance sheet of the Company and its Subsidiaries furnished to the
Lenders (except for sales of assets by the Company and its Subsidiaries in the
ordinary course of business), subject to no Liens other than such thereof as are
permitted by Section 8.12 hereof.
.c2.Section 6.9. Litigation and Other Controversies;. There is no
litigation or governmental proceeding or labor controversy pending, nor to the
knowledge of the Company threatened, against the Company or any Subsidiary which
if adversely determined would (a) impair the validity or enforceability of, or
impair the ability of the Company to perform its obligations under, this
Agreement or any other Loan Document or (b) result in any material adverse
change in the financial condition, Properties, business or operations of the
Company or any Subsidiary.
.c2.Section 6.10. Taxes;. All tax returns required to be filed by the
Company or any Subsidiary in any jurisdiction have, in fact, been filed, and all
taxes, assessments, fees and other governmental charges upon the Company or any
Subsidiary or upon any of their respective Properties, income or franchises,
which are shown to be due and payable in such returns, have been paid. The
Company does not know of any proposed additional tax assessment against it or
its Subsidiaries for which adequate provision in accordance with GAAP has not
been made on its accounts. Adequate provisions in accordance with GAAP for taxes
on the books of the Company and each Subsidiary have been made for all open
years, and for its current fiscal period.
.c2.Section 6.11. Approvals;. No authorization, consent, license, or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any approval or consent of the
stockholders of the Company or any other Person, is or will be necessary to the
valid execution, delivery or performance by the Company of this Agreement or any
other Loan Document. .c2.Section
6.12. Affiliate Transactions;. Neither the Company nor any Subsidiary
is a party to any contracts or agreements with any of its Affiliates (other than
with Wholly-Owned Subsidiaries) on terms and conditions which are less favorable
to the Company or such Subsidiary than would be usual and customary in similar
contracts or agreements between Persons not affiliated with each other.
.c2.'Section 6.13. Investment Company; Public Utility Holding
Company';. Neither the Company nor any Subsidiary is an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "public utility holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
.c2.Section 6.14. ERISA;. The Company and each other member of its
Controlled Group has fulfilled its obligations under the minimum funding
standards of and is in compliance in all material respects with ERISA and the
Code to the extent applicable to it and has not incurred any liability to the
PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA. Neither the Company nor any Subsidiary has
any contingent liabilities with respect to any post-retirement benefits under a
Welfare Plan, other than liability for continuation coverage described in
article 6 of Title I of ERISA.
.c2.Section 6.15. Compliance with Laws;. The Company and each of its
Subsidiaries are in compliance with the requirements of all federal, state and
local laws, rules and regulations applicable to or pertaining to their
Properties or business operations (including, without limitation, the
Occupational Safety and Health Act of 1970, the Americans with Disabilities Act
of 1990, and laws and regulations establishing quality criteria and standards
for air, water, land and toxic or hazardous wastes and substances),
non-compliance with which could have a material adverse effect on the financial
condition, Properties, business or operations of the Company or any Subsidiary.
Neither the Company nor any Subsidiary has received notice to the effect that
its operations are not in compliance with any of the requirements of applicable
federal, state or local environmental, health and safety statutes and
regulations or are the subject of any governmental investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action could have a material adverse effect on the financial condition,
Properties, business or operations of the Company or any Subsidiary.
.c2.Section 6.16. Other Agreements;. Neither the Company nor any
Subsidiary is in default under the terms of any covenant, indenture or agreement
of or affecting the Company, any Subsidiary or any of their Properties, which
default if uncured would have a material adverse effect on the financial
condition, Properties, business or operations of the Company or any Subsidiary.
..c2.Section 6.17. No Default;. No Default or Event of Default has
occurred and is continuing.
..c2.Section 6.18. Year 2000 Compliance;. The Company and its
Subsidiaries have conducted a comprehensive review and assessment of its
computer applications, and are in the process of making such inquiry of their
respective material suppliers, vendors and customers as the Company or relevant
Subsidiary (as the case may be) deem appropriate, with respect to any defect in
computer software, data bases, hardware, controls and peripherals related to the
occurrence of the year 2000 or the use of any date after December 31, 1999, in
connection therewith. Based on the foregoing review, assessment and inquiry, the
Company believes that no such defect could reasonably be expected to have a
material adverse effect on the financial condition, Properties, business or
operations of the Company and its Subsidiaries taken as a whole.
.C1.SECTION 7. CONDITIONS PRECEDENT;.
The obligation of the Lenders to make any Loan under this Agreement is
subject to the following conditions precedent:
.c2.Section 7.1. All Advances.; As of the time of the making of each
extension of credit (including the initial extension of credit) hereunder:
(a) each of the representations and warranties set forth in
Section 6 hereof and in the other Loan Documents shall be true and
correct as of such time, except to the extent the same expressly
relate to an earlier date;
(b) the Company shall be in full compliance with all of the terms
and conditions of this Agreement and of the other Loan Documents, and
no Default or Event of Default shall have occurred and be continuing
or would occur as a result of making such extension of credit;
(c) after giving effect to such extension of credit the aggregate
principal amount of all Loans under the Revolving Credit outstanding
under this Agreement shall not exceed the Revolving Credit
Commitments;
(d) the Commitments under the Long-Term Credit Agreement are
fully utilized; and
(e) such extension of credit shall not violate any order,
judgment or decree of any court or other authority or any provision of
law or regulation applicable to the Agent or any Lender (including,
without limitation, Regulation U of the Board of Governors of the
Federal Reserve System) as then in effect. The Company's request for
any Loan shall constitute its warranty as to the facts specified in
subsections (a) through (d), both inclusive, above.
.c2.Section 7.2. Initial Advance;. At or prior to the making of the
initial extension of credit hereunder, the following conditions precedent shall
also have been satisfied:
(a) the Agent shall have received the following for the account
of the Lenders (each to be properly executed and completed) and the
same shall have been approved as to form and substance by the Agent:
(i) the Notes; (ii) the Guaranty Agreements; (iii) copies (executed or
certified, as may be appropriate) of all legal documents or
proceedings taken in connection with the execution and delivery of
this Agreement and the other Loan Documents to the extent the Agent or
its counsel may reasonably request; (iv) an incumbency certificate
containing the name, title and genuine signatures of each of the
Company's Authorized Representatives; and (v) pay-off letter from the
Existing Lenders under the Existing Credit Agreement.
(b) the Agent shall have received the initial fees called for
hereby;
(c) each Lender shall have received such certifications as it may
require in order to satisfy itself as to the financial condition of
the Company and its Subsidiaries, and the lack of material contingent
liabilities of the Company and its Subsidiaries;
(d) legal matters incident to the execution and delivery of this
Agreement and the other Loan Documents and to the transactions
contemplated hereby shall be satisfactory to each Lender and its
counsel; and the Agent shall have received for the account of the
Lenders the written opinion of counsel for the Company in form and
substance satisfactory to the Lender and its counsel;
(e) the Agent shall have received for the account of the Lenders
a good standing certificate for the Company (dated as of the date no
earlier than thirty (30) days prior to the date hereof) from the
office of the secretary of state of the state of its incorporation and
each state in which it is qualified to do business as a foreign
corporation; and
(f) the Agent shall have received for the account of the Lenders
such other agreements, instruments, documents, certificates and
opinions as the Agent or the Lenders may reasonably request.
.c2.Section 7.3. Termination of Existing Credit Agreement;. Each of the
Company and the Existing Lenders consent to the termination of the "Revolving
Credit Commitments" under the Existing Credit Agreement effective on the date
the conditions set forth in Section 7.2 hereof are satisfied, notwithstanding
the notice requirements for such termination set forth in Section 3.3 of the
Existing Credit Agreement. The Existing Credit Agreement shall terminate and all
amounts payable thereunder, including accrued and unpaid facility fees payable
under Section 3.1 thereof, shall be payable, and the facility fee payable under
Section 3.1 hereof shall begin to accrue, on the date that this Agreement has
been executed by all the parties hereto and the conditions set forth in Section
7.2 hereof have been satisfied.
.c2.Section 7.4. July 15 as Earliest Effective Date;. Notwithstanding
anything herein to the contrary, this Agreement shall not in any event take
effect any earlier than July 15, 1998.
.C1.SECTION 8. COVENANTS;.
The Company agrees that, so long as any credit is available to or in
use by the Company hereunder, except to the extent compliance in any case or
cases is waived in writing by the Required Lenders:
.c2.'Section 8.1. Corporate Existence; Subsidiaries';. (a) The Company
shall, and shall cause each Subsidiary to, preserve and maintain its corporate
existence. The Company will preserve and keep in force and effect, and cause
each Subsidiary to preserve and keep in force and effect, all licenses, permits
and franchises necessary to the proper conduct of its business. Notwithstanding
anything contained herein to the contrary, so long as no Default or Event of
Default has occurred and is continuing, the Company may dissolve any
Non-Material Subsidiary so long as such dissolution would not result in a
material adverse change in the business, financial condition or Properties of
the Company and its Subsidiaries or impair the rights or benefits of the Lenders
under the Loan Documents.
(b) The Company shall cause each Material Subsidiary, whether now or
hereafter existing, to furnish the Agent (i) a Guaranty Agreement from such
Material Subsidiary in the form or substantially in the form attached hereto as
Exhibit E hereto or in such other form as is reasonably satisfactory to the
Agent and the Required Lenders as to form and substance, and (ii) documentation
acceptable to the Agent similar to in form and scope to that described in
Sections 7.2(a)(ii), 7.2(a)(iii), 7.2(a), (iv) 7.2(d) and 7.2(e) and 7.2(c) but
relating to such Guarantor and its Guaranty Agreement.
.c2.Section 8.2. Maintenance of Properties;. The Company will maintain,
preserve and keep its Properties in good repair, working order and condition
(ordinary wear and tear excepted) and will from time to time make all needful
and proper repairs, renewals, replacements, additions and betterments thereto so
that at all times the efficiency thereof shall be fully preserved and
maintained, and will cause each Subsidiary to do so in respect of Property owned
or used by it.
.c2.Section 8.3. Taxes and Assessments;. The Company will duly pay and
discharge, and will cause each Subsidiary to duly pay and discharge, all taxes,
rates, assessments, fees and governmental charges upon or against it or its
Properties, in each case before the same become delinquent and before penalties
accrue thereon, unless and to the extent that the same are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and adequate reserves are provided therefor.
.c2.Section 8.4. Insurance;. The Company will insure and keep insured,
and will cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Company will insure, and cause each Subsidiary to insure,
such other hazards and risks (including employers' and public liability risks)
with good and responsible insurance companies as and to the extent usually
insured by Persons similarly situated and conducting similar businesses. The
Company will upon request of the Agent and any Lender furnish a certificate
setting forth in summary form the nature and extent of the insurance maintained
pursuant to this Section.
.c2.Section 8.5. Financial Reports;. (a) The Company will, and will
cause each Subsidiary to, maintain a standard system of accounting in
accordance with GAAP and will furnish to the Agent, each Lender and
each of their duly authorized representatives such information
respecting the business and financial condition of the Company and
its Subsidiaries as the Agent or such Lender may reasonably request;
and without any request, will furnish to the Lenders:
(i) within 50 days after the end of each of the first three
quarterly fiscal periods of the Company, a copy of the Company's Form
10-Q Report filed with the SEC;
(ii) within 120 days after the end of each fiscal year of the
Company, a copy of the Company's Form 10-K Report filed with the SEC,
including a copy of the annual audit report of the Company and the
Subsidiaries for such year with accompanying financial statements,
prepared by the Company and certified by Coopers & Xxxxxxx or any
other independent public accountants of recognized national standing
selected by the Company and satisfactory to the Required Lenders, in
accordance with GAAP;
(iii) not later than 10 days after the receipt thereof, a copy of
any final management letters on internal accounting controls for the
Company or any Subsidiary prepared by its independent public
accountants;
(iv) promptly after sending or filing thereof, copies of all
proxy statements, financial statements and reports which the Company
sends to its shareholders, and copies of all other regular, periodic
and special reports and all registration statements which the Company
files with the SEC or any successor thereto, or with any national
securities exchange;
(v) promptly after knowledge thereof shall have come to the
attention of any responsible officer of the Company, written notice of
any threatened or pending litigation or governmental proceeding or
labor controversy against the Company or any Subsidiary which, if
adversely determined, would materially and adversely effect the
financial condition, Properties, business or operations of the Company
or any Subsidiary or of the occurrence of any Default or Event of
Default hereunder; and
(vi) as soon as possible and in any event within 10 days after
the date on which
(X) a Non-Material Subsidiary becomes a Material Subsidiary, (Y)
the Company or any Subsidiary establishes or acquires any Subsidiary
or (Z) any Subsidiary is dissolved or otherwise merged out of
existence, the Company shall furnish the Lenders an updated Schedule
6.2 reflecting such event.
(b) In the event the Company is no longer required to file Form 10-Q
and 10-K Reports with the SEC, the Company need not furnish such Reports to the
Lenders, but shall nonetheless provide the Lenders the financial statements
previously contained in such Reports by the times required by subsections (a)(i)
and (ii) above.
(c) Each of the financial statements furnished to the Lenders
pursuant to clauses (a) or (b) of this Section shall be accompanied by a written
certificate in the form attached hereto as Exhibit C (the "Compliance
Certificate") signed by the chief financial officer of the Company to the effect
that to the best of the chief financial officer's knowledge and belief no
Default or Event of Default has occurred during the period covered by such
statements or, if any such Default or Event of Default has occurred during such
period, setting forth a description of such Default or Event of Default and
specifying the action, if any, taken by the Company to remedy the same. Such
certificate shall also set forth the calculations supporting such statements in
respect of Sections 8.6, 8.7, 8.8, 8.9 and 8.10 of this Agreement and identify
the Special Post-Closing Acquisition Liabilities then reflected in computing
compliance with such Section 8.6.
.c2.Section 8.6. Current Ratio;. The Company will at all times maintain
a Current Ratio of not less than 1.40 to 1.00.
.c2.Section 8.7. Interest Coverage Ratio;. The Company will, as of the
last day of each fiscal quarter of the Company, maintain the ratio (the
"Interest Coverage Ratio") of EBIT for the four fiscal quarters of the Company
then ended to Interest Expense for the same four fiscal quarters then ended of
not less than 2.0 to 1.0; provided, however, that if an Acquisition permitted by
Section 8.14 hereof occurs at any time during such period, the Interest Coverage
Ratio shall be calculated on a pro forma basis to include the EBIT and Interest
Expense of the Person or assets so acquired for the entire period as if such
Acquisition had taken place on the first day of such period, all as reasonably
calculated by the Company (any expected cost savings relating to the EBIT of the
Person or assets so acquired may be incorporated in these calculations to the
extent they are readily quantifiable and verifiable, in a manner consistent with
the Company's prior pro forma calculations included with SEC filings in
connection with its prior acquisitions).
.c2.Section 8.8. Tangible Net Worth;. The Company will, as of the last
day of each fiscal quarter of the Company, maintain Tangible Net Worth at not
less than the Minimum Required Amount. For purposes of this Section 8.8, the
term "Minimum Required Amount" shall mean, as of any time, the sum of: (i)
$25,000,000; plus (ii) fifty percent (50%) of Consolidated Net Income for each
fiscal quarter of the Company (if Consolidated Net Income for such fiscal
quarter is positive) completed on or after April 1, 1997.
.c2.Section 8.9. Debt to Earnings Ratio;. The Company will, as of the
last day of each fiscal quarter of the Company, maintain the Debt to Earnings
Ratio at not greater than 3.5 to 1.0; provided, however, that if an Acquisition
permitted by Section 8.14 hereof occurs at any time during the four fiscal
quarter period over which EBITDA is measured to determine the Debt to Earnings
Ratio, such Debt to Earnings Ratio shall be calculated on a pro forma basis to
include the EBITDA of the Person or assets so required for the entire period as
if such Acquisition had taken place on the first day of such period, all as
reasonably calculated by the Company (the expected cost savings relating to the
EBITDA of the Person or assets so acquired may be incorporated in these
calculations to the extent they are readily quantifiable and verifiable and
based on reasonable assumptions.
.c2.Section 8.10. Leverage Ratio;. The Company will, as of the last day
of each fiscal quarter of the Company, maintain the Leverage Ratio at not more
than 0.40 to 1.00.
.c2.Section 8.11. Indebtedness for Borrowed Money;. The Company will
not, nor will it permit any Subsidiary to, issue, incur, assume,
create or have outstanding any Indebtedness for Borrowed Money;
provided, however, that the foregoing provisions shall not restrict
nor operate to prevent: (a) the indebtedness of the Company on the
Notes and other Obligations; (b) Capitalized Lease Obligations in an
aggregate amount not to exceed $1,500,000 at any one time
outstanding; (c) Capitalized Lease Obligations of any Subsidiary
which has become a Subsidiary as a result of an Acquisition permitted
by Section 8.14 hereof if such Capitalized Lease Obligation was
entered into prior to the Acquisition of such Subsidiary and was not
created in contemplation of such Acquisition; (d) purchase money
indebtedness secured by Liens permitted by Section 8.12(d) hereof in
an aggregate amount not to exceed $2,000,000 at any one time
outstanding; (e) purchase money indebtedness (other than purchase
money indebtedness permitted by Section 8.11(d) hereof) of any
Subsidiary which has become a Subsidiary as a result of an
Acquisition permitted by Section 8.14 hereof if such indebtedness was
created prior to the Acquisition of such Subsidiary and was not
created in contemplation of such Acquisition; (f) the currently
outstanding indebtedness described on Exhibit C hereof if and so long
as such indebtedness is Subordinated Indebtedness; (g) unsecured
Subordinated Indebtedness incurred to finance Acquisitions permitted
by Section 8.14 hereof; (h) indebtedness under the Long-Term Credit
Agreement; and (i) indebtedness not otherwise permitted by this
Section aggregating not more than $500,000 at any one time
outstanding.
.c2.Section 8.12. Liens;. The Company will not, nor will it permit any
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by the Company or any Subsidiary; provided, however, that this
Section shall not apply to nor operate to prevent: (a) Liens arising by statute
in connection with worker's compensation, unemployment insurance, old age
benefits, social security obligations, taxes, assessments, statutory obligations
or other similar charges, good faith cash deposits in connection with tenders,
contracts or leases to which the Company or any Subsidiary is a party or other
cash deposits required to be made in the ordinary course of business, provided
in each case that the obligation is not for borrowed money and that the
obligation secured is not overdue or, if overdue, is being contested in good
faith by appropriate proceedings which prevent enforcement of the matter under
contest and adequate reserves have been established therefor; (b) mechanics',
workmen's, materialmen's, landlords', carriers', or other similar Liens arising
in the ordinary course of business with respect to obligations which are not due
or which are being contested in good faith by appropriate proceedings which
prevent enforcement of the matter under contest; (c) the pledge of assets for
the purpose of securing an appeal, stay or discharge in the course of any legal
proceeding, provided that the aggregate amount of liabilities of the Company and
its Subsidiaries secured by a pledge of assets permitted under this clause,
including interest and penalties thereon, if any, shall not be in excess of
$1,000,000 at any one time outstanding; and (d) purchase money Liens securing
indebtedness permitted by Section 8.11(d) hereof in respect of equipment now
owned or hereafter acquired by the Company or any Subsidiary (not extending to
any other Property), or Liens on equipment so acquired (not extending to any
other Property) existing at the time of acquisition thereof, or renewals,
extensions and refundings of any such Liens (not extending to any other
Property), provided that the principal amount of indebtedness secured by any
such Lien shall not exceed 80% of the cost or fair market value, whichever is
less, of the Property covered by such Lien at the time of the creation thereof
or the acquisition of such Property.
.c2.Section 8.13. Investments, Loans, Advances and Guaranties;. The
Company will not, nor will it permit any Subsidiary to, directly or indirectly,
make, retain or have outstanding any investments (whether through purchase of
stock or obligations or otherwise) in, or loans or advances (other than for
travel advances and other similar cash advances made to employees in the
ordinary course of business) to, any other Person, or be or become liable as
endorser, guarantor, surety or otherwise for any debt, obligation or undertaking
of any other Person, or otherwise agree to provide funds for payment of the
obligations of another, or supply funds thereto or invest therein or otherwise
assure a creditor of another against loss or apply for or become liable to the
issuer of a letter of credit which supports an obligation of another, or
subordinate any claim or demand it may have to the claim or demand of any other
Person; provided, however, that the foregoing provisions shall not apply to nor
operate to prevent: (a) investments in direct obligations of the United States
of America or of any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States of America,
provided that any such obligations shall mature within one year of the date of
issuance thereof; (b) investments in commercial paper (including as such,
investments in short-term corporate borrowings against tax-advantaged preferred
stock) rated at least P-1 by Xxxxx'x Investors Services, Inc. and at least A-1
by Standard & Poor's Corporation maturing within 270 days of the date of
issuance thereof; (c) investments in certificates of deposit issued by any
United States commercial Agent having capital and surplus of not less than
$100,000,000 which have a maturity of one year or less; (d) endorsement of items
for deposit or collection of commercial paper received in the ordinary course of
business; (e) Acquisitions of Subsidiaries permitted by Section 8.14 hereof; (f)
investments in obligations of a state, a territory, or a possession of the
United States, or any political subdivision of any of the foregoing or of the
District of Columbia as described in Section 103(a) of the Code if these
investments are graded in the highest major grade as determined by at least one
national rating service or are credit enhanced by credit enhancers whose credit
is rated not less than A-1 by Standard & Poor's Corporation or P-1 by Xxxxx'x
Investors Services, Inc.; (g) the Company's guaranty of indebtedness of
Wholly-Owned Subsidiaries incurred to finance Acquisitions permitted by Section
8.14 hereof if and so long as such guaranty is Subordinated Indebtedness; (h)
guaranties by Subsidiaries of the Obligations; and (i) investments, loans,
advances and guarantees not otherwise permitted by this Section aggregating not
more than $2,000,000 at any one time outstanding. In determining the amount of
investments, loans, advances and guarantees permitted under this Section,
investments shall always be taken at the original cost thereof (regardless of
any subsequent appreciation or depreciation therein), loans and advances shall
be taken at the principal amount thereof then remaining unpaid and guarantees
shall be taken at the amount of obligations guaranteed thereby.
.c2.Section 8.14. Acquisitions;. The Company will not, and will not
permit any Subsidiary to, make or commit to make any Acquisitions; provided
however, that the Company and any Wholly-Owned Subsidiary each may make
Acquisitions if: (i) the Company or such Subsidiary acquires by reason of such
Acquisition either (x) assets used or useful in a business which is the same or
similar to that currently conducted by the Company or (y) the capital stock of a
corporation or any other equity interest of any partnership or other firm
engaged in such a same or similar business and after giving effect to such
Acquisition, the corporation, partnership or other such firm so acquired becomes
a Wholly-Owned Subsidiary; (ii) no Default or Event of Default exists or would
exist at the time of or after giving effect to such Acquisition; (iii) the
Company provides the Lenders a statement, certified as true and correct by its
chief financial officer, which represents and warrants that, after giving effect
to such Acquisition, the Company will, on a pro forma basis, continue to comply
through the Termination Date with Sections 8.6, 8.7, 8.8, 8.9, 8.10 and 8.11
hereof, such certificate to be accompanied by supporting financial projections
based on reasonable assumptions; (iv) the Board of Directors or other governing
body of such Person whose property or voting stock is being so acquired has
approved the terms of such Acquisition; and (v) the Company has provided the
Lenders such financial and other information regarding the Person whose property
or voting stock is being so acquired, including historical financial statements,
and a description of such Person, as the Agent or any Lender may reasonably
request.
.c2.Section 8.15. Sales and Leasebacks;. The Company will not, nor will
it permit any Subsidiary to, enter into any arrangement with any bank, insurance
company or any other lender or investor providing for the leasing by the Company
or any Subsidiary of any Property theretofore owned by it and which has been or
is to be sold or transferred by such owner to such lender or investor.
.c2.Section 8.16. Dividends and Certain Other Restricted Payments;. The
Company will not during any fiscal year (a) declare or pay any dividends on or
make any other distributions in respect of any class or series of its capital
stock (other than dividends payable solely in its capital stock) or (b) directly
or indirectly purchase, redeem or otherwise acquire or retire any of its capital
stock (except out of the proceeds of, or in exchange for, a substantially
concurrent issue and sale of its capital stock) (each such non-excepted
declaration or payment of dividends, purchase, redemption, retirement and
distribution in respect to capital stock being herein collectively called a
"Restricted Payment") if at the time of such Restricted Payment or immediately
after giving effect thereto, any Event of Default or Default shall occur or be
continuing.
.c2.Section 8.17. Mergers, Consolidations and Sales;. The Company will
not, nor will it permit any Subsidiary to, be a party to any merger or
consolidation, or sell, transfer, lease or otherwise dispose of all or any
substantial part of its Property (except for sales of inventory in the ordinary
course of business), or in any event sell or discount (with or without recourse)
any of its notes or accounts receivable; provided, however, that this Section
shall not apply to nor operate to prohibit (i) the merger of any Subsidiary
acquired as a result of an Acquisition permitted by Section 8.14 hereof with and
into the Company or any Wholly-Owned Subsidiary or (ii) the sale of assets which
are no longer used or useful in the ordinary course of the Company's business. A
sale or disposition of assets of the Company shall be deemed substantial for the
foregoing purposes (i) if such assets are sold below the book value of such
assets, and such assets constituted 10% or more of the total assets of the
Company or (ii) such assets constituted 20% or more of the total assets of the
Company.
.c2.Section 8.18. ERISA;. The Company will, and will cause each
Subsidiary to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed might result
in the imposition of a Lien against any of its Properties. The Company will, and
will cause each Subsidiary to, promptly notify the Agent of (i) the occurrence
of any reportable event (as defined in ERISA) with respect to a Plan, (ii)
receipt of any notice from the PBGC of its intention to seek termination of any
Plan or appointment of a trustee therefor, (iii) its intention to terminate or
withdraw from any Plan, and (iv) the occurrence of any event with respect to any
Plan which would result in the incurrence by the Company or any Subsidiary of
any material liability, fine or penalty, or any material increase in the
contingent liability of the Company or any Subsidiary with respect to any
post-retirement Welfare Plan benefit.
.c2.Section 8.19. Compliance with Laws;. The Company will, and will
cause each Subsidiary to, comply in all respects with the requirements of all
federal, state and local laws, rules, regulations, ordinances and orders
applicable to or pertaining to the Properties or business operations of the
Company or any Subsidiary, non-compliance with which could have a material
adverse effect on the financial condition, Properties, business or operations of
the Company or any Subsidiary or could result in a Lien upon any of their
Property.
.c2.Section 8.20. Burdensome Contracts With Affiliates;. The Company
will not, nor will it permit any Subsidiary to, enter into any contract,
agreement or business arrangement with any of its Affiliates on terms and
conditions which are less favorable to the Company or such Subsidiary than would
be usual and customary in similar contracts, agreements or business arrangements
between Persons not affiliated with each other, other than any contract,
agreement or business arrangement with any Person which becomes a Subsidiary as
a result of an Acquisition permitted by Section 8.14 hereof after the date
hereof if such contract, agreement or arrangement was entered into prior to the
acquisition of such Subsidiary and such contract, agreement or arrangement was
not created in contemplation of such Acquisition.
.c2.Section 8.21. No Changes in Fiscal Year;. Neither the Company nor
any Subsidiary will change its fiscal year from its present basis without the
prior written consent of the Agent.
.c2.Section 8.22. Inspection and Field Audit;. The Company will, and
will cause each Subsidiary to, permit the Agent and its duly authorized
representatives and agents to visit and inspect any of the Properties, corporate
books and financial records of the Company and each Subsidiary, to examine and
make copies of the books of accounts and other financial records of the Company
and each Subsidiary, and to discuss the affairs, finances and accounts of the
Company and each Subsidiary with, and to be advised as to the same by, its
officers and independent public accountants (and by this provision the Company
authorizes such accountants to discuss with the Agent the finances and affairs
of the Company and of each Subsidiary) with reasonable notice to the Company and
at such reasonable times and reasonable intervals as the Agent may designate.
After the occurrence of an Event of Default, the Company shall pay for all costs
and expenses incurred by the Agent in connection with any such visitation or
inspection.
.c2.Section 8.23. Formation of Subsidiaries;. Except for existing
Subsidiaries designated on Schedule 6.2 hereto and Subsidiaries acquired in
Acquisitions or formed to effect Acquisitions in each case permitted by Section
8.14 hereof, the Company will not, and will not permit any Subsidiary to, form
or acquire any Subsidiary without the prior written consent of the Agent.
.c2.Section 8.24. Subordinated Indebtedness;. The Company shall not,
and shall not permit any Subsidiary to: (a) amend or modify any of the terms or
conditions relating to any Subordinated Indebtedness; (b) make any voluntary
prepayment on, or effect any voluntary redemption of, any Subordinated
Indebtedness if any Loans are outstanding at the time of or after giving effect
to such prepayment or redemption; or (c) make any other payment on account of
any Subordinated Indebtedness which is prohibited under the terms of any
instrument or agreement subordinating such indebtedness to the Obligations.
.c2.Section 8.25. Use of Proceeds;. The proceeds of the initial advance
hereunder shall be used to pay the Company's indebtedness under the Existing
Credit Agreement.
.C1.SECTION 9.
EVENTS OF DEFAULT AND REMEDIES;. .c2.Section 9.1. Events of Default.; Any one or
more of the following shall constitute an "Event of Default" hereunder:
(a) default in the payment when due of all or any part of the principal
of or interest on any Note (whether at the stated maturity thereof or at any
other time provided for in this Agreement) or of any fee or other Obligation
payable by the Company hereunder or under any other Loan Document; or
(b) default in the observance or performance of any covenant set forth
in Sections 8.5, 8.6, 8.7, 8.8, 8.9, 8.10, 8.11, 8.13, 8.14, 8.15, 8.16, 8.17,
8.24 or 8.25 hereof; or
(c) default in the observance or performance of any other provision
hereof or of any other Loan Document which is not remedied within ten (10) days
after the earlier of (i) the date on which such failure shall first become known
to any officer of the Company or (ii) written notice thereof is given to the
Company by the Agent or any Lender; or
(d) any representation or warranty made
by the Company herein or in any other Loan Document, or in any statement or
certificate furnished by it pursuant hereto or thereto, or in connection with
any extension of credit made hereunder, proves untrue in any material respect as
of the date of the issuance or making thereof; or
(e) any event occurs or condition exists (other than those described in
subsections (a) through (d) above) which is specified as an event of default
under any of the other Loan Documents, or any of the Loan Documents shall for
any reason not be or shall cease to be in full force and effect, or any of the
Loan Documents is declared to be null and void; or
(f) default shall occur under any Indebtedness for Borrowed Money
issued, assumed or guaranteed by the Company or any Subsidiary, or under any
indenture, agreement or other instrument under which the same may be issued, and
such default shall continue for a period of time sufficient to permit the
acceleration of the maturity of any such Indebtedness for Borrowed Money
(whether or not such maturity is in fact accelerated), or any such Indebtedness
for Borrowed Money shall not be paid when due (whether by lapse of time,
acceleration or otherwise); or
(g) any judgment or judgments, writ or writs, or warrant or warrants of
attachment, or any similar process or processes in an aggregate
amount in excess of $1,000,000 in excess of amounts covered by insurance from an
insurer which has acknowledged its liability thereon shall be entered or filed
against the Company or any Subsidiary or against any of their Property and which
remains unvacated, unbonded, unstayed or unsatisfied for a period of sixty (60)
days; or
(h) the Company or any member of its Controlled Group shall fail to pay
when due an amount or amounts aggregating in excess $500,000 which it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice
of intent to terminate a Plan or Plans having aggregate Unfunded Vested
Liabilities in excess of $500,000 (collectively, a "Material Plan") shall be
filed under Title IV of ERISA by the Company or any other member of its
Controlled Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any Material Plan or a proceeding
shall be instituted by a fiduciary of any Material Plan against the Company or
any member of its Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA
and such proceeding shall not have been dismissed within 30 days thereafter; or
a condition shall exist by reason of which the PBGC would be entitled to obtain
a decree adjudicating that any Material Plan must be terminated; or (i)
dissolution or termination of the existence of the Company or any Subsidiary; or
(j) the Company or any Subsidiary shall (i) have entered involuntarily
against it an order for relief under the United States Bankruptcy Code, as
amended, (ii) not pay, or admit in writing its inability to pay, its debts
generally as they become due, (iii) make an assignment for the benefit of
creditors, (iv) apply for, seek, consent to, or acquiesce in, the appointment of
a receiver, custodian, trustee, examiner, liquidator or similar official for it
or any substantial part of its Property, (v) institute any proceeding seeking to
have entered against it an order for relief under the United States Bankruptcy
Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, adjustment or composition of it or
its debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (vi) take any
corporate action in furtherance of any matter described in parts (i) through (v)
above, or (vii) fail to contest in good faith any appointment or proceeding
described in Section 9.1(k) hereof; or
(k) a custodian, receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Company or any Subsidiary or any substantial
part of any of their Property, or a proceeding described in Section 9.1(j)(v)
shall be instituted against the Company or any Subsidiary, and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of 60 days.
.c2.Section 9.2. Non-Bankruptcy Defaults.; When any Event of Default
described in subsection (a) through (i), both inclusive, of Section 9.1 has
occurred and is continuing, the Agent shall, upon the request of the Required
Lenders, by notice to the Company, take one or more of the following actions:
(a) terminate the obligations of the Lenders to extend any further
credit hereunder on the date (which may be the date thereof) stated in such
notice;
(b) declare the principal of and the accrued interest on the Notes to
be forthwith due and payable and thereupon the Notes, including both principal
and interest and all fees, charges and other Obligations payable hereunder and
under the other Loan Documents, shall be and become immediately due and payable
without further demand, presentment, protest or notice of any kind; and
(c) enforce any and all rights and remedies available to it under the
Loan Documents or applicable law.
.c2.Section 9.3. Bankruptcy Defaults;. When any Event of Default
described in subsection (j) or (k) of Section 9.1 has occurred and is
continuing, then the Notes, including both principal and interest, and all fees,
charges and other Obligations payable hereunder and under the other Loan
Documents, shall immediately become due and payable without presentment, demand,
protest or notice of any kind, and the obligations of the Lenders to extend
further credit pursuant to any of the terms hereof shall immediately terminate.
In addition, the Agent may exercise any and all remedies available to it under
the Loan Documents or applicable law.
.C1.SECTION 10. THE AGENT.
.c2.Section 10.1. Appointment and Authorization.; Each Lender hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers hereunder and under the other Loan Documents as are
designated to the Agent by the terms hereof and thereof together with such
powers as are reasonably incidental thereto. The Lenders expressly agree that
the Agent is not acting as a fiduciary of the Lenders in respect of the Loan
Documents, the Company or otherwise, and nothing herein or in any of the other
Loan Documents shall result in any duties or obligations on the Agent or any of
the Lenders except as expressly set forth herein. The Agent may resign at any
time by sending 20 days prior written notice to the Company and the Lenders. In
the event of any such resignation, the Required Lenders may appoint a new agent
after consultation with the Company, which shall succeed to all the rights,
powers and duties of the Agent hereunder and under the other Loan Documents. Any
resigning Agent shall be entitled to the benefit of all the protective
provisions hereof with respect to its acts as an agent hereunder, but no
successor Agent shall in any event be liable or responsible for any actions of
its predecessor. If the Agent resigns and no successor is appointed, the rights
and obligations of such Agent shall be automatically assumed by the Required
Lenders and the Company shall be directed to make all payments due each Lender
hereunder directly to such Lender.
.c2.Section 10.2. Rights as a Lender;. The Agent has and reserves all
of the rights, powers and duties hereunder and under the other Loan Documents as
any Lender may have and may exercise the same as though it were not the Agent
and the terms "Lender" or "Lenders" as used herein and in all of such documents
shall, unless the context otherwise expressly indicates, include the Agent in
its individual capacity as a Lender.
.c2.Section 10.3. Standard of Care;. The Lenders acknowledge that they
have received and approved copies of the Loan Documents and such other
information and documents concerning the transactions contemplated and financed
hereby as they have requested to receive and/or review. The Agent makes no
representations or warranties of any kind or character to the Lenders with
respect to the validity, enforceability, genuineness, perfection, value, worth
or collectibility hereof or of the Notes or any of the other Obligations or of
any of the other Loan Documents. Neither the Agent nor any director, officer,
employee, agent or representative thereof (including any security trustee
therefor) shall in any event be liable for any clerical errors or errors in
judgment, inadvertence or oversight, or for action taken or omitted to be taken
by it or them hereunder or under the other Loan Documents or in connection
herewith or therewith except for its or their own gross negligence or willful
misconduct. The Agent shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, certificate,
warranty, instruction or statement (oral or written) of anyone (including anyone
in good faith believed by it to be authorized to act on behalf of the Company),
unless it has actual knowledge of the untruthfulness of same. The Agent may
execute any of its duties hereunder by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders for the default or
misconduct of any such agents or attorneys-in-fact selected with reasonable
care. The Agent shall be entitled to advice of counsel concerning all matters
pertaining to the agencies hereby created and its duties hereunder, and shall
incur no liability to anyone and be fully protected in acting upon the advice of
such counsel. The Agent shall be entitled to assume that no Default or Event of
Default exists unless notified to the contrary by a Lender. The Agent shall in
all events be fully protected in acting or failing to act in accord with the
instructions of the Required Lenders. The Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall be indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by the Agent by reason of taking or continuing to take any
such action. The Agent may treat the owner of any Note as the holder thereof
until written notice of transfer shall have been filed with the Agent signed by
such owner in form satisfactory to the Agent. Each Lender acknowledges that it
has independently and without reliance on the Agent or any other Lender and
based upon such information, investigations and inquiries as it deems
appropriate made its own credit analysis and decision to extend credit to the
Company. It shall be the responsibility of each Lender to keep itself informed
as to the creditworthiness of the Company and the Agent shall have no liability
to any Lender with respect thereto.
.c2.Section 10.4. Costs and Expenses;. Each Lender agrees to reimburse
the Agent for all costs and expenses suffered or incurred by the Agent or any
security trustee in performing its duties hereunder and under the other Loan
Documents, or in the exercise of any right or power imposed or conferred upon
the Agent hereby or thereby, to the extent that the Agent is not promptly
reimbursed for same by the Company, all such costs and expenses to be borne by
the Lenders ratably in accordance with the amounts of their respective Revolving
Credit Commitments.
.c2.Section 10.5. Indemnity;. The Lenders shall ratably indemnify and
hold the Agent, and its directors, officers, employees, agents and
representatives (including as such any security trustee therefor) harmless from
and against any liabilities, losses, costs and expenses suffered or incurred by
them hereunder or under the other Loan Documents or in connection with the
transactions contemplated hereby or thereby, regardless of when asserted or
arising, except to the extent they are promptly reimbursed for the same by the
Company and except to the extent that any event giving rise to a claim was
caused by the gross negligence or willful misconduct of the party seeking to be
indemnified.
.C1.SECTION 11. MISCELLANEOUS.
.c2.Section 11.1. Withholding Taxes;. (a) Payments Free of Withholding.
Except as otherwise required by law and subject to Section 11.1(b) hereof, each
payment by the Company under this Agreement and under any other Loan Document
shall be made without withholding for or on account of any present or future
taxes (other than overall net income taxes on the recipient) imposed by or
within the jurisdiction in which the Company is domiciled, any jurisdiction from
which the Company makes any payment, or (in each case) any political subdivision
or taxing authority thereof or therein. If any such withholding is so required,
the Company shall make the withholding, pay the amount withheld to the
appropriate governmental authority before penalties attach thereto or interest
accrues thereon and forthwith pay such additional amount as may be necessary to
ensure that the net amount actually received by each Lender and the Agent free
and clear of such taxes (including such taxes on such additional amount) is
equal to the amount which that Lender or the Agent (as the case may be) would
have received had such withholding not been made. If the Agent or any Lender
pays any amount in respect of any such taxes, penalties or interest, the Company
shall reimburse the Agent or such Lender for that payment on demand in the
currency in which such payment was made. If the Company pays any such taxes,
penalties or interest, it shall deliver official tax receipts evidencing that
payment or certified copies thereof to the Lender or Agent on whose account such
withholding was made (with a copy to the Agent if not the recipient of the
original) on or before the thirtieth day after payment.
(b) U.S. Withholding Tax Exemptions. Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Company and the Agent on or before the earlier of the date the
initial Borrowing is made hereunder and 30 days after the date hereof, two duly
completed and signed copies of either Form 1001 (relating to such Lender and
entitling it to a complete exemption from withholding under the Code on all
amounts to be received by such Lender, including fees, pursuant to the Loan
Documents and the Loans) or Form 4224 (relating to all amounts to be received by
such Lender, including fees, pursuant to the Loan Documents and the Loans) of
the United States Internal Revenue Service. Thereafter and from time to time,
each Lender shall submit to the Company and the Agent such additional duly
completed and signed copies of one or the other of such Forms (or such successor
forms as shall be adopted from time to time by the relevant United States taxing
authorities) as may be (i) requested by the Company in a written notice,
directly or through the Agent, to such Lender and (ii) required under
then-current United States law or regulations to avoid or reduce United States
withholding taxes on payments in respect of all amounts to be received by such
Lender, including fees, pursuant to the Loan Documents or the Loans.
(c) Inability of Lenders to Submit Forms. If any Lender determines,
as a result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to submit to
the Company or the Agent any form or certificate that such Lender is obligated
to submit pursuant to subsection (b) of this Section 11.1 or that such Lender is
required to withdraw or cancel any such form or certificate previously submitted
or any such form or certificate otherwise becomes ineffective or inaccurate,
such Lender shall promptly notify the Company and Agent of such fact and the
Lender shall to that extent not be obligated to provide any such form or
certificate and will be entitled to withdraw or cancel any affected form or
certificate, as applicable.
.c2.Section 11.2. Non-Business Days. ; If any payment hereunder becomes
due and payable on a day which is not a Business Day, the due date of such
payment shall be extended to the next succeeding Business Day on which date such
payment shall be due and payable. In the case of any payment of principal
falling due on a day which is not a Business Day, interest on such principal
amount shall continue to accrue during such extension at the rate per annum then
in effect, which accrued amount shall be due and payable on the next scheduled
date for the payment of interest.
.c2.Section 11.3. No Waiver, Cumulative Remedies. ; No delay or failure
on the part of any Lender or on the part of any holder of any of the Obligations
in the exercise of any power or right shall operate as a waiver thereof or as an
acquiescence in any default, nor shall any single or partial exercise of any
power or right preclude any other or further exercise thereof or the exercise of
any other power or right. The rights and remedies hereunder of the Lenders and
any of the holders of the Obligations are cumulative to, and not exclusive of,
any rights or remedies which any of them would otherwise have.
.c2.Section 11.4. Waivers, Modifications and Amendments;. Any provision
hereof or of any of the other Loan Documents may be amended, modified, waived or
released and any Default or Event of Default and its consequences may be
rescinded and annulled upon the written consent of the Required Lenders;
provided, however, that without the consent of all Lenders no such amendment,
modification or waiver shall increase the amount or extend the term of any
Lender's Revolving Credit Commitment or reduce the amount of any principal of or
interest rate applicable to, or extend the maturity of, any Obligation owed to
it or reduce the amount of the fees to which it is entitled hereunder or change
this Section or change the definition of "Required Lenders" or change the number
of Lenders required to take any action hereunder or under any of the other Loan
Documents or permit the Company to assign any of its rights hereunder or release
any Guarantor from its obligations under its Guaranty. No amendment,
modification or waiver of the Agent's protective provisions shall be effective
without the prior written consent of the Agent.
.c2.Section 11.5. Costs and Expenses;. The Company agrees to pay on
demand the costs and expenses of the Agent in connection with the negotiation,
preparation, execution and delivery of this Agreement, the other Loan Documents
and the other instruments and documents to be delivered hereunder or thereunder,
and in connection with the transactions contemplated hereby or thereby, and in
connection with any consents hereunder or waivers or amendments hereto or
thereto, including the fees and expenses of Messrs. Xxxxxxx and Xxxxxx, counsel
for the Agent, with respect to all of the foregoing (whether or not the
transactions contemplated hereby are consummated; provided, however, in no event
shall the Company's obligation to reimburse the Agent for such fees (exclusive
of such counsel's expenses and disbursements) in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other
Loan Documents to be delivered as a condition precedent to initial funding of
the credit contemplated hereby exceed $20,000. The Company further agrees to pay
to Agent and the Lenders and any other holders of the Obligations all costs and
expenses (including court costs, the allocated costs of inhouse counsel and
outside attorneys' fees), if any, incurred or paid by the Agent, the Lenders or
any other holders of the Obligations in connection with any Default or Event of
Default or in connection with the enforcement of this Agreement or any of the
other Loan Documents or any other instrument or document delivered hereunder or
thereunder. The Company further agrees to indemnify and save the Lenders, the
Agent and any security trustee for the Lenders harmless from any and all
liabilities, losses, costs and expenses incurred by the Lenders or the Agent in
connection with any action, suit or proceeding brought against the Agent, or any
security trustee or any Lender by any Person (but excluding attorneys' fees for
litigation solely between the Lenders to which the Company is not a party) which
arises out of the transactions contemplated or financed hereby or out of any
action or inaction by the Agent, any security trustee or any Lender hereunder or
thereunder, except for such thereof as is caused by the gross negligence or
willful misconduct of the party seeking to be indemnified. The provisions of
this Section and the protective provisions of Section 2 hereof shall survive
payment of the Obligations.
.c2.Section 11.6. Documentary Taxes.; The Company agrees to pay on
demand any documentary, stamp or similar taxes payable in respect of this
Agreement or any other Loan Document, including interest and penalties, in the
event any such taxes are assessed, irrespective of when such assessment is made
and whether or not any credit is then in use or available hereunder.
.c2.Section 11.7. Survival of Representations.; All representations and
warranties made herein or in any of the other Loan Documents or in certificates
given pursuant hereto or thereto shall survive the execution and delivery of
this Agreement and the other Loan Documents, and shall continue in full force
and effect with respect to the date as of which they were made as long as any
credit is in use or available hereunder.
.c2.Section 11.8. Survival of Indemnities.; All indemnities and other
provisions relative to reimbursement to the Agent and the Lenders of amounts
sufficient to protect the yield of the Agent and the Lenders with respect to the
Loans, including, but not limited to, Sections 2.7, and 2.9 hereof, shall
survive the termination of this Agreement and the payment of the Obligations.
.c2.Section 11.9. Participations;. Any Lender may grant participations
in its extensions of credit hereunder to any other Lender or other lending
institution (a "Participant"), provided that (i) no Participant shall thereby
acquire any direct rights under this Agreement, (ii) no Lender shall agree with
a Participant not to exercise any of such Lender's rights hereunder without the
consent of such Participant except for rights which under the terms hereof may
only be exercised by all Lenders and (iii) no sale of a participation in
extensions of credit shall in any manner relieve the selling Lender of its
obligations hereunder.
.c2.Section 11.10. Assignment Agreements;. Each Lender may, from time
to time upon at least 5 Business Days' prior written notice to the Agent, assign
to other commercial lenders part of its rights and obligations under this
Agreement (including without limitation the indebtedness evidenced by the Notes
then owned by such assigning Lender, together with an equivalent proportion of
its Revolving Credit Commitments to make Loans hereunder) pursuant to written
agreements executed by such assigning Lender, such assignee lender or lenders,
the Company and the Agent, which agreements shall specify in each instance the
portion of the indebtedness evidenced by the Notes which is to be assigned to
each such assignee lender and the portion of the Revolving Credit Commitments of
the assigning Lender to be assumed by it (the "Assignment Agreements");
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of the assigning Lender's rights and obligations under
this Agreement and the assignment shall cover the same percentage of such
Lender's Revolving Credit Commitments, Loans and Notes; (ii) each such
assignment shall be made by a Lender which is a lender under the Short-Term
Credit Agreement and shall be made contemporaneously with an assignment of the
same percentage of such Lender's rights and obligations with respect to the
Short-Term Credit Agreement; (iii) unless the Agent otherwise consents, the
aggregate amount of the Revolving Credit Commitments, Loans and Notes of the
assigning Lender being assigned pursuant to each such assignment (determined as
of the effective date of the relevant Assignment Agreement) shall in no event be
less than $5,000,000 and shall be an integral multiple of $1,000,000; (iv) the
Agent and the Company must each consent, which consent shall not be unreasonably
withheld, to each such assignment to a party which was not an original signatory
of this Agreement; and (v) the assigning Lender must pay to the Agent a
processing and recordation fee of $3,000 and any out-of-pocket attorneys' fees
and expenses incurred by the Agent in connection with such Assignment Agreement.
Upon the execution of each Assignment Agreement by the assigning Lender
thereunder, the assignee lender thereunder, the Company and the Agent and
payment to such assigning Lender by such assignee lender of the purchase price
for the portion of the indebtedness of the Company being acquired by it, (i)
such assignee lender shall thereupon become a "Lender" for all purposes of this
Agreement with Revolving Credit Commitments in the amounts set forth in such
Assignment Agreement and with all the rights, powers and obligations afforded a
Lender hereunder, (ii) such assigning Lender shall have no further liability for
funding the portion of its Revolving Credit Commitments assumed by such other
Lender and (iii) the address for notices to such assignee Lender shall be as
specified in the Assignment Agreement executed by it. Concurrently with the
execution and delivery of such Assignment Agreement, the Company shall execute
and deliver Notes to the assignee Lender in the respective amounts of its
Revolving Credit Commitments under the Revolving Credit and new Notes to the
assigning Lender in the respective amounts of its Revolving Credit Commitments
under the Revolving Credit after giving effect to the reduction occasioned by
such assignment, all such Notes to constitute "Notes" for all purposes of this
Agreement and of the other Loan Documents.
.c2.Section 11.11. Notices;. Except as otherwise specified herein, all
notices hereunder shall be in writing (including, without limitation, notice by
telecopy) and shall be given to the relevant party at its address or telecopier
number set forth below, in the case of the Company, or on the appropriate
signature page hereof, in the case of the Lenders and the Agent, or such other
address or telecopier number as such party may hereafter specify by notice to
the Agent and the Company given by United States certified or registered mail,
by telecopy or by other telecommunication device capable of creating a written
record of such notice and its receipt. Notices hereunder to the Company shall be
addressed to:
to the Company at:
0000 Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy (in case of notices of default) to:
Xxxxxx Xxxxxx & Zavis
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxx Xxxxx Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
to the Agent at:
Xxxxxx Trust and Savings Bank
X.X. Xxx 000
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section and a confirmation of such telecopy has been received
by the sender, (ii) if given by mail, five (5) days after such communication is
deposited in the mail, certified or registered with return receipt requested,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the addresses specified in this Section; provided that any notice given pursuant
to Section 1 or Section 2 hereof shall be effective only upon receipt.
.c2.Section 11.12. Construction;. The parties hereto acknowledge and
agree that this Agreement and the other Loan Documents shall not be construed
more favorably in favor of one than the other based upon which party drafted the
same, it being acknowledged that all parties hereto contributed substantially to
the negotiation of this Agreement and the other Loan Documents. NOTHING
CONTAINED HEREIN SHALL BE DEEMED OR CONSTRUED TO PERMIT ANY ACT OR OMISSION
WHICH IS PROHIBITED BY THE TERMS OF ANY OF THE OTHER LOAN DOCUMENTS, THE
COVENANTS AND AGREEMENTS CONTAINED HEREIN BEING IN ADDITION TO AND NOT IN
SUBSTITUTION FOR THE COVENANTS AND AGREEMENTS CONTAINED IN THE OTHER LOAN
DOCUMENTS.
.c2.Section 11.13. Headings;. Section headings used in this Agreement
are for convenience of reference only and are not a part of this Agreement for
any other purpose.
.c2.Section 11.14. Severability of Provisions.; Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. All rights, remedies and powers provided in this Agreement and the
other Loan Documents may be exercised only to the extent that the exercise
thereof does not violate any applicable mandatory provisions of law, and all the
provisions of this Agreement and the other Loan Documents are intended to be
subject to all applicable mandatory provisions of law which may be controlling
and to be limited to the extent necessary so that they will not render this
Agreement or the other Loan Documents invalid or unenforceable.
.c2.Section 11.15 Counterparts.; This Agreement may be executed in any
number of counterparts, and by different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
.c2.Section 11.16. Entire Understanding;. This Agreement together with
the other Loan Documents constitute the entire understanding of the parties with
respect to the subject matter hereof and any prior agreements, whether written
or oral, with respect thereto are superseded hereby except for prior
understandings related to fees payable to the Agent upon the initial closing of
the transactions contemplated hereby.
.c2.Section 11.17. Binding Nature, Governing Law, Etc;. This Agreement
shall be binding upon the Company and its successors and assigns, and shall
inure to the benefit of the Agent and the Lenders and the benefit of their
successors and assigns, including any subsequent holder of an interest in the
Obligations. The Company may not assign its rights hereunder without the written
consent of the Lenders. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES
HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
.c2.'Section 11.18. Submission to Jurisdiction; Waiver of Jury Trial';.
The Company hereby submits to the non-exclusive jurisdiction of the United
States District Court for the Northern District of Illinois and of any Illinois
State court sitting in the City of Chicago for purposes of all legal proceedings
arising out of or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby. The Company irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum. THE COMPANY, THE AGENT, AND EACH LENDER HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall constitute a contract between us for the uses and
purposes hereinabove set forth.
Dated as of this 30th day of June, 1998.
Signature;
ANICOM, INC.
By
Name:................................
Title:...............................
Accepted and Agreed to at Chicago, Illinois as of the day and year last
above written.
Each of the Lenders hereby agrees with each other Lender that if it
should receive or obtain any payment (whether by voluntary payment, by
realization upon collateral, by the exercise of rights of set-off or banker's
lien, by counterclaim or cross action, or by the enforcement of any rights under
this Agreement, any of the other Loan Documents or otherwise) in respect of the
Obligations in a greater amount than such Lender would have received had such
payment been made to the Agent and been distributed among the Lenders as
contemplated by Section 3.4 hereof then in that event the Lender receiving such
disproportionate payment shall purchase for cash without recourse from the other
Lenders an interest in the Obligations of the Company to such Lenders in such
amount as shall result in a distribution of such payment as contemplated by
Section 3.4 hereof. In the event any payment made to a Lender and shared with
the other Lenders pursuant to the provisions hereof is ever recovered from such
Lender, the Lenders receiving a portion of such payment hereunder shall restore
the same to the payor Lender, but without interest. Amount and Percentage of
Commitments:
Revolving Credit
Commitment:
$15,000,000
XXXXXX TRUST AND SAVINGS BANK
By
Its Vice President
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Revolving Credit
Commitment:
$12,500,000
THE FIRST NATIONAL BANK OF CHICAGO
By
Its........................................................
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Revolving Credit
Commitment:
$12,500,000
LASALLE NATIONAL BANK
By
Its....................................
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Revolving Credit
Commitment:
$10,000,000
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By
Its........................................................
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
EXHIBIT A
ANICOM, INC.
SHORT-TERM REVOLVING CREDIT NOTE
Chicago, Illinois
$___________ __________, 199___
On the Revolving Credit Termination Date, for value received, the
undersigned, ANICOM, INC., a Delaware corporation (the "Company"), hereby
promises to pay to the order of ____________________ (the "Lender"), at the
principal office of Xxxxxx Trust and Savings Bank in Chicago, Illinois, the
principal sum of (i) ________________________ and no/100 Dollars ($___________),
or (ii) such lesser amount as may at the time of the maturity hereof, whether by
acceleration or otherwise, be the aggregate unpaid principal amount of all Loans
owing from the Company to the Lender under the Revolving Credit provided for in
the Credit Agreement hereinafter mentioned.
This Note evidences loans constituting part of a "Domestic Rate
Portion" and "LIBOR Portions" as such terms are defined in that certain
Short-Term Credit Agreement dated as of June 30, 1998, between the Company,
Xxxxxx Trust and Savings Bank, individually and as Agent thereunder, and the
other Lenders which are now or may from time to time hereafter become parties
thereto (said Credit Agreement, as the same may be amended, modified or restated
from time to time, being referred to herein as the " Credit Agreement") made and
to be made to the Company by the Lender under the Revolving Credit provided for
under the Credit Agreement, and the Company hereby promises to pay interest at
the office described above on each loan evidenced hereby at the rates and at the
times and in the manner specified therefor in the Credit Agreement.
Each loan made under the Revolving Credit provided for in the Credit
Agreement by the Lender to the Company against this Note, any repayment of
principal hereon, the status of each such loan from time to time as part of the
Domestic Rate Portion or a LIBOR Portion and, in the case of any LIBOR Portion,
the interest rate and Interest Period applicable thereto shall be endorsed by
the holder hereof on a schedule to this Note or recorded on the books and
records of the holder hereof (provided that such entries shall be endorsed on a
schedule to this Note prior to any negotiation hereof). The Company agrees that
in any action or proceeding instituted to collect or enforce collection of this
Note, the entries so endorsed on a schedule to this Note or recorded on the
books and records of the holder hereof shall be prima facie evidence of the
unpaid principal balance of this Note, the status of each such loan from time to
time as part of the Domestic Rate Portion or a LIBOR Portion, and, in the case
of any LIBOR Portion, the interest rate and Interest Period applicable thereto.
This Note is issued by the Company under the terms and provisions of
the Credit Agreement, and this Note and the holder hereof are entitled to all of
the benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement. All capitalized terms used herein without definition shall have the
same meanings herein as such terms are defined in the Credit Agreement.
The Company hereby promises to pay all costs and expenses (including
attorneys' fees) suffered or incurred by the holder hereof in collecting this
Note or enforcing any rights in any collateral therefor. The Company hereby
waives presentment for payment and demand. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF ILLINOIS
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANICOM, INC.
By:
Name:......................................................
Title:.....................................................
EXHIBIT B
COMPLIANCE CERTIFICATE
To: Xxxxxx Trust and Savings Bank, as Agent under, and the Lenders party
to, the Credit Agreement described below
This Compliance Certificate is furnished to the Agent and the Lenders
pursuant to that certain Short-Term Credit Agreement dated as of June
30, 1998, by and among Anicom, Inc. (the "Company") and you (the
"Credit Agreement"). Unless otherwise defined herein, the terms used
in this Compliance Certificate have the meanings ascribed thereto in
the Credit Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________________________ of the
Company;
2. I have reviewed the terms of the Credit Agreement and I have
made, or have caused to be made under my supervision, a detailed
review of the transactions and conditions of the Company and its
Subsidiaries during the accounting period covered by the attached
financial statements;
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or the
occurrence of any event which constitutes a Default or Event of
Default during or at the end of the accounting period covered by
the attached financial statements or as of the date of this
Certificate, except as set forth below; 4. The financial
statements required by Section 8.5 of the Credit Agreement and
being furnished to you concurrently with this Certificate are
true, correct and complete as of the date and for the periods
covered thereby; and 5. The Attachment hereto sets forth
financial data and computations evidencing the Company's
compliance with certain covenants of the Credit Agreement, all of
which data and computations are, to the best of my knowledge,
true, complete and correct and have been made in accordance with
the relevant Sections of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Company has taken, is taking, or proposes to
take with respect to each such condition or event:
======================================================================
======================================================================
The foregoing certifications, together with the computations set forth
in the Attachment hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _________ day of
__________________ 19___.
.................................................................
..............................., ..............................
(Print or Type Name) (Title)
ATTACHMENT TO COMPLIANCE CERTIFICATE
ANICOM, INC.
Compliance Calculations for Credit Agreement
Dated as of June 30, 1998
Calculations as of _____________, 19___
---------------------------------------------------------------------------
A. CURRENT RATIO (SECTION 8.6)
1. Total current assets (including ..................
prepaid expenses)
2. Total current liabilities ..................
3. Special Post-Closing Acquisition ..................
Liabilities
4. Line 2 minus Line 3 ..................
5. Ratio of Line 1 to Line 4
("Current Ratio")
6. As listed in Section ___, the Current Ratio
shall not be less than 1:40 : 1
7. Company is in Compliance?
(Circle Yes or No)
B. INTEREST COVERAGE RATIO (SECTION 8.7)
1. Consolidated Net Income as defined ..................
2. Amounts deducted in arriving at
Consolidated Net Income in respect of
(a) Interest Expense ..................
(b) Federal, state and local
income taxes ..................
3. Sum of Lines 1, 2(a) and 2(b)
("EBIT")
4. Interest Expense
5. Ratio of EBIT (Line 3)
to Interest Expense (Line 4) ("Interest
Coverage Ratio") :1
6. As listed in Section 8.7, for
the date of this Certificate,
the Interest Coverage
Ratio shall not be less than 2:0 : 1
7. Company is in compliance?
(Circle yes or no) Yes/No
C. TANGIBLE NET WORTH (SECTION 8.8)
1. Shareholders' Equity ..................
2. Less
(a) Notes receivable
from officers and
employees
(b) Intangible Assets ..................
3. Line 1 minus Lines 2(a) and 2(b)
("Tangible Net Worth") .................
4. As required by Section 8.8,
Tangible Net Worth must not be less than
Minimum Required Amount
(a) Consolidated Net Income ..................
(b) .50 X Line 4(a) ..................
(c) Line 4(b) plus the $_________
Minimum Required
Amount for the immediately
preceding fiscal quarter
("Minimum Required Amount")
5. Company is in compliance? (Circle yes or no) Yes/No
=========
D. DEBT TO EARNINGS RATIO (SECTION 8.9)
1. Total Funded Debt ..................
2. EBITDA (Line B3 plus amounts charged
for depreciation, amortization and Fiscal 1997
Charges)
3. Ratio of Line 1 to Line 2
("Debt to Earnings Ratio") : 1.0
-------------
4. As listed in Section 8.9,
Debt to Earnings Ratio
must not be greater than 3:5 : 1.0
-------------
5. Company is in compliance? (Circle yes or no) Yes/No
=========
E. LEVERAGE RATIO (SECTION 8.10)
1. Total Funded Debt ..................
2. Shareholders' Equity
3. Line 1 plus Line 2
4. Total Capitalization
(from Line E3 above) ..................
5. Ratio of Line 1 to Line 4
("Leverage Ratio") :1
7. As listed in Section 8.10, for
the date of this Certificate,
the Leverage Ratio shall not
be greater than 0.40 :1
8. Company is in compliance?
(Circle yes or no) Yes/No
F. SPECIAL POST-CLOSING ACQUISITION LIABILITIES.
The following summarizes the Special Post-Closing Acquisition
Liabilities used in computing compliance with the current ratio (Section
8.6):___________________________
___________________________________________________________________________
---------------------------------------------------------------------------
NATURE OF RESERVE DATE CREATED AMOUNT
SCHEDULE 6.2
MATERIAL SUBSIDIARIES
JURISDICTION OF PERCENTAGE
NAME INCORPORATION OWNERSHIP
None
NON-MATERIAL SUBSIDIARIES
JURISDICTION OF PERCENTAGE
NAME INCORPORATION OWNERSHIP
Xxxxxx Hill Supply Company, Inc. New York 100%
Anicom-Carolina, Inc. Delaware 100%
Anicom-Norfolk, Inc. Delaware 100%
Anicom-Security, Inc. Delaware 100%
Northern Wire & Cable, Inc. Delaware 100%
Norther Connectivity Corp. Michigan 100%
EXHIBIT C
SUBORDINATED INDEBTEDNESS
INTEREST BALANCE AS
INSTRUMENT RATE OF 3/31/97 MATURITY
Note payable to Xxxxxx Xxxxxxxxxxx 8.55% $2,000,000 In equal installments on March 12 of 1998 and 1999
Note payable to Xxxxx Xxxxxxx prime $577,778 In monthly installments through July 1, 2002
Notes payable to former shareholders
of Southern Alarm Supply 8.00% $250,553 In monthly installments through May 30, 1998
Notes payable to Xxxxxxx Xxxxxxx 8.00% $333,334 In equal installments on October 27 of 1997 and 1998
Notes payable to Xxxxxxx Xxxxxxxx
and Xxxxxx Xxxxxx 8.75% $200,000 Single installment payable on October 27, 1997
Note payable to Xxxxx Xxxxxxx 6.04% $74,500 In equal monthly installments through December, 1998
Note payable to Xxxxx Xxxxxxx 6.77% to 8.00% $300,000 On demand
EXHIBIT D
SUBORDINATION PROVISIONS APPLICABLE TO
SUBORDINATED DEBT
(a) The indebtedness evidenced by the subordinated notes1 and any
renewals or extensions thereof (hereinafter called "Subordinated Indebtedness"),
shall at all times be wholly subordinate and junior in right of payment to any
and all credit and other indebtedness, obligations and liabilities of the
Company to the lenders (collectively the "Lenders") and their agent (each, an
"Agent") under or in connection with (i) that certain Long-Term Credit Agreement
dated as of June 30, 1998 by and among the Company, Xxxxxx Trust and Savings
Bank, individually ("Xxxxxx") and as Agent for the Lenders thereunder and other
Lenders from time to time party thereto and (ii) that certain Short-Term Credit
Agreement dated as of June 30, 1998 by and among the Company, Xxxxxx Trust and
Savings Bank, individually and as Agent for the Lenders thereunder and other
Lenders from time to time party thereto, in each case howsoever evidenced,
whether now existing or hereafter created or arising, whether direct or
indirect, absolute or contingent, or joint or several, as any of the same may be
modified, supplemented or amended from time to time (hereinafter called
"Superior Indebtedness"), in the manner and with the force and effect hereafter
set forth:
(1) In the event of any liquidation, dissolution or winding up of the
Company of in the event of any execution sale, receivership, insolvency,
bankruptcy, liquidation, readjustment, reorganization or other similar
proceeding relative to the Company or its properties, then in any such event the
holders of any and all Superior Indebtedness shall be preferred in the payment
of their claims over the holder or holders of the Subordinated Indebtedness, and
such Superior Indebtedness shall be first paid and satisfied in full before any
payment or distribution of any kind or character, whether in cash, property or
securities shall be made upon the Subordinated Indebtedness; and in any such
event any dividend or distribution of any kind or character, whether in cash,
property or securities which shall be made upon or in respect of the
Subordinated Indebtedness, or any renewals or extensions hereof, shall be paid
over to the holders of such Superior Indebtedness, pro rata, for application in
payment thereof unless and until such Superior Indebtedness shall have been paid
and satisfied in full;
(2) Without limiting any of the other provisions hereof, in the event
that the Subordinated Indebtedness is declared or becomes due and payable
because of the occurrence of any event of default hereunder (or under the
agreement or indenture, as appropriate) or for any other reason other than at
the option of the Company, under circumstances when the foregoing clause (1)
shall not be applicable, the holders of the Subordinated Indebtedness shall be
entitled to payments only after there shall first have been paid in full all
Superior Indebtedness outstanding at the time the Subordinated Indebtedness so
becomes due and payable because of any such event, or payment shall have been
provided for in a manner satisfactory to the holders of such Superior
Indebtedness;
(3) No payment on account of principal of, premium, if any, or
interest on the Subordinated Indebtedness shall be made, nor shall any assets be
applied to the purchase or other acquisition or retirement of the Subordinated
Indebtedness, unless full payment of amounts then due on all Superior
Indebtedness has been made or duly provided for, and no payment on account of
principal of, premium, if any, or interest on the Subordinated Indebtedness
shall be made, nor shall any assets be applied to the purchase or other
acquisition or retirement of the Subordinated Indebtedness, if at the time of
such payment or application or immediately after giving effect thereto, there
shall exist a default in the payment of any amount due on any Superior
Indebtedness;
(4) If there shall have occurred a default (other than a default in
the payment of any amount due) with respect to any issue of Superior
Indebtedness, as defined therein or in the instrument under which the same has
been issued, permitting the holders thereof, after notice or lapse of time, or
both, to accelerate the maturity thereof, and any such holders as constitute a
sufficient number or hold a sufficient amount of such Superior Indebtedness as
to have the right to so accelerate the maturity thereof (the "Notifying
Debtholders") shall give written notice of the default to the Company (a
"Default Notice"), then, unless and until such default shall have been cured or
waived, no payment on account of principal of, premium, if any, or interest on
the Subordinated Indebtedness shall be made, nor shall any assets be applied to
the purchase or other acquisition or retirement of the Subordinated
Indebtedness, at any time during the 180 days immediately following the delivery
of the Default Notice to the Company (the "Blockage Period"); provided that if,
during the Blockage Period the Notifying Debtholders shall have accelerated the
maturity of the Superior Indebtedness held by such Notifying Debtholders, or
shall have taken such action as is necessary under the governing agreement or
instrument to accelerate the maturity of such Superior Indebtedness (subject
only to the expiration of a grace period not exceeding 30 days), then the
Blockage Period shall be extended for any such grace period and thereafter for
so long as such acceleration shall continue to be in effect and judicial
proceedings shall be pending with respect thereto, the Notifying Debtholders
shall be in the process of foreclosing or otherwise collecting or realizing on
collateral for such Superior Indebtedness or the Notifying Debtholders shall
otherwise be pursuing collection procedures in good faith. At the expiration of
such Blockage Period, (i) the Company shall, absent the occurrence prior to
payment thereof by the Company of any event set forth in Section 1 or 3 hereof,
pay to the holders of the Subordinated Indebtedness all amounts which would have
been payable other than by reason of acceleration during the Blockage Period and
(ii) if the default referred to in the Default Notice shall continue to exist
and shall not have been waived, then the Notifying Debtholders shall be
permitted to submit a new Default Notice respecting such event of default. If,
during any Blockage Period, a subsequent Default Notice is served respecting an
event or events of default which were in existence and known to such Notifying
Debtholder on the first day of the pre-existing Blockage Period, then the
Blockage period triggered by the subsequent Default Notice shall terminate at
the same time as the pre-existing Blockage Period;
(5) Any holders of Subordinated Indebtedness shall not without the
prior written consent of the holders of the Superior Indebtedness take any
collateral for any Subordinated Indebtedness, whether from the Company or any
other party, nor take any guaranties for any Subordinated Indebtedness, from any
party, in each case if and so long as the terms of any of the Superior
Indebtedness prohibit such liens or guaranties. Without limiting the effect of
any of the other provisions of this Agreement, any interest in or lien on any
assets or properties of the Company or any other party which may
(notwithstanding the foregoing agreement) be held or hereafter acquired by or on
behalf of any holder of Subordinated Indebtedness as security for any
Subordinated Indebtedness is and shall be absolutely and unconditionally subject
and subordinate in all respects to any security interest or lien which may be
held or hereafter acquired by or on behalf of the holders of Superior
Indebtedness in the same such assets or properties as security for any Superior
Indebtedness notwithstanding the time of attachment of any interest therein or
lien thereon or the filing of any financing statement or any other priority
provided by law or by agreement; and
(6) The holders of Subordinated Indebtedness shall not take any
action to enforce collection of the Subordinated Indebtedness or to foreclose or
otherwise realize upon any security or guaranty given to secure or guaranty the
Subordinated Indebtedness and the Company and any such guarantor shall not make
any payment in respect of the Subordinated Indebtedness, in each case during any
Blockage Period, or otherwise unless the Company shall, 180 days prior to the
taking of any such action, have provided the holders of Superior Indebtedness
with notice of the occurrence of the default giving rise to such action. Any
provisions of this Section 6 to the contrary notwithstanding, the restriction
contained in this Section shall no longer apply upon the first to occur of the
following: (i) the institution of bankruptcy proceedings by or against the
Company; (ii) the acceleration of the Superior Indebtedness; or (iii) the
payment or other satisfaction of all of the Superior Indebtedness. The holders
of the Subordinated Indebtedness agree to accept a cure from the Lenders of any
default with respect to any Subordinated Indebtedness (with the same force and
effect as if such cure were timely provided by the Company or the appropriate
obligor) at any time during the period during which the holders of the
Subordinated Indebtedness agree not to act pursuant to this Section and if any
such default is cured during any such period shall be rescinded and annulled all
with the same effect as though such default had not occurred and the rate of
interest on such Subordinated Indebtedness shall accrue during such period at
the applicable predefault rate.
(7) The holders of Subordinated Indebtedness undertake and agree for
the benefit of each holder of Superior Indebtedness to execute, verify, deliver
and file any proofs of claim, consents, assignments or other instruments which
any holder of Superior Indebtedness may at any time require in order to prove
and realize upon any rights or claims pertaining to the subordinated notes and
to effectuate the full benefit of the subordination contained herein; and upon
failure of the holder of any subordinated note so to do, any such holder of
Superior Indebtedness shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the holder of such note to execute, verify, deliver and file
any such proofs of claim, consents, assignments or other instrument.
(8) No right of any holder of any Superior Indebtedness to enforce
subordination as herein provided shall at any time or in any way be affected or
impaired by any failure to act on the part of the Company or the holders of
Superior Indebtedness, or by any noncompliance by the Company with any of the
terms, provisions and covenants of the subordinated notes or the agreement under
which they are issued, regardless of any knowledge thereof that any such holder
of Superior Indebtedness may have or be otherwise charged with.
(9) The Company agrees, for the benefit of the holders of Superior
Indebtedness, that in the event that any subordinated note is declared due and
payable before its expressed maturity because of the occurrence of a default
hereunder, (i) the Company will provide prompt notice in writing of such
happening to the holders of Superior Indebtedness and (ii) a holder of any
Superior Indebtedness may declare the same to be immediately due and payable,
regardless of the expressed maturity thereof.
(10) To the extent that the Company makes any payment on the Superior
Indebtedness which is subsequently invalidated, declared to be fraudulent or
preferential, set aside or is required to be repaid to a trustee, receiver or
any other party under any bankruptcy act, state or Federal law, common law or
equitable cause (such payment being hereinafter referred to as a "Voided
Payment"), then to the extent of such Voided Payment that portion of the
Superior Indebtedness which had been previously satisfied by such Voided Payment
shall be revived and continue in full force and effect as if such Voided Payment
has never been made. In the event that a Voided Payment is recovered from the
holders of the Superior Indebtedness, a default in the payment of Superior
Indebtedness specified in paragraph (a)(3) of these subordination provisions
shall be deemed to have existed and to be continuing from the date of the
initial receipt by the holders of the Superior Indebtedness of such Voided
Payment until the full amount of such Voided Payment is fully and finally
restored to the holder of the Superior Indebtedness and until such time these
subordination provisions shall be in full force and effect.
(11) In the event that any payment or distribution of assets is made to
any holder of subordinated notes in contravention of these subordination
provisions, such payment or distribution shall be received and held by such
holder in trust for the benefit of the holders of the then outstanding Superior
Indebtedness and shall, forthwith upon receipt thereof, be paid or distributed
to the holders of the Superior Indebtedness, pro rata, for application in
payment thereof.
(12) The foregoing provisions are solely for the purpose of defining
the relative rights of the holders of Superior Indebtedness on the one hand, and
the holders of the Subordinated Indebtedness on the other hand, and nothing
herein shall impair, as between the Company and the holders of the Subordinated
Indebtedness, the obligation of the Company, which is unconditional and
absolute, to pay the principal of and premium, if any, and interest on the
Subordinated Indebtedness in accordance with their terms, nor shall anything
herein prevent the holders of the Subordinated Indebtedness from exercising all
remedies otherwise permitted by applicable law or hereunder upon default
hereunder, subject to the rights of the holders of Superior Indebtedness as
herein provided for.
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Or debentures or other designation as may be appropriate.
EXHIBIT E
GUARANTY
This Guaranty Agreement, dated as
of ____________, ____, made
by ____________
_________________________________,
a _________________
organized under the laws of
_________________ (the
"Guarantor"); WITNESSETH:
WHEREAS, Anicom, Inc., a Delaware corporation (the "Borrower"), Xxxxxx
Trust and Savings Bank ("Xxxxxx"), individually and as Agent (Xxxxxx acting as
such agent and any successor or successors to Xxxxxx in such capacity being
hereinafter referred to as the "Agent"), and the lenders from time to time party
thereto (Xxxxxx and such other lenders being hereinafter referred to
collectively as the "Lenders" and individually as a "Lender") have entered into
a Short-Term Credit Agreement dated as of June 30, 1998 (such Credit Agreement
as the same may from time to time hereafter be modified or amended being
hereinafter referred to as the "Credit Agreement") pursuant to which the Lenders
have extended various credit facilities to the Borrower (the Agent and the
Lenders being hereinafter referred to collectively as the "Guaranteed Creditors"
and individually as a "Guaranteed Creditor"); and
WHEREAS, the Borrower owns and holds all or substantially all of the
issued and outstanding common capital stock of the Guarantor; and
WHEREAS, it is a condition to the extension of credit by the Lenders
under the Credit Agreement that the Guarantor shall have executed and
delivered this Guaranty; and
WHEREAS, the Borrower has provided and will continue to provide the
Guarantor with business, technical and financial support beneficial to
the proper conduct of the Guarantor's business and the Guarantor will
obtain benefits as a result of the extensions of credit to the
Borrower under the Credit Agreement; and, accordingly, the Guarantor
desires to enter into this Guaranty in order to satisfy the condition
described in the preceding paragraph; and NOW, THEREFORE, in
consideration of the foregoing and other benefits accruing to the
Guarantor, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby makes the following representations
and warranties to the Guaranteed Creditors and hereby covenants and
agrees with the Guaranteed Creditors as follows:
1. The Guarantor hereby unconditionally and irrevocably guarantees
to the Guaranteed Creditors, the due and punctual payment of all present and
future indebtedness of the Borrower evidenced by or arising out of the Credit
Documents (as hereinafter defined), including, but not limited to, (a) the due
and punctual payment of principal of and interest on all notes issued by the
Borrower under the Credit Agreement and any and all notes issued in extension or
renewal thereof or in substitution or replacement therefor (collectively the
"Notes") as and when the same shall become due and payable, whether at stated
maturity, by acceleration or otherwise, and (b) the full and prompt performance
and payment when due of any and all other indebtedness, obligations and
liabilities, whether now existing or hereafter arising, of the Borrower to the
Guaranteed Creditors under or arising out of the Credit Agreement (the Notes,
Credit Agreement and each guaranty executed by another subsidiary of the
Borrower in connection with the Credit Agreement being hereinafter collectively
referred to as the "Credit Documents"). The indebtedness, obligations and
liabilities described in the immediately preceding clauses (a) and (b) are
hereinafter referred to as the "Guaranteed Obligations". In case of failure by
Borrower punctually to pay any indebtedness guaranteed hereby, the Guarantor
hereby unconditionally agrees to make such payment or to cause such payment to
be made punctually as and when the same shall become due and payable, whether at
stated maturity, by acceleration or otherwise, and as if such payment were made
by the Borrower.
2. The obligations of the Guarantor under this Guaranty shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower or of any other
guarantor under the Credit Agreement or any other Credit Document or
by operation of law or otherwise;
(b) any modification or amendment of or supplement to the Credit
Agreement or any other Credit Document;
(c) any change in the corporate existence, structure or ownership
of (including any of the foregoing arising from any merger,
consolidation, amalgamation or similar transaction), or any
insolvency, bankruptcy, reorganization or other similar proceeding
affecting, the Borrower, any other guarantor, or any of their
respective assets, or any resulting release or discharge of any
obligation of the Borrower or of any other guarantor contained in any
Credit Document (it being understood and agreed that the term
"Borrower" as used herein shall mean and include any corporation,
partnership, association or any other entity or organization resulting
from a merger, consolidation, amalgamation or similar transaction
involving the Borrower);
(d) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against any Guaranteed Creditor or any
other person, whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or
demand or any exercise of, or failure to exercise, any rights or
remedies against the Borrower, any other guarantor, any other person
or any of their respective properties;
(f) any application of any sums by whomsoever paid or howsoever
realized to any obligation of the Borrower regardless of what
obligations of the Borrower remain unpaid;
(g) any invalidity or unenforceability relating to or against the
Borrower or any other guarantor for any reason of the Credit Agreement
or of any other Credit Document or any provision of applicable law or
regulation purporting to prohibit the payment by the Borrower or any
other guarantor of the principal of or interest on any Note or any
other amount payable by it under the Credit Documents; or
(h) any other act or omission to act or delay of any kind by any
Guaranteed Creditor or any other person or any other circumstance
whatsoever that might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the obligations of the
Guarantor hereunder. In order to hold the Guarantor liable hereunder,
there shall be no obligation on the part of the Guaranteed Creditors,
at any time, to resort for payment to the Borrower or any other
guarantor, or resort to any collateral, security, property, liens or
other rights or remedies whatsoever, and the Guaranteed Creditors
shall have the right to enforce this Guaranty irrespective of whether
or not other proceedings or steps seeking resort or realization upon
or from any of the foregoing are pending.
3. The Guarantor's obligations hereunder shall remain in full force and
effect until all commitments by the Guaranteed Creditors to extend credit to the
Borrower are terminated and the principal of and interest on the Notes and all
other amounts payable by the Borrower under the Credit Agreement and all other
Credit Documents shall have been paid in full. If at any time any payment of the
principal of or interest on any Note or any other amount payable by the Borrower
under the Credit Documents is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of the Borrower or of
any other guarantor, or otherwise, the Guarantor's obligations hereunder with
respect to such payment shall be reinstated at such time as though such payment
had become due but had not been made at such time.
4. (a) The Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein,
as well as any requirement that at any time any action be taken by the
Agent, any Lender or any other person against the Borrower, another
guarantor or any other person. (b) The Guarantor hereby agrees not to
exercise or enforce any right of exoneration, contribution,
reimbursement, recourse or subrogation available to the Guarantor
against the Borrower or any other guarantor, or as to any security
therefor, unless and until all commitments by the Guaranteed Creditors
to extend credit to the Borrower are terminated and the principal of
and interest on the Notes and all other amounts payable by the
Borrower under the Credit Agreement and all other Credit Documents
shall have been paid in full; and the payment by the Guarantor of any
of its obligations hereunder shall not in any way entitle the
Guarantor to any right, title or interest (whether by way of
subrogation or otherwise) in and to any of the Guaranteed Obligations
or any proceeds thereof or any security therefor unless and until all
commitments by the Guaranteed Creditors to extend credit to the
Borrower are terminated and the principal of and interest on the Notes
and all other amounts payable by the Borrower under the Credit
Agreement and all other Credit Documents shall have been paid in full.
5. Notwithstanding any other provision hereof, the right of recovery of
the Guaranteed Creditors against the Guarantor hereunder shall not exceed $1.00
less than the amount which would render the Guarantor's obligations hereunder
void or voidable under applicable law, including without limitation fraudulent
conveyance law.
6. If acceleration of the time for payment of any amount payable by the
Borrower under the Credit Agreement or any other Credit Document is stayed upon
the insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of the Credit Agreement or the
other Credit Documents shall nonetheless be payable by the Guarantor forthwith
on demand by the Agent made at the request of the Guaranteed Creditors.
7. Any payment of a Guaranteed Obligation required to be made pursuant
to this Guaranty shall be made in the currency which such Guaranteed Obligation
is required to be made in pursuant to the Credit Agreement or such other Credit
Document giving rise to such Guaranteed Obligation.
8. This Guaranty shall be binding upon the Guarantor and its successors
and assigns and shall inure to the benefit of the Guaranteed Creditors and their
successors and assigns. Any Guaranteed Creditor may, to the extent permitted by
the Credit Agreement, sell, transfer or assign its rights in the Guaranteed
Obligations held by it, or any part thereof, or grant participations therein;
and in that event, each and every immediate and successive assignee or
transferee of, or holder or participant in, all or any part of the Guaranteed
Obligations, shall have the right to enforce this Guaranty, by suit or
otherwise, for the benefit of such assignee, transferee, holder or participant
as fully as if such assignee or transferee, holder or participant were herein by
name specifically given such rights, powers and benefits; but each Guaranteed
Creditor shall have an unimpaired right to enforce this Guaranty for its own
benefit or for the benefit of any such participant as to so much of the
Guaranteed Obligations that it has not sold, assigned or transferred.
9. The Guarantor acknowledges that executed (or conformed) copies of
the Credit Agreement and the other Credit Documents have been made available to
its principal executive officers and such officers are familiar with the
contents thereof.
10. Any acknowledgment or new promise, whether by payment of principal
or interest or otherwise and whether by the Borrower, or others (including the
Guarantor), with respect to any of the Guaranteed Obligations shall, if the
statute of limitations in favor of the Guarantor against the Guaranteed
Creditors shall have commenced to run, toll the running of such statute of
limitations, and if the period of such statute of limitations shall have
expired, prevent the operation of such statute of limitations.
11. The records of the Agent and each Lender as to the unpaid balance
of the Guaranteed Obligations at any time and from time to time shall be prima
facie evidence thereof without further or other proof for all purposes,
including the enforcement of this Guaranty and any collateral therefor.
12. Except as otherwise required by law, each payment by the Guarantor
hereunder shall be made without withholding for or on account of any present or
future taxes (other than overall net income taxes on the recipient) imposed by
or within the jurisdiction in which the Guarantor is domiciled, any jurisdiction
from which the Guarantor makes any payment, or (in each case) any political
subdivision or taxing authority thereof or therein. If any such withholding is
so required, the Guarantor shall make the withholding, pay the amount withheld
to the appropriate governmental authority before penalties attach thereto or
interest accrues thereon and forthwith pay such additional amount as may be
necessary to ensure that the net amount actually received by each Guaranteed
Creditor free and clear of such taxes (including such taxes on such additional
amount) is equal to the amount which that Guaranteed Creditor would have
received had such withholding not been made. If any Guaranteed Creditor pays any
amount in respect of any such taxes, penalties or interest the Guarantor shall
reimburse the Guaranteed Creditor for that payment on demand in the currency in
which such payment was made. If the Guarantor pays any such taxes, penalties or
interest, it shall deliver official tax receipts evidencing that payment or
certified copies thereof to the Guaranteed Creditor on whose account such
withholding was made (with a copy to the Agent if not the recipient of the
original) on or before the thirtieth day after payment. If any Guaranteed
Creditor determines it has received or been granted a credit against or relief
or remission for, or repayment of, any taxes paid or payable by it because of
any taxes, penalties or interest paid by the Guarantor and evidenced by such a
tax receipt, such Guaranteed Creditor shall, to the extent it can do so without
prejudice to the retention of the amount of such credit, relief, remission or
repayment, pay to the Guarantor as applicable, such amount as such Guaranteed
Creditor determines is attributable to such deduction or withholding and which
will leave such Guaranteed Creditor (after such payment) in no better or worse
position than it would have been in if the Guarantor had not been required to
make such deduction or withholding. Nothing herein shall interfere with the
right of each Guaranteed Creditor to arrange its tax affairs in whatever manner
it thinks fit nor oblige any Guaranteed Creditor to disclose any information
relating to its tax affairs or any computations in connection with such taxes.
13. Each reference in the Credit Agreement or any other Credit Document
to U.S. Dollars or to an alternative currency (the "relevant currency") is of
the essence. To the fullest extent permitted by law, the obligation of the
Guarantor in respect of any amount due in the relevant currency under the Credit
Agreement shall, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the relevant currency that the Guaranteed Creditor entitled to receive
such payment may, in accordance with normal banking procedures, purchase with
the sum paid in such other currency (after any premium and costs of exchange) on
the business day immediately following the day on which such Guaranteed Creditor
receives such payment. If the amount of the relevant currency so purchased is
less than the sum originally due to such Guaranteed Creditor in the relevant
currency, the Guarantor agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify such Guaranteed Creditor against such loss, and if
the amount of the specified currency so purchased exceeds the sum of (a) the
amount originally due to the relevant Guaranteed Creditor in the specified
currency plus (b) any amounts shared with other Guaranteed Creditors as a result
of allocations of such excess as a disproportionate payment to such Guaranteed
Creditor under Section 3.4 of the Credit Agreement, such Guaranteed Creditor
agrees to remit such excess to the Guarantor.
14. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF ILLINOIS (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS), in which
State it shall be performed by the Guarantor.
15. The obligation of the Guarantor hereunder shall be absolute and
unconditional under all circumstances and irrespective of the validity or the
enforceability of the Guaranteed Obligations and irrespective of any present or
future law of any government or of any agency thereof purporting to reduce,
amend or otherwise affect any of the Guaranteed Obligations. To the extent that
the Guarantor or any of its properties or revenues has or hereafter may acquire
any right of immunity from suit, judgment or execution, the Guarantor hereby
irrevocably waives such right of immunity in respect of its obligations
hereunder and in respect of any action or proceeding, wherever brought, to
enforce any judgment against the Guarantor for breach of any of such
obligations.
16. The Guarantor hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Northern District of Illinois and of
any Illinois State court sitting in the City of Chicago for purposes of all
legal proceedings arising out of or relating to this Guaranty, the Credit
Agreement, the other Credit Documents or the transactions contemplated hereby or
thereby, and consents to the service of process by registered or certified mail
out of any such court or by service of process on the Borrower (now at
__________________________________________________________________) which the
Guarantor hereby irrevocably appoints as its agent to receive, for it and on its
behalf, service of process in any action or proceeding in Illinois. Such service
shall be deemed completed on delivery to such process agent (whether or not it
is forwarded to and received by the Guarantor) provided that notice of such
service of process is given by the Guaranteed Creditors to the Guarantor. If,
for any reason, such process agent ceases to be able to act as such, the
Guarantor irrevocably agrees to appoint a substitute process agent acceptable to
the Agent and to deliver to the Agent a copy of the new agent's acceptance of
that appointment within thirty days. Nothing contained herein shall affect the
right of the Guaranteed Creditors to serve legal process in any other manner or
to bring any proceeding hereunder in any jurisdiction where the Guarantor may be
amenable to suit. The Guarantor irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum. Final judgment (a certified or exemplified copy of which shall be
conclusive evidence of the fact and of the amount of any indebtedness of the
Guarantor to the Guaranteed Creditors therein described) against the Guarantor
in any such legal action or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment. The Guarantor, the Agent, and
each Lender hereby irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or relating to the Guaranty, any Credit Document
or the transactions contemplated hereby or thereby.
17. The Guarantor shall at all times and from time to time do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and
delivered all and singular every such further act, deed, transfer, assignment,
assurance, document and instrument as the Agent or any Lender may reasonably
require for the better accomplishing and effectuating of this Guaranty and the
provisions contained herein, and every officer of the Agent and the Lenders and
each of them are irrevocably appointed attorneys or attorney to execute in the
name and on behalf of the Guarantor any document or instrument for the said
purpose.
18. Except as otherwise defined herein, terms used herein and defined
in the Credit Agreement shall be used herein as so defined. IN WITNESS WHEREOF,
the Guarantor has caused this Guaranty Agreement to be executed and delivered as
of the date first above written.
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By
Its.........................................................
