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Exhibit 4(a)
CREDIT AGREEMENT, dated as of March 7, 2000, among the following:
(I) ROYAL APPLIANCE MFG. CO., an Ohio corporation (herein,
together with its successors and assigns, the "BORROWER");
(II) the lending institutions listed in Annex I hereto (each
a "LENDER" and collectively, the "LENDERS"); and
(III) NATIONAL CITY BANK, a national banking association, as
administrative agent (the "ADMINISTRATIVE AGENT"):
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms used
herein and defined in section 1 are used herein as so defined.
(2) The Borrower has applied to the Lenders for credit facilities in
order to (i) refinance existing credit facilities, (ii) provide financing for
acquisitions, (iii) provide financing for repurchases of shares of the
Borrower's common stock, and (iv) provide working capital and funds for other
lawful purposes.
(3) Subject to and upon the terms and conditions set forth herein,
the Lenders are willing to make available to the Borrower the credit facilities
provided for herein.
NOW, THEREFORE, it is agreed:
SECTION 1. DEFINITIONS AND TERMS.
1.1. CERTAIN DEFINED TERMS. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires:
"ACQUISITION" shall mean and include (i) any acquisition on a going
concern basis (whether by purchase, lease or otherwise) of any facility and/or
business operated by any person who is not a Subsidiary of the Borrower, and
(ii) acquisitions of a majority of the outstanding equity or other similar
interests in any such person (whether by merger, stock purchase or otherwise).
"ADDITIONAL SECURITY DOCUMENT" shall have the meaning specified in
section 8.12.
"ADJUSTED EURODOLLAR RATE" shall mean with respect to each Interest
Period for a Eurodollar Loan, (i) the rate per annum which appears on page 3750
of the Telerate Screen (or on any successor or substitute page, or on any
electronic publication of a recognized service organization providing comparable
rate quotations, in any case as determined from time to time by the
Administrative Agent) as the "LIBOR" rate for Dollar deposits of $1,000,000 in
same day funds for a maturity corresponding to such Interest Period as of 11:00
A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period, divided (and rounded upward to the nearest
1/10,000th of 1%) by (ii) a percentage equal to 100% minus the then stated
maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves and without benefit
of credits for proration, exceptions or offsets which may be available from time
to time) applicable to any member bank of the Federal Reserve System in respect
of Eurocurrency liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D).
In the event that such rate is not available at such time for any
reason, the rate referred to in clause (i) above shall be the interest rate per
annum equal to the average (rounded upward to the nearest 1/10,000th of 1% per
annum), of the rate per annum at which Dollar deposits of $1,000,000 for a
maturity corresponding to the Interest Period are
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offered to each of the Reference Banks by prime banks in the London interbank
Eurodollar market, determined as of 11:00 A.M. (London time) on the date which
is two Business Days prior to the commencement of such Interest Period.
"ADMINISTRATIVE AGENT" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to section 11.9.
"AFFILIATE" shall mean, with respect to any person, any other person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such person. A person shall be deemed to control a second
person if such first person possesses, directly or indirectly, the power (i) to
vote 25% or more of the securities having ordinary voting power for the election
of directors or managers of such second person or (ii) to direct or cause the
direction of the management and policies of such second person, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, (x) a director, officer or employee of a person shall not, solely
by reason of such status, be considered an Affiliate of such person; and (y)
neither the Administrative Agent nor any Lender shall in any event be considered
an Affiliate of the Borrower or any of its Subsidiaries.
"AGREEMENT" shall mean this Credit Agreement, as the same may be from
time to time further modified, amended and/or supplemented.
"ALTERNATIVE CURRENCY" shall mean and include any lawful currency other
than Dollars which is (i) readily and freely transferable and convertible into
Dollars, and (ii) acceptable to any applicable Letter of Credit Issuer.
"APPLICABLE EURODOLLAR MARGIN" shall have the meaning provided in
section 2.7(g).
"APPLICABLE COMMITMENT FEE RATE" shall have the meaning provided in
section 4.1(a).
"APPLICABLE LENDING OFFICE" shall mean, with respect to each Lender,
(i) such Lender's Domestic Lending Office in the case of Borrowings consisting
of Prime Rate Loans and (ii) such Lender's Eurodollar Lending Office in the case
of Borrowings consisting of Eurodollar Loans.
"APPLICABLE PRIME RATE MARGIN" shall have the meaning provided in
section 2.7(g).
"ASSET SALE" shall mean the sale, transfer or other disposition
(including by means of Sale and Lease-Back Transactions, and by means of
mergers, consolidations, and liquidations of a corporation, partnership or
limited liability company of the interests therein of the Borrower or any
Subsidiary) by the Borrower or any Subsidiary to any person other than the
Borrower or any Subsidiary of any of their respective assets, PROVIDED that the
term Asset Sale specifically excludes any sales, transfers or other dispositions
of inventory, or obsolete or excess furniture, fixtures, equipment or other
property, tangible or intangible, in each case in the ordinary course of
business, and PROVIDED, FURTHER, that the term Asset Sale specifically excludes
any sale of accounts receivables (including, without limitation, any related
guaranties, collateral or other credit support) in connection with the Permitted
Receivables Program, which is referred to in section 9.4 hereof.
"ASSIGNMENT AGREEMENT" shall mean an Assignment Agreement substantially
in the form of Exhibit F hereto.
"AUTHORIZED OFFICER" shall mean any officer or employee of the Borrower
designated as such in writing to the Administrative Agent by the Borrower.
"BANKRUPTCY CODE" shall have the meaning provided in section 10.1(h).
"BORROWER" shall have the meaning provided in the first paragraph of
this Agreement.
"BORROWING" shall mean the incurrence of Loans consisting of one Type
of Loan, by the Borrower from all of the Lenders having Commitments in respect
thereof on a PRO RATA basis on a given date (or resulting from Continuations or
Conversions on a given date), having in the case of Eurodollar Loans the same
Interest Period.
"BUSINESS DAY" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the city in which the Payment Office is located a legal holiday or a day
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on which banking institutions are authorized by law or other governmental
actions to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks in U.S. dollar deposits in the interbank
Eurodollar market.
"CAPITAL LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that person.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities identified as "capital lease
obligations" (or any similar words) on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with GAAP.
"CASH EQUIVALENTS" shall mean any of the following:
(i) securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the
United States of America is pledged in support thereof) having
maturities of not more than one year from the date of acquisition;
(ii) U.S. dollar denominated time deposits, certificates of
deposit and bankers' acceptances of (x) any Lender or (y) any bank
whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from Xxxxx'x is at least P-1 or the
equivalent thereof (any such bank, an "APPROVED BANK"), in each case
with maturities of not more than 180 days from the date of acquisition;
(iii) commercial paper issued by any Lender or Approved Bank
or by the parent company of any Lender or Approved Bank and commercial
paper issued by, or guaranteed by, any industrial or financial company
with a short-term commercial paper rating of at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each
thereof, from S&P or Moody's, as the case may be, and in each case
maturing within 270 days after the date of acquisition;
(iv) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in
clauses (i) through (iii) above; and
(v) investments in money market funds access to which is
provided as part of "sweep" accounts maintained with a Lender or an
Approved Bank.
"CASH PROCEEDS" shall mean, with respect to (i) any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by the Borrower and/or any Subsidiary from such Asset
Sale, and (ii) any Event of Loss, the aggregate cash payments, including all
insurance proceeds and proceeds of any award for condemnation or taking,
received in connection with such Event of Loss.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. section 9601 ET SEQ.
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"CHANGE OF CONTROL" shall mean and include any of the following:
(i) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the
Borrower's Board of Directors (together with any new directors whose
election by the Borrower's Board of Directors or whose nomination for
election by the Borrower's shareholders was approved by a vote of at
least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors then in office;
(ii) any person or group (as such term is defined in section
13(d)(3) of the 1934 Act), other than the Borrower, any trustee or
other fiduciary holding securities under an employee benefit plan of
the Borrower and the Current Holder Group, shall acquire, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3 and
13d-5 of the 0000 Xxx) of more than 20%, on a fully diluted basis, of
the economic or voting interest in the Borrower's capital stock;
(iii) the shareholders of the Borrower approve a merger or
consolidation of the Borrower with any other person, OTHER than a
merger or consolidation which would result in the voting securities of
the Borrower outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted or
exchanged for voting securities of the surviving or resulting entity)
more than 75% of the combined voting power of the voting securities of
the Borrower or such surviving or resulting entity outstanding after
such merger or consolidation;
(iv) the shareholders of the Borrower approve a plan of
complete liquidation of the Borrower or an agreement or agreements for
the sale or disposition by the Borrower of all or substantially all of
the Borrower's assets; and/or
(v) any "Change of Control" or similar term as defined in any
agreement or instrument evidencing or governing Indebtedness of the
Borrower in an original aggregate principal amount of at least
$10,000,000.
"CLOSING DATE" shall mean the date, on or after the Effective Date,
upon which the conditions specified in section 6.1 are satisfied. It is expected
that the Closing Date will be March 8, 2000. If the Closing Date is other than
such date, the Administrative Agent will confirm the specific Closing Date in a
written notice to the other parties.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Effective
Date and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
"COLLATERAL" shall mean any collateral covered by any Security
Document.
"COLLATERAL AGENT" shall mean the Administrative Agent acting as
Collateral Agent for the Lenders pursuant to the Security Documents.
"COMMITMENT" shall mean, with respect to each Lender, the amount set
forth opposite such Lender's name in Annex I as its "Commitment" as the same may
be reduced from time to time pursuant to section 4.2, 4.3 and/or 10.2 or
adjusted from time to time as a result of assignments to or from such Lender
pursuant to section 12.4.
"COMMITMENT FEE" shall have the meaning provided in section 4.1(a).
"CONSOLIDATED AMORTIZATION EXPENSE" shall mean, for any period, all
amortization expenses of the Borrower and its Subsidiaries, all as determined
for the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including in all events amounts expended or capitalized under Capital Leases
and Synthetic Leases but excluding any amount representing capitalized interest)
by the Borrower and its Subsidiaries during
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that period that, in conformity with GAAP, are or are required to be included in
the property, plant or equipment reflected in the consolidated balance sheet of
the Borrower and its Subsidiaries.
"CONSOLIDATED DEPRECIATION EXPENSE" shall mean, for any period, all
depreciation expenses of the Borrower and its Subsidiaries, all as determined
for the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated Net
Income for such period; PLUS the sum (without duplication) of the amounts for
such period included in determining such Consolidated Net Income of (i)
Consolidated Interest Expense, (ii) Consolidated Income Tax Expense, (iii)
Consolidated Depreciation Expense, (iv) Consolidated Amortization Expense, and
(v) non cash charges which are impairment, extraordinary or non-recurring, all
as determined for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP; PROVIDED that in determining Consolidated Net Income for
purposes of this definition, there shall be excluded therefrom (x) the income,
(or loss) of any entity (other than Subsidiaries of the Borrower) in which the
Borrower or any of its Subsidiaries has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to the Borrower
or any of its Subsidiaries during such period, and (y) the income of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary; and PROVIDED, FURTHER, that, notwithstanding
anything to the contrary contained herein, the Borrower's Consolidated EBITDA
for any Testing Period shall (x) include the appropriate financial items for any
person or business unit which has been acquired by the Borrower for any portion
of such Testing Period prior to the date of acquisition, and (y) exclude the
appropriate financial items for any person or business unit which has been
disposed of by the Borrower, for the portion of such Testing Period prior to the
date of disposition.
"CONSOLIDATED INCOME TAX EXPENSE" shall mean, for any period, all
provisions for taxes based on the net income of the Borrower or any of its
Subsidiaries (including, without limitation, any additions to such taxes, and
any penalties and interest with respect thereto), all as determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, total
interest expense (including that which is capitalized, that which is
attributable to Capital Leases or Synthetic Leases and the pre-tax equivalent of
dividends payable on Redeemable Preferred Stock) of the Borrower and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries including, without limitation,
expenses relating to the Permitted Receivables Program, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
net costs under Hedge Agreements, all as determined for the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP; PROVIDED that if
for financial reporting purposes the Borrower accounts for interest expenses
(including receivables program expenses) pursuant to the net interest (or any
similar) method of accounting, then Consolidated Interest Expense shall be
computed in the same manner. Notwithstanding the foregoing, in computing
Consolidated Net Interest Expense, there shall be excluded any amortization or
write-off of deferred financing costs and any charges for prepayment penalties
on prepayment of Indebtedness.
"CONSOLIDATED NET INCOME" shall mean for any period, the net income (or
loss) of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP.
"CONSOLIDATED NET WORTH" shall at any time for the determination
thereof all amounts which, in conformity with GAAP, would be included under the
caption "total stockholders' equity" (or any like caption) on a consolidated
balance sheet of the Borrower as at such date, PROVIDED that in no event shall
Consolidated Net Worth include any amounts in respect of Redeemable Stock.
"CONSOLIDATED TOTAL ADJUSTED DEBT" shall mean, at any date of
determination, Consolidated Total Debt, EXCLUSIVE of any portion thereof
representing the unpaid balance of trade receivables subject to the Permitted
Receivables Program.
"CONSOLIDATED TOTAL DEBT" shall mean the sum (without duplication) of
the principal amount (or Capitalized Lease Obligation, in the case of a Capital
Lease, or present value, based on the implicit interest rate, in the case of any
Synthetic Lease, or the higher of liquidation value or stated value, in the case
of Redeemable Stock) of all Indebtedness
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of the Borrower and of each of its Subsidiaries, all as determined on a
consolidated basis, PROVIDED that for purposes of this definition no obligations
under Hedge Agreements shall be considered in determining Consolidated Total
Debt.
"CONTINUE", "CONTINUATION" and "CONTINUED" each refers to a
continuation of Eurodollar Loans for an additional Interest Period as provided
in section 2.8.
"CONVERT", "CONVERSION" and "CONVERTED" each refers to a conversion of
Loans of one Type into Loans of another Type, pursuant to section 2.6, 2.8(b),
2.9 or 5.2.
"CREDIT DOCUMENTS" shall mean this Agreement, the Notes, the Subsidiary
Guaranty, the Security Documents and any Letter of Credit Document.
"CREDIT EVENT" shall mean the making of any Loans and/or the issuance
of any Letter of Credit.
"CREDIT PARTY" shall mean the Borrower and each of its Subsidiaries
which is a party to any Credit Document.
"CURRENT HOLDER GROUP" shall mean (i) those persons who are officers
and directors of the Company at the Effective Date, (ii) the spouses, heirs,
legatees, descendants and blood relatives to the third degree of consanguinity
of any such person, (iii) the executors and administrators of the estate of any
such person, and any court appointed guardian of any such person, (iv) any trust
for the benefit of any such person referred to in the foregoing clauses (i) and
(ii) or any other persons, so long as one or more members of the Current Holder
Group has the exclusive right to control the voting and disposition of
securities held by such trust, and (v) Richmont Capital Partners I L. P. or any
of its Affiliates.
"DEFAULT" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DEFAULTING LENDER" shall mean any Lender with respect to which a
Lender Default is in effect.
"DESIGNATED HEDGE AGREEMENT" shall mean any Hedge Agreement to which
the Borrower or any of its Subsidiaries is a party which, pursuant to a written
instrument signed by the Administrative Agent, has been designated as a
Designated Hedge Agreement so that the Borrower's or Subsidiaries's
counterparty's credit exposure thereunder will be entitled to share in the
benefits of the Subsidiary Guaranty and the Security Documents to the extent the
Subsidiary Guaranty and such Security Documents provide guarantees or security
for creditors of the Borrower or any Subsidiary under Designated Hedge
Agreements. The Administrative Agent may, without the approval or consent of the
Lenders, designate a Hedge Agreement as a Designated Hedge Agreement if the
counterparty is a Lender or an Affiliate of a Lender and the maximum credit
exposure of such counterparty under such Hedge Agreement to the Borrower and its
Subsidiaries, when taken together with the maximum credit exposure under all
other Hedge Agreements which are Designated Hedge Agreements, is reasonably
determined by the Administrative Agent, in accordance with its own customary
valuation practices, not to exceed $4,000,000 in the aggregate; however, if the
counterparty is not a Lender or an Affiliate of a Lender, or such credit
exposure is so determined by the Administrative Agent to be such that the
aggregate credit exposure under all Designated Hedge Agreements would be greater
than $4,000,000 if such Hedge Agreement were to be a Designated Hedge Agreement,
the Administrative Agent shall only designate the Hedge Agreement involving such
counterparty as a Designated Hedge Agreement if the Administrative Agent is
instructed to do so by the Required Lenders, PROVIDED that absent instructions
from all of the Lenders, the maximum aggregate credit exposure, as computed by
the Administrative Agent, under all Designated Hedge Agreements with
counterparties who are not a Lender or an Affiliate of a Lender shall in no
event exceed $1,000,000. The Administrative Agent may impose as a condition to
any designation of a Designated Hedge Agreement a requirement that the
counterparty enter into an intercreditor or similar agreement with the
Administrative Agent under which recoveries from the Borrower and its
Subsidiaries with respect to such Designated Hedge Agreement will be shared in a
manner consistent with the provisions of section 10.3 hereof.
"DOLLARS", "U.S. DOLLARS" and the sign "$" each means lawful money of
the United States.
"DOMESTIC LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its Domestic Lending Office in Annex I or in
the Assignment Agreement pursuant to which it became a Lender, or such other
office of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
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"DOMESTIC SUBSIDIARY" shall mean any Subsidiary organized under the
laws of the United States of America, any State thereof, the District of
Columbia, or any United States possession, the chief executive office and
principal place of business of which is located in, and which conducts the
majority of its business within, the United States of America and its
territories and possessions.
"EFFECTIVE DATE" shall have the meaning provided in section 12.10.
"ELIGIBLE TRANSFEREE" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in SEC
Regulation D), in each case which
(i) is not disapproved in writing by the Borrower in a notice
given to a requesting Lender and the Administrative Agent, specifying
the reasons for such disapproval, within five Business Days following
the giving of notice to the Borrower of the identity of any proposed
transferee (any such disapproval by the Borrower must be reasonable),
PROVIDED that the Borrower shall not be entitled to exercise the
foregoing right of disapproval if and so long as (x) any Event of
Default shall have occurred and be continuing, or (y) a waiver or other
temporary modification of any of the financial covenants contained in
this Agreement shall be in effect following a deterioration in the
financial condition or results of operations of the Borrower and its
Subsidiaries; and
(ii) is not a direct competitor of the Borrower or engaged in
the same or similar principal lines of business as the Borrower and its
Subsidiaries considered as a whole, or is not an Affiliate of any such
competitor of the Borrower and its Subsidiaries.
"ENVIRONMENTAL CLAIMS" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued under any such law
(hereafter "CLAIMS"), including, without limitation, (i) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (ii) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the storage, treatment or Release (as defined
in CERCLA) of any Hazardous Materials or arising from alleged injury or threat
of injury to health, safety or the environment.
"ENVIRONMENTAL LAW" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of common
law now or hereafter in effect and in each case as amended, and any binding and
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment issued to or
rendered against the Borrower or any of its Subsidiaries relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. section 2601 ET SEQ.; the Clean Air Act, 42 U.S.C. section 7401 ET SEQ.;
the Safe Drinking Water Act, 42 U.S.C. section 3803 ET SEQ.; the Oil Pollution
Act of 1990, 33 U.S.C. section 2701 ET SEQ.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 U.S.C. section 11001 ET SEQ., the
Hazardous Material Transportation Act, 49 U.S.C. section 1801 ET SEQ. and the
Occupational Safety and Health Act, 29 U.S.C. section 651 ET SEQ. (to the extent
it regulates occupational exposure to Hazardous Materials); and any state and
local or foreign counterparts or equivalents, in each case as amended from time
to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA AFFILIATE" shall mean each person (as defined in section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of section 414(b),(c),
(m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of
the Borrower being or having been a general partner of such person.
"EURODOLLAR LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its Eurodollar Lending Office in Annex I or
in the Assignment Agreement pursuant to which it became a Lender, or such
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other office or offices for Eurodollar Loans of such Lender as such Lender may
from time to time specify to the Borrower and the Administrative Agent.
"EURODOLLAR LOANS" shall mean each Loan bearing interest at the rates
provided in section 2.7(b).
"EVENT OF DEFAULT" shall have the meaning provided in section 10.1.
"EVENT OF LOSS" shall mean, with respect to any property, (i) the
actual or constructive total loss of such property or the use thereof, resulting
from destruction, damage beyond repair, or the rendition of such property
permanently unfit for normal use from any casualty or similar occurrence
whatsoever, (ii) the destruction or damage of a portion of such property from
any casualty or similar occurrence whatsoever under circumstances in which such
damage cannot reasonably be expected to be repaired, or such property cannot
reasonably be expected to be restored to its condition immediately prior to such
destruction or damage, within 90 days after the occurrence of such destruction
or damage, (iii) the condemnation, confiscation or seizure of, or requisition of
title to or use of, any property, or (iv) in the case of any property located
upon a Leasehold, the termination or expiration of such Leasehold.
"EXISTING INDEBTEDNESS" shall have the meaning provided in section
7.18.
"EXISTING INDEBTEDNESS AGREEMENTS" shall have the meaning provided in
section 7.18.
"EXISTING LETTER OF CREDIT" shall have the meaning provided in section
3.1(d).
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"FEES" shall mean all amounts payable pursuant to, or referred to in,
section 4.1.
"FINANCIAL PROJECTIONS" shall have the meaning provided in section
7.8(c).
"FIXED CHARGE COVERAGE RATIO" shall mean, for any Testing Period, the
ratio of
(i) Consolidated EBITDA for such Testing Period,
TO
(ii) the sum of (A) Consolidated Interest Expense, (B)
Consolidated Income Tax Expense, (C) Consolidated Capital Expenditures,
(D) scheduled or mandatory repayments, prepayments or redemptions of
the principal of Indebtedness and the stated or liquidation value of
Redeemable Stock (exclusive of any required reductions in committed
credit facilities), (E) without duplication of any amount included
under the preceding clause (D), scheduled payments representing the
principal portion of Capitalized Leases and Synthetic Leases, and (F)
the sum of all Restricted Stock Payments by the Borrower which
constitute dividends (I.E., not payments for stock repurchases), if
any, in each case on a consolidated basis for the Borrower and its
Subsidiaries for such Testing Period;
PROVIDED that, notwithstanding anything to the contrary contained herein, the
Borrower's Fixed Charge Coverage Ratio for any Testing Period shall be computed
by giving effect to (x) the inclusion of the appropriate financial items for any
person or business unit which has been acquired by the Borrower for any portion
of such Testing Period prior to the date of acquisition, and (y) the exclusion
of the appropriate financial items for any person or business unit which has
been disposed of by the Borrower, for the portion of such Testing Period prior
to the date of disposition.
"FOREIGN SUBSIDIARY" shall mean any Subsidiary (i) which is not
incorporated in the United States and substantially all of whose assets and
properties are located, or substantially all of whose business is carried on,
outside
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the United States, or (ii) substantially all of whose assets consist of
Subsidiaries that are Foreign Subsidiaries as defined in clause (i) of this
definition.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of section 9,
including defined terms as used therein, are subject (to the extent provided
therein) to sections 1.3 and 12.7(a).
"GUARANTY OBLIGATIONS" shall mean as to any person (without
duplication) any obligation of such person guaranteeing any Indebtedness
("PRIMARY INDEBTEDNESS") of any other person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such person, whether or not contingent, (a) to purchase any such
primary Indebtedness or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary Indebtedness or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary Indebtedness of the
ability of the primary obligor to make payment of such primary Indebtedness, or
(d) otherwise to assure or hold harmless the owner of such primary Indebtedness
against loss in respect thereof, PROVIDED, HOWEVER, that the term Guaranty
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary Indebtedness in respect of which such Guaranty Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such person is required to perform
thereunder) as determined by such person in good faith.
"HEDGE AGREEMENT" shall mean (i) any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect against fluctuations in interest
rates, (ii) any currency swap agreement, forward currency purchase agreement or
similar agreement or arrangement designed to protect against fluctuations in
currency exchange rates, and (iii) any forward commodity purchase agreement or
similar agreement or arrangement designed to protect against fluctuations in
commodity prices.
"HAZARDOUS MATERIALS" shall mean (i) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (ii) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "restricted hazardous materials", "extremely hazardous
wastes", "restrictive hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants" or "pollutants", or words of similar meaning and regulatory
effect, under any applicable Environmental Law.
"INDEBTEDNESS" of any person shall mean without duplication:
(i) all indebtedness of such person for borrowed money;
(ii) all bonds, notes, debentures and similar debt securities
of such person;
(iii) the deferred purchase price of capital assets or
services which in accordance with GAAP would be shown on the liability
side of the balance sheet of such person;
(iv) the face amount of all letters of credit issued for the
account of such person and, without duplication, all drafts drawn
thereunder;
(v) all obligations, contingent or otherwise, of such person
in respect of bankers' acceptances;
(vi) all Indebtedness of a second person secured by any Lien
on any property owned by such first person, whether or not such
indebtedness has been assumed;
(vii) all Capitalized Lease Obligations of such person;
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(viii) the present value, determined on the basis of the
implicit interest rate, of all basic rental obligations under all
Synthetic Leases of such person;
(ix) all obligations of such person to pay a specified
purchase price for goods or services whether or not delivered or
accepted, I.E., take-or-pay and similar obligations;
(x) all net obligations of such person under Hedge Agreements;
(xi) the full outstanding balance of trade receivables, notes
or other instruments sold with full recourse (and the portion thereof
subject to potential recourse, if sold with limited recourse), other
than in any such case any thereof sold solely for purposes of
collection of delinquent accounts;
(xii) the stated value, or liquidation value if higher, of all
Redeemable Stock of such person; and
(xiii) all Guaranty Obligations of such person;
PROVIDED that (x) neither trade payables nor other similar accrued expenses, in
each case arising in the ordinary course of business, nor obligations in respect
of insurance policies or performance or surety bonds which themselves are not
guarantees of Indebtedness (nor drafts, acceptances or similar instruments
evidencing the same nor obligations in respect of letters of credit supporting
the payment of the same), shall constitute Indebtedness; and (y) the
Indebtedness of any person shall in any event include (without duplication) the
Indebtedness of any other entity (including any general partnership in which
such person is a general partner) to the extent such person is liable thereon as
a result of such person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide expressly
that such person is not liable thereon.
"INTEREST PERIOD" with respect to any Eurodollar Loan shall mean the
interest period applicable thereto, as determined pursuant to section 2.8.
"LEASEHOLDS" of any person means all the right, title and interest of
such person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"LENDER" shall have the meaning provided in the first paragraph of this
Agreement.
"LENDER DEFAULT" shall mean (i) the refusal (which has not been
retracted) of a Lender in violation of the requirements of this Agreement to
make available its portion of any incurrence of Loans or to fund its portion of
any unreimbursed payment under section 3.4(c) or (ii) a Lender having notified
the Administrative Agent and/or the Borrower that it does not intend to comply
with the obligations under section 2.1 and/or section 3.4(c), in the case of
either (i) or (ii) as a result of the appointment of a receiver or conservator
with respect to such Lender at the direction or request of any regulatory agency
or authority.
"LENDER REGISTER" shall have the meaning provided in section 12.16.
"LETTER OF CREDIT" shall have the meaning provided in section 3.1(a).
"LETTER OF CREDIT DOCUMENTS" shall have the meaning specified in
section 3.2(a).
"LETTER OF CREDIT FEE" shall have the meaning provided in section
4.1(b).
"LETTER OF CREDIT ISSUER" shall mean (i) in respect of each Existing
Letter of Credit, the Lender that has issued same as of the Effective Date; and
(ii) in respect of any other Letter of Credit, NCB.
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time, the sum,
without duplication, of (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings.
"LETTER OF CREDIT REQUEST" shall have the meaning provided in section
3.2(a).
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"LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any lease
in the nature thereof).
"LOAN" shall have the meaning provided in section 2.1.
"MARGIN STOCK" shall have the meaning provided in Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the
business, operations, property, assets, liabilities or financial condition of,
(i) when used with reference to the Borrower or any of its Subsidiaries, the
Borrower and its Subsidiaries, taken as a whole, or (ii) when used with
reference to any other person, such person and its Subsidiaries, taken as a
whole, as the case may be.
"MATERIAL SUBSIDIARY" shall mean, at any time, with reference to any
person, any Subsidiary of such person (i) that has assets at such time
comprising 10% or more of the consolidated assets of such person and its
Subsidiaries, or (ii) whose operations in the current fiscal year are expected
to, or whose operations in the most recent fiscal year did (or would have if
such person had been a Subsidiary for such entire fiscal year), represent 10% or
more of the consolidated earnings before interest, taxes, depreciation and
amortization of such person and its Subsidiaries for such fiscal year.
"MATURITY DATE" shall mean the third anniversary of the Closing Date,
unless earlier terminated in accordance with the provisions of this Agreement.
"MINIMUM BORROWING AMOUNT" shall mean (i) for Prime Rate Loans,
$100,000, with minimum increments thereafter of $100,000 and (ii) for Eurodollar
Loans, $1,000,000, with minimum increments thereafter of $500,000.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc. and its
successors.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan, as defined in
section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions or has within any of the
preceding three plan years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" shall mean an employee benefit plan, other
than a Multiemployer Plan, to which the Borrower or any ERISA Affiliate, and one
or more employers other than the Borrower or an ERISA Affiliate, is making or
accruing an obligation to make contributions or, in the event that any such plan
has been terminated, to which the Borrower or an ERISA Affiliate made or accrued
an obligation to make contributions during any of the five plan years preceding
the date of termination of such plan.
"NCB" shall mean National City Bank, a national banking association,
together with its successors and assigns.
"NET CASH PROCEEDS" shall mean, with respect to (i) any Asset Sale, the
Cash Proceeds resulting therefrom net of (A) reasonable and customary expenses
of sale incurred in connection with such Asset Sale, and other reasonable and
customary fees and expenses incurred, and all state, and local taxes paid or
reasonably estimated to be payable by such person, as a consequence of such
Asset Sale and the payment of principal, premium and interest of Indebtedness
(other than the Obligations) secured by the asset which is the subject of the
Asset Sale and required to be, and which is, repaid under the terms thereof as a
result of such Asset Sale, (B) amounts of any distributions payable to holders
of minority interests in the relevant person or in the relevant property or
assets and (C) incremental federal, state and local income taxes paid or payable
as a result thereof; and (ii) any Event of Loss, the Cash Proceeds resulting
therefrom net of (A) reasonable and customary expenses incurred in connection
with such Event of Loss, and local taxes paid or reasonably estimated to be
payable by such person, as a consequence of such Event of Loss and the payment
of principal, premium and interest of Indebtedness (other than the Obligations)
secured by the asset which is the subject of the Event of Loss and required to
be, and which is, repaid under the terms thereof as a result of such Event of
Loss, (B) amounts of any distributions payable to holders of minority interests
in the relevant person or in the relevant property or assets and (C) incremental
federal, state and local income taxes paid or payable as a result thereof.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
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"NON-DEFAULTING LENDER" shall mean each Lender other than a Defaulting
Lender.
"NOTE" shall have the meaning provided in section 2.5(a).
"NOTICE OF BORROWING" shall have the meaning provided in section
2.3(a).
"NOTICE OF CONVERSION" shall have the meaning provided in section 2.6.
"NOTICE OFFICE" shall mean the office of the Administrative Agent at
0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxx Xxxxxx, Vice
President (telephone: (000) 000-0000; facsimile: (000) 000-0000), or such other
office, located in a city in the United States Eastern Time Zone, as the
Administrative Agent may designate to the Borrower from time to time.
"OBLIGATIONS" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing to the
Administrative Agent or any Lender pursuant to the terms of this Agreement or
any other Credit Document.
"OPERATING LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is not accounted for as a Capital Lease on the balance
sheet of that person.
"PARTICIPANT" shall have the meaning provided in section 3.4(a).
"PAYMENT OFFICE" shall mean the office of the Administrative Agent at
0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxxx Xxxxxx
(telephone: (000) 000-0000; facsimile: (000) 000-0000), or such other office,
located in a city in the United States Eastern Time Zone, as the Administrative
Agent may designate to the Borrower from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to section 4002 of ERISA, or any successor thereto.
"PERCENTAGE" shall mean at any time for any Lender, the percentage
obtained by dividing such Lender's Commitment by the Total Commitment, PROVIDED,
that if the Total Commitment has been terminated, the Percentage for each Lender
shall be determined by dividing such Lender's Commitment immediately prior to
such termination by the Total Commitment immediately prior to such termination.
"PERMITTED ACQUISITION" shall mean any Acquisition completed in
accordance with the requirements of section 9.2(c).
"PERMITTED LIENS" shall mean Liens permitted by section 9.3.
"PERMITTED RECEIVABLES PROGRAM" shall have the meaning provided in
section 9.4(c).
"PERSON" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"PLAN" shall mean any multiemployer or single-employer plan as defined
in section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute by) the Borrower or a Subsidiary of the
Borrower or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Borrower, or a Subsidiary of
the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"PLEDGE AGREEMENT" shall have the meaning provided in section 6.1(c).
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"PRIME RATE" shall mean, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum shall at
all times be equal to the greater of (i) the rate of interest established by NCB
in Cleveland, Ohio, from time to time, as its prime rate, whether or not
publicly announced, which interest rate may or may not be the lowest rate
charged by it for commercial loans or other extensions of credit; and (ii) the
Federal Funds Effective Rate in effect from time to time PLUS 1/2 of 1% per
annum.
"PRIME RATE LOAN" shall mean each Loan bearing interest at the rate
provided in section 2.7(a).
"PROHIBITED TRANSACTION" shall mean a transaction with respect to a
Plan that is prohibited under section 4975 of the Code or section 406 of ERISA
and not exempt under section 4975 of the Code or section 408 of ERISA.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. Section 6901 ET SEQ.
"REAL PROPERTY" of any person shall mean all of the right, title and
interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"RECEIVABLES SUBSIDIARY" shall mean Royal Appliance Receivables, Inc.,
an Ohio corporation, so long as such corporation is a participant in the
Permitted Receivables Program.
"REDEEMABLE STOCK" shall mean with respect to any person, any capital
stock or similar equity interests of such person that (i) is by its terms
subject to mandatory redemption, in whole or in part, pursuant to a sinking
fund, scheduled redemption or similar provisions, at any time prior to the
latest Maturity Date; or (ii) otherwise is required to be repurchased or retired
on a scheduled date or dates, upon the occurrence of any event or circumstance,
at the option of the holder or holders thereof, or otherwise, at any time prior
to the latest Maturity Date under this Agreement, other than any such repurchase
or retirement occasioned by a "change of control" or similar event.
"REFERENCE BANKS" shall mean (i) NCB and (ii) any other Lender or
Lenders selected as a Reference Bank by the Administrative Agent and the
Required Lenders, PROVIDED, that if any of such Reference Banks is no longer a
Lender, such other Lender or Lenders as may be selected by the Administrative
Agent acting on instructions from the Required Lenders.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"REGULATION U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"REPORTABLE EVENT" shall mean an event described in section 4043 of
ERISA or the regulations thereunder with respect to a Plan, other than those
events as to which the notice requirement is waived under subsections .22, .23,
.25, .27, .28, .30, .31, .32, .34, .35, .63, .64, .65 or .67 of PBGC Regulation
section 4043.
"REQUIRED LENDERS" shall mean Non-Defaulting Lenders whose outstanding
Loans and Unutilized Commitments constitute more than 66+2/3% of the sum of the
total outstanding Loans and Unutilized Commitments of Non-Defaulting Lenders
(PROVIDED that, for purposes hereof, neither the Borrower, nor any of its
Affiliates, shall be included in (i) the Lenders holding such amount of the
Loans or having such amount of the Unutilized Commitments, or (ii) determining
the aggregate unpaid principal amount of the Loans or Unutilized Commitments).
"RESTRICTED STOCK PAYMENTS" shall mean (i) any dividend or other
distribution (whether in cash, securities or other property) with respect to any
shares of any class of capital stock of the Borrower or any Subsidiary, or (ii)
any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such shares of
capital stock of the Borrower or any option, warrant or other right to acquire
any such shares of capital stock of the Borrower.
"SALE AND LEASE-BACK TRANSACTION" shall mean any arrangement with any
person providing for the leasing by the Borrower or any Subsidiary of the
Borrower of any property (except for temporary leases for a term, including any
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renewal thereof, of not more than one year and except for leases between the
Borrower and a Subsidiary or between Subsidiaries), which property has been or
is to be sold or transferred by the Borrower or such Subsidiary to such person.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., and its successors.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC REGULATION D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"SECTION 5.4(b)(ii) CERTIFICATE" shall have the meaning provided in
section 5.4(b)(ii).
"SECURITY AGREEMENT" shall have the meaning provided in section 6.1(c).
"SECURITY DOCUMENTS" shall mean the Security Agreement, the Pledge
Agreement, the Collateral Assignment of Trademarks, the Collateral Assignment of
Patents and each other document pursuant to which any Lien or security interest
is granted by any Credit Party to the Collateral Agent as security for any of
the Obligations.
"STANDARD PERMITTED LIENS" shall mean the following:
(i) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of the
Borrower) have been established;
(ii) Liens in respect of property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers', warehousemen's, materialmen's and mechanics' Liens and other
similar Liens arising in the ordinary course of business, which do not
in the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
business of the Borrower or any Subsidiary;
(iii) Liens created by this Agreement or the other Credit
Documents;
(iv) Liens (x) in existence on the Closing Date which are
listed, and the Indebtedness secured thereby and the property subject
thereto on the Closing Date described, in Annex IV, or (y) arising out
of the refinancing, extension, renewal or refunding of any Indebtedness
secured by any such Liens, PROVIDED that the principal amount of such
Indebtedness is not increased and such Indebtedness is not secured by
any additional assets;
(v) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under section
10.1(g);
(vi) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; and mechanic's Liens, carrier's Liens, and other Liens to
secure the performance of tenders, statutory obligations, contract
bids, government contracts, performance and return-of-money bonds and
other similar obligations, incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed
money), whether pursuant to statutory requirements, common law or
consensual arrangements;
(vii) Leases or subleases granted to others not interfering in
any material respect with the business of the Borrower or any of its
Subsidiaries and any interest or title of a lessor under any lease not
in violation of this Agreement;
(viii) easements, rights-of-way, zoning or deed restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries
considered as an entirety; and
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(ix) Liens arising from financing statements regarding
property subject to leases not in violation of the requirements of this
Agreement, PROVIDED that such Liens are only in respect of the property
subject to, and secure only, the respective lease (and any other lease
with the same or an affiliated lessor).
"STATED AMOUNT" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions or other
requirements for drawing could then be met).
"SUBORDINATED INDEBTEDNESS" shall mean any Indebtedness which has been
subordinated to the Obligations in such manner and to such extent as the
Administrative Agent (acting on instructions from the Required Lenders) may
require.
"SUBSIDIARY" of any person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"SUBSIDIARY GUARANTOR" shall mean any Subsidiary which is a party to
the Subsidiary Guaranty.
"SUBSIDIARY GUARANTY" shall have the meaning provided in section
6.1(c).
"SYNTHETIC LEASE" shall mean any lease (i) which is accounted for by
the lessee as an Operating Lease, and (ii) under which the lessee is intended to
be the "owner" of the leased property for Federal income tax purposes.
"TESTING PERIOD" shall mean for any determination a single period
consisting of the four consecutive fiscal quarters of the Borrower then last
ended (whether or not such quarters are all within the same fiscal year), EXCEPT
that if a particular provision of this Agreement indicates that a Testing Period
shall be of a different specified duration, such Testing Period shall consist of
the particular fiscal quarter or quarters then last ended which are so indicated
in such provision.
"TOTAL COMMITMENT" shall mean the sum of the Commitments of the
Lenders.
"TYLER BOULEVARD FACILITY" shall mean the Borrower's approximately
300,000 square foot shipping facility and associated Rela Property located at
0000 Xxxxx Xxxxxxxxx, Xxxxxx, Xxxx 00000.
"TYPE" shall mean any type of Loan determined with respect to the
interest option applicable thereto, I.E., a Prime Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code.
"UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"UNITED STATES" and "U.S." each means United States of America.
"UNPAID DRAWING" shall have the meaning provided in section 3.3(a).
"UNUTILIZED COMMITMENT" for any Lender at any time shall mean the
excess of (i) such Lender's Commitment at such time over (ii) the sum of (x) the
principal amount of Loans made by such Lender and outstanding at such time plus
(y) such Lender's Percentage of Letter of Credit Outstandings at such time.
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"UNUTILIZED TOTAL COMMITMENT" shall mean, at any time, the excess of
(i) the Total Commitment at such time over (ii) the sum of (x) the aggregate
principal amount of all Loans then outstanding plus (y) the aggregate Letter of
Credit Outstandings at such time.
"WHOLLY-OWNED SUBSIDIARY" shall mean each Subsidiary of the Borrower at
least 95% of whose capital stock, equity interests and partnership interests,
other than director's qualifying shares or similar interests, are owned directly
or indirectly by the Borrower.
"WRITTEN", "WRITTEN" or "IN WRITING" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
telegraph or cable.
1.2. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
1.3. ACCOUNTING TERMS. Except as otherwise specifically provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; PROVIDED that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision of section 8 or 9 hereof to eliminate the effect of
any change occurring after the Effective Date in GAAP or in the application
thereof to such provision (or if the Administrative Agent notifies the Borrower
that the Required Lenders request an amendment to any such provision hereof for
such purposes), regardless of whether any such notice is given before or after
such change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance with the requirements of this
Agreement.
1.4. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any person shall be construed to include such person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to sections, Annexes
and Exhibits shall be construed to refer to sections of, and Annexes and
Exhibits to, this Agreement, and (e) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all real
property, tangible and intangible assets and properties, including cash,
securities, accounts and contract rights, and interests in any of the foregoing.
1.5. CURRENCY EQUIVALENTS. For purposes of this Agreement, except as
otherwise specified herein, (i) the equivalent in Dollars of any Alternative
Currency shall be determined by using the quoted spot rate at which the
Administrative Agent offers to exchange Dollars for such Alternative Currency at
its Payment Office at 9:00 A.M. (local time at the Payment Office) two Business
Days prior to the date on which such equivalent is to be determined, and (ii)
the equivalent in any Alternative Currency of Dollars shall be determined by
using the quoted spot rate at which the Administrative Agent's Payment Office
offers to exchange such Alternative Currency for Dollars at the Payment Office
at 9:00 A.M. (local time at the Payment Office) two Business Days prior to the
date on which such equivalent is to be determined; PROVIDED, that (A) the
equivalent in Dollars of any Unpaid Drawing in respect of any Letter of Credit
denominated in an Alternative Currency shall be determined at the time the
drawing under such Letter of Credit was paid or disbursed by the applicable
Letter of Credit Issuer; (B) for purposes of sections 2.1, 3.1(b) and 5.2, the
equivalent in Dollars of the Stated Amount of any Letter of Credit denominated
in an Alternative Currency shall be calculated (x) on the date of the issuance
of the respective Letter of Credit, (y) on the first Business Day of each
calendar month thereafter and (z) in any other case where the same is required
or permitted to be calculated, on such other day as the Administrative Agent
may, in its sole discretion, consider appropriate; and (C) for purposes of
sections 4.1(b) and (c), the equivalent in Dollars of the Stated Amount of any
Letter of Credit denominated in an Alternative Currency shall be calculated as
of 9:00 A.M. (local time at the Payment Office) on the date of issuance (or any
increase in the amount or renewal) of any applicable Letter of Credit.
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SECTION 2. AMOUNT AND TERMS OF LOANS.
2.1. COMMITMENTS FOR LOANS. Subject to and upon the terms and
conditions herein set forth, each Lender severally agrees to make a loan or
loans (each a "LOAN" and, collectively, the "LOANS") to the Borrower, which
Loans shall be drawn in accordance with the following provisions:
(a) Loans may be incurred by the Borrower at any time and
from time to time on and after the Closing Date and prior to the
Maturity Date;
(b) except as otherwise provided, Loans may, at the option
of the Borrower, be incurred and maintained as, or converted into,
Loans which are Prime Rate Loans or Eurodollar Loans, in each case
denominated in Dollars, PROVIDED that all Loans made as part of the
same Borrowing shall, unless otherwise specifically provided herein,
consist of Loans of the same Type;
(c) Loans may be repaid or prepaid and reborrowed in
accordance with the provisions hereof; and
(d) Loans made by any Lender shall not exceed for such
Lender at any time outstanding that aggregate principal amount which,
when added to the product at such time of (i) such Lender's Percentage,
TIMES (ii) the aggregate Letter of Credit Outstandings, equals the
Commitment of such Lender at such time.
2.2. MINIMUM BORROWING AMOUNTS, ETC.; PRO RATA BORROWINGS. (a) The
aggregate principal amount of each Borrowing by the Borrower shall not be less
than the Minimum Borrowing Amount. More than one Borrowing may be incurred by
the Borrower on any day, PROVIDED that (i) if there are two or more Borrowings
on a single day by the Borrower which consist of Eurodollar Loans, each such
Borrowing shall have a different initial Interest Period, and (ii) at no time
shall there be more than 9 Borrowings of Eurodollar Loans outstanding hereunder.
(b) All Borrowings shall be made by the Lenders PRO RATA on the
basis of their respective Commitments. It is understood that no Lender shall be
responsible for any default by any other Lender in its obligation to make Loans
hereunder and that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to
fulfill its Commitment hereunder.
2.3. NOTICE OF BORROWING. (a) Whenever the Borrower desires to incur
Loans, it shall give the Administrative Agent at its Notice Office,
(A) BORROWINGS OF EURODOLLAR LOANS: prior to 12:00 noon
(local time at its Notice Office), at least three Business Days' prior
written or telephonic notice (in the case of telephonic notice,
promptly confirmed in writing if so requested by the Administrative
Agent) of each Borrowing of Eurodollar Loans to be made hereunder, or
(B) BORROWINGS OF PRIME RATE LOANS: prior to 12:00 noon
(local time at its Notice Office) on the proposed date thereof written
or telephonic notice (in the case of telephonic notice, promptly
confirmed in writing if so requested by the Administrative Agent) of
each Borrowing of Prime Rate Loans to be made hereunder.
Each such notice (each such notice, a "NOTICE OF BORROWING") shall (if requested
by the Administrative Agent to be confirmed in writing), be substantially in the
form of Exhibit B-1, and in any event shall be irrevocable and shall specify:
(i) the aggregate principal amount of the Loans to be made pursuant to such
Borrowing; (ii) the date of the Borrowing (which shall be a Business Day); (iii)
whether the Borrowing shall consist of Prime Rate Loans or Eurodollar Loans; and
(iv) if the requested Borrowing consists of Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall
promptly give each Lender written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing, of such Lender's proportionate
share thereof and of the other matters covered by the Notice of Borrowing
relating thereto.
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(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent may act prior to receipt of written confirmation without
liability upon the basis of such telephonic notice believed by the
Administrative Agent in good faith to be from an Authorized Officer of the
Borrower entitled to give telephonic notices under this Agreement on behalf of
the Borrower. In each such case, the Administrative Agent's record of the terms
of such telephonic notice shall be conclusive absent manifest error.
2.4. DISBURSEMENT OF FUNDS. (a) No later than 2:00 P.M. (local time
at the Payment Office) on the date specified in each Notice of Borrowing
relating to Eurodollar Loans, and no later than 2:00 P.M. (local time at the
Payment Office) on the date specified in each Notice of Borrowing relating to
Prime Rate Loans, each Lender will make available its PRO RATA share of each
Borrowing requested to be made on such date in the manner provided below. All
amounts shall be made available to the Administrative Agent in U.S. dollars and
immediately available funds at the Payment Office and the Administrative Agent
promptly will make available to the Borrower by depositing to its account at the
Payment Office the aggregate of the amounts so made available in the type of
funds received. Unless the Administrative Agent shall have been notified by any
Lender prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent its portion of the Borrowing or Borrowings
to be made on such date, the Administrative Agent may assume that such Lender
has made such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption, may
(in its sole discretion and without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender and the Administrative
Agent has made available same to the Borrower, the Administrative Agent shall be
entitled to recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds
Effective Rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with section 2.7, for the respective Loans
(but without any requirement to pay any amounts in respect thereof pursuant to
section 2.10).
(b) Nothing herein and no subsequent termination of the Commitments
pursuant to section 4.2 or 4.3 shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder and in existence from time to
time or to prejudice any rights which the Borrower may have against any Lender
as a result of any default by such Lender hereunder.
2.5. NOTES AND LOAN ACCOUNTS. (A) LOANS EVIDENCED BY NOTES. The
Borrower's obligation to pay the principal of, and interest on, the Loans made
to it by each Lender shall be evidenced by a promissory note of the Borrower
substantially in the form of Exhibit A (each a "NOTE" and, collectively, the
"NOTES").
(b) FORM OF NOTE. The Note issued by the Borrower to a Lender shall:
(i) be executed by the Borrower; (ii) be payable to the order of such Lender and
be dated on or prior to the date the first Loan outstanding thereunder is made;
(iii) be payable in the principal amount of Loans evidenced thereby; (iv) mature
on the Maturity Date; (v) bear interest as provided in section 2.7 in respect of
the Prime Rate Loans or Eurodollar Loans, as the case may be, evidenced thereby;
(vi) be subject to mandatory prepayment as provided in section 5.2; and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(c) LOAN ACCOUNTS OF LENDERS. Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(d) LOAN ACCOUNTS OF ADMINISTRATIVE AGENT. The Administrative Agent
shall maintain accounts in which it shall record (i) the amount of each Loan
made hereunder, the Type thereof and the applicable Interest Period if such Loan
is a Eurodollar Loan, (ii) the amount of any principal due and payable or to
become due and payable from the Borrower to each Lender hereunder, and (iii) the
amount of any sum received by the Administrative Agent hereunder for the account
of the Lenders and each Lender's share thereof.
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(e) EFFECT OF LOAN ACCOUNTS, ETC. The entries made in the accounts
maintained pursuant to section 2.5(c) and (d) shall be PRIMA FACIE evidence of
the existence and amounts and amounts of the obligations recorded therein;
PROVIDED, that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay or prepay the Loans in accordance with the terms of
this Agreement.
(f) ENDORSEMENTS OF AMOUNTS ON NOTES PRIOR TO TRANSFER. Each Lender
will, prior to any transfer of any of the Notes issued to it by the Borrower,
endorse on the reverse side thereof or the grid attached thereto the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation shall not affect the Borrower's obligations in
respect of such Loans.
2.6. CONVERSIONS. The Borrower shall have the option to Convert on
any Business Day all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of its Loans of one Type
owing by it into a Borrowing or Borrowings of another Type of Loans which can be
made hereunder, PROVIDED that:
(a) no partial Conversion of a Borrowing of Eurodollar Loans
shall reduce the outstanding principal amount of the Eurodollar Loans
made pursuant to such Borrowing to less than the Minimum Borrowing
Amount applicable thereto;
(b) any Conversion of Eurodollar Loans into Prime Rate Loans
shall be made on, and only on, the last day of an Interest Period for
such Eurodollar Loans;
(c) Prime Rate Loans may only be Converted into Eurodollar
Loans if no Default under section 10.1(a) or Event of Default is in
existence on the date of the Conversion unless the Required Lenders
otherwise agree;
(d) Prime Rate Loans may not be Converted into Eurodollar
Loans during any period when such Conversion is not permitted under
section 2.9; and
(e) Borrowings of Eurodollar Loans resulting from this
section 2.6 shall conform to the requirements of section 2.2(a).
Each such Conversion shall be effected by the Borrower giving the Administrative
Agent at its Notice Office, prior to 11:00 A.M. (local time at such Notice
Office), at least three Business Days' (or prior to 11:00 A.M. (local time at
such Notice Office) same Business Day's, in the case of a Conversion into Prime
Rate Loans) prior written notice (or telephonic notice promptly confirmed in
writing if so requested by the Administrative Agent) (each a "NOTICE OF
CONVERSION"), substantially in the form of Exhibit B-2, specifying the Loans to
be so Converted, the Type of Loans to be Converted into and, if to be Converted
into a Borrowing of Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Lender prompt
notice of any such proposed Conversion affecting any of its Loans. For the
avoidance of doubt, the prepayment or repayment of any Loans out of the proceeds
of other Loans by the Borrower is not considered a Conversion of Loans into
other Loans.
2.7. INTEREST. (a) INTEREST ON PRIME RATE LOANS. During such periods
as a Loan is a Prime Rate Loan, it shall bear interest at a fluctuating rate per
annum which shall at all times be equal to the Prime Rate then in effect PLUS
the Applicable Prime Rate Margin then in effect.
(b) INTEREST ON EURODOLLAR LOANS. During such periods as a Loan is a
Eurodollar Loan, it shall bear interest at a rate per annum which shall at all
times during an Interest Period therefor be the relevant Adjusted Eurodollar
Rate for such Eurodollar Loan for such Interest Period PLUS the Applicable
Eurodollar Margin from time to time in effect.
(c) DEFAULT INTEREST. Notwithstanding the above provisions, if a
Default under section 10.1(a) or Event of Default is in existence, all
outstanding amounts of principal and, to the extent permitted by law, all
overdue interest, in respect of each Loan shall bear interest, payable on
demand, at a fluctuating rate per annum equal to 2% per annum above the rate in
effect from time to time pursuant to section 2.7(a). If any amount (other than
the principal of and interest on the Loans) payable by the Borrower under the
Credit Documents is not paid when due, such amount shall bear interest,
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payable on demand, at a fluctuating rate per annum equal to 2% per annum above
the rate in effect from time to time pursuant to section 2.7(a).
(d) ACCRUAL AND PAYMENT OF INTEREST. Interest shall accrue from and
including the date of any Borrowing to but excluding the date of any prepayment
or repayment thereof and shall be payable
(i) in respect of each Prime Rate Loan, quarterly in arrears
on the first Business Day of each April, July, October and January;
(ii) in respect of each Eurodollar Loan, on the last day of
each Interest Period applicable thereto and in the case of an Interest
Period in excess of three months, on the dates which are successively
three months after the commencement of such Interest Period; and
(iii) in respect of each Loan, on any prepayment or Conversion
(on the amount prepaid or Converted), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) COMPUTATIONS OF INTEREST. All computations of interest hereunder
shall be made in accordance with section 12.7(b).
(f) INFORMATION AS TO RATES. The Administrative Agent upon
determining the interest rate for any Borrowing shall promptly notify the
Borrower and the affected Lenders thereof. If the Administrative Agent is unable
to determine the Adjusted Eurodollar Rate for any Borrowing of Eurodollar Loans
by reference to the Telerate screen or other information provided by a service
organization referred to in clause (i) of the definition of the term Adjusted
Eurodollar Rate, then each Reference Bank agrees to furnish the Administrative
Agent timely information for the purpose of determining the Adjusted Eurodollar
Rate for any such Borrowing. If any one or more of the Reference Banks shall not
timely furnish such information, the Administrative Agent shall determine the
Adjusted Eurodollar Rate on the basis of timely information furnished by the
remaining Reference Banks.
(g) INTEREST RATE MARGINS. As used herein, the term "APPLICABLE
PRIME RATE MARGIN", as applied to any Loan which is a Prime Rate Loan, and the
term "APPLICABLE EURODOLLAR MARGIN", as applied to any Loan which is a
Eurodollar Loan, means the particular rate per annum determined by the
Administrative Agent in accordance with the Pricing Grid Table which appears
below, based on the Borrower's ratio of Consolidated Total Adjusted Debt to
Consolidated EBITDA, as computed in accordance with section 9.7 hereof, and such
Pricing Grid Table, and the following provisions:
(i) Initially, until changed hereunder in accordance with
the following provisions, the Applicable Prime Rate Margin will be zero
basis points per annum and the Applicable Eurodollar Margin will be 150
basis points per annum.
(ii) Commencing with the fiscal quarter of the Borrower ended
on or nearest to March 31, 2000, and continuing with each fiscal
quarter thereafter, the Administrative Agent will determine the
Applicable Prime Rate Margin for any Prime Rate Loan and the the
Applicable Eurodollar Margin for any Eurodollar Loan in accordance with
the Pricing Grid Table, based on the Borrower's ratio of (x)
Consolidated Total Adjusted Debt as of the end of the fiscal quarter,
to (y) Consolidated EBITDA for the Testing Period ended on the last day
of the fiscal quarter, as computed in accordance with section 9.7
hereof, and identified in such Pricing Grid Table. Changes in the
Applicable Prime Rate Margin and the Applicable Eurodollar Margin based
upon changes in such ratio shall become effective on the first day of
the month following the receipt by the Administrative Agent pursuant to
section 8.1(a) or (b), as applicable, of the financial statements of
the Borrower, accompanied by the certificate and calculations referred
to in section 8.1(c), demonstrating the computation of such ratio,
based upon the ratio in effect at the end of the applicable period
covered (in whole or in part) by such financial statements.
(iii) Notwithstanding the above provisions, during any period
when (A) the Borrower has failed to timely deliver its consolidated
financial statements referred to in section 8.1(a) or (b), accompanied
by the certificate and calculations referred to in section 8.1(c), (B)
a Default under section 10.1(a) has occurred and is continuing, or (C)
an Event of Default has occurred and is continuing, the Applicable
Prime Rate Margin and the Applicable Eurodollar Margin shall each be
the highest rate per annum indicated therefor in the Pricing Grid
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Table, regardless of the Borrower's ratio of Consolidated Total
Adjusted Debt to Consolidated EBITDA at such time.
(iv) Any changes in the Applicable Prime Rate Margin or the
Applicable Eurodollar Margin shall be determined by the Administrative
Agent in accordance with the above provisions and the Administrative
Agent will promptly provide notice of such determinations to the
Borrower and the Lenders. Any such determination by the Administrative
Agent pursuant to this section 2.7(g) shall be conclusive and binding
absent manifest error.
PRICING GRID TABLE
(EXPRESSED IN BASIS POINTS)
================================================================================
RATIO OF
CONSOLIDATED TOTAL ADJUSTED DEBT APPLICABLE APPLICABLE APPLICABLE
TO EURODOLLAR PRIME RATE COMMITMENT
CONSOLIDATED EBITDA MARGIN MARGIN FEE RATE
================================================================================
>= 2.50 to 1.00 225.00 75.00 50.00
--------------------------------------------------------------------------------
>= 2.00 to 1.00 and < 2.50 to 1.00 200.00 50.00 37.50
--------------------------------------------------------------------------------
>= 1.50 to 1.00 and < 2.00 to 1.00 175.00 25.00 30.00
--------------------------------------------------------------------------------
>= 1.00 to 1.00 and < 1.50 to 1.00 150.00 -0- 25.00
--------------------------------------------------------------------------------
< 1.00 to 1.00 100.00 -0- 20.00
================================================================================
2.8. SELECTION AND CONTINUATION OF INTEREST PERIODS. (a) The Borrower
shall have the right
(x) at the time it gives a Notice of Borrowing or Notice of
Conversion in respect of the making of or Conversion into a Borrowing
consisting of Eurodollar Loans, to select in such Notice the Interest
Period to be applicable to such Borrowing, and
(y) prior to 11:00 A.M. (local time at the Notice Office) on
the third Business Day prior to the expiration of an Interest Period
applicable to a Borrowing consisting of Eurodollar Loans, to elect by
giving the Administrative Agent written or telephonic notice (in the
case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent) to Continue all or the Minimum
Borrowing Amount of the principal amount of such Loans as one or more
Borrowings of Eurodollar Loans and to select the Interest Period to be
applicable to any such Borrowing (any such notice, a "NOTICE OF
CONTINUATION"),
which Interest Period shall, at the option of the Borrower, be a one, two, three
or six month period; PROVIDED, that notwithstanding anything to the contrary
contained above, the Borrower's right to select an Interest Period or to effect
any Continuation shall be subject to the applicable provisions of section 2.9
and to the following:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing (the date
of a Borrowing resulting from a Conversion or Continuation shall be the
date of such Conversion or Continuation) and each Interest Period
occurring thereafter in respect of such Borrowing shall commence on the
day on which the next preceding Interest Period expires;
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(ii) if any Interest Period begins on a day for which there
is no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, PROVIDED that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
(iv) no Interest Period for any Eurodollar Loan may be
selected which would end after the Maturity Date;
(v) each Borrowing of Eurodollar Loans resulting from any
Continuation shall be in at least the Minimum Borrowing Amount
applicable thereto; and
(vi) no Interest Period may be elected at any time when a
Default under section 10.1(a) or an Event of Default is then in
existence unless the Required Lenders otherwise agree.
(b) If upon the expiration of any Interest Period the Borrower has
failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to Convert such Borrowing to Prime Rate Loans
effective as of the expiration date of such current Interest Period. If the
Borrower fails to specify in a Notice of Continuation the Interest Period for
any Eurodollar Loans which will be Continued as Eurodollar Loans, such Interest
Period shall be deemed to be one month.
2.9. INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender, shall have determined on a reasonable
basis (which determination shall, absent manifest error, be final and conclusive
and binding upon all parties hereto):
(i) on any date for determining the Adjusted Eurodollar Rate
for any Interest Period that, by reason of any changes arising after
the Effective Date affecting the interbank Eurodollar market, adequate
and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of Adjusted Eurodollar
Rate; or
(ii) at any time, that such Lender shall incur increased
costs or reductions in the amounts received or receivable hereunder in
an amount which such Lender deems material with respect to any
Eurodollar Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a
change in the rate of taxes or similar charges) because of (x) any
change since the Effective Date in any applicable law, governmental
rule, regulation, guideline, order or request (whether or not having
the force of law), or in the interpretation or administration thereof
and including the introduction of any new law or governmental rule,
regulation, guideline, order or request (such as, for example, but not
limited to, a change in official reserve requirements, but, in all
events, excluding reserves includable in the Adjusted Eurodollar Rate
pursuant to the definition thereof) and/or (y) other circumstances
adversely affecting the interbank Eurodollar market; or
(iii) at any time, that the making or Continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender in
good faith with any change since the Effective Date in any law,
governmental rule, regulation, guideline or order, or the official
interpretation or application thereof, or would conflict with any
thereof not having the force of law but with which such Lender
customarily complies or has become impracticable as a result of a
contingency occurring after the Effective Date which materially
adversely affects the interbank Eurodollar market;
THEN, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on or promptly following such date or time
and (y) within 10 Business Days of the date on which such event no longer exists
give notice (by telephone confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the
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Borrower and the Lenders that the circumstances giving rise to such notice by
the Administrative Agent no longer exist, and any Notice of Borrowing, Notice of
Continuation or Notice of Conversion given by the Borrower with respect to
Eurodollar Loans which have not yet been incurred, Continued or Converted shall
be deemed rescinded by the Borrower or, in the case of a Notice of Borrowing,
shall, at the option of the Borrower, be deemed converted into a Notice of
Borrowing for Prime Rate Loans to be made on the date of Borrowing contained in
such Notice of Borrowing, (y) in the case of clause (ii) above, the Borrower
shall pay to such Lender, upon written demand therefor, such additional amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender shall determine) as shall be required to
compensate such Lender, for such increased costs or reductions in amounts
receivable hereunder (a written notice as to the additional amounts owed to such
Lender, showing the basis for the calculation thereof, which basis must be
reasonable, submitted to the Borrower by such Lender shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) and (z) in
the case of clause (iii) above, the Borrower shall take one of the actions
specified in section 2.9(b) as promptly as possible and, in any event, within
the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in section 2.9(a)(ii) or (iii), the Borrower may (and in
the case of a Eurodollar Loan affected pursuant to section 2.9(a)(iii) the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that the Borrower was
notified by a Lender pursuant to section 2.9(a)(ii) or (iii), cancel said
Borrowing, convert the related Notice of Borrowing into one requesting a
Borrowing of Prime Rate Loans or require the affected Lender to make its
requested Loan as a Prime Rate Loan, or (ii) if the affected Eurodollar Loan is
then outstanding, upon at least one Business Day's notice to the Administrative
Agent, require the affected Lender to Convert each such Eurodollar Loan into a
Prime Rate Loan, PROVIDED that if more than one Lender is affected at any time,
then all affected Lenders must be treated the same pursuant to this section
2.9(b).
(c) If any Lender shall have determined that after the Effective
Date, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by such Lender or its parent corporation 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, in each case made
subsequent to the Effective Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's commitments or obligations hereunder to a level below that which
such Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its parent corporation for
such reduction. Each Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this section 2.9(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth, in
reasonable detail, the basis of the calculation of such additional amounts,
which basis must be reasonable, although the failure to give any such notice
shall not release or diminish any of the Borrower's obligations to pay
additional amounts pursuant to this section 2.9(c) upon the subsequent receipt
of such notice.
(d) Notwithstanding anything in this Agreement to the contrary,
(i) no Lender shall be entitled to compensation or payment or reimbursement of
other amounts under section 2.9 or 3.5 for any amounts incurred or accruing more
than 90 days prior to the giving of notice to the Borrower of additional costs
or other amounts of the nature described in such sections, and (ii) no Lender
shall demand compensation for any reduction referred to in section 2.9(c) or
payment or reimbursement of other amounts under section 3.5 if it shall not at
the time be the general policy or practice of such Lender to demand such
compensation, payment or reimbursement in similar circumstances under comparable
provisions of other credit agreements.
2.10. BREAKAGE COMPENSATION. The Borrower shall compensate each
applicable Lender, upon its written request (which request shall set forth the
detailed basis for requesting and the method of calculating such compensation),
for all reasonable losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of the liquidation
or reemployment of deposits or other funds required by such Lender to fund its
Eurodollar Loans) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender or the Administrative Agent) a Borrowing of
Eurodollar Loans does not occur on a date specified therefor in a Notice of
Borrowing, Notice of Continuation or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to
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section 2.9(a)); (ii) if any repayment, prepayment or Conversion of any of its
Eurodollar Loans occurs on a date which is not the last day of an Interest
Period applicable thereto; (iii) if any prepayment of any of its Eurodollar
Loans is not made on any date specified in a notice of prepayment given by the
Borrower; or (iv) as a consequence of (x) any other default by the Borrower to
repay its Eurodollar Loans when required by the terms of this Agreement or (y)
an election made pursuant to section 2.9(b).
2.11. CHANGE OF LENDING OFFICE; REPLACEMENT OF LENDERS. (a) Each
Lender agrees that, upon the occurrence of any event giving rise to the
operation of section 2.9(a)(ii) or (iii), 2.9(c) or 3.5 with respect to such
Lender, it will, if requested by the Borrower, use reasonable efforts (subject
to overall policy considerations of such Lender) to designate another Applicable
Lending Office for any Loans or Commitment affected by such event, PROVIDED that
such designation is made on such terms that such Lender and its Applicable
Lending Office suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the operation of
any such section.
(b) If any Lender requests any compensation, reimbursement or other
payment under section 2.9(a)(ii) or (iii), 2.9(c) or 3.5 with respect to such
Lender, or if any Lender is a Defaulting Lender, then the Borrower may, at its
sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with the restrictions contained in section 12.4(c)), all its
interests, rights and obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); PROVIDED that (i) the Borrower shall have received the
prior written consent of the Administrative Agent, which consent shall not be
unreasonably withheld, (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts), and (iii) in the case of any
such assignment resulting from a claim for compensation, reimbursement or other
payments required to be made under section 2.9(a)(ii) or (iii), 2.9(c) or 3.5
with respect to such Lender, such assignment will result in a reduction in such
compensation, reimbursement or payments. A Lender shall not be required to make
any such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
(c) Nothing in this section 2.11 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in section 2.9
or 3.5.
SECTION 3. LETTERS OF CREDIT.
3.1. LETTERS OF CREDIT. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time on or after the Closing Date and prior to the
date that is 15 Business Days prior to the Maturity Date to issue, for the
account of the Borrower or any of its Subsidiaries and in support of (i) trade
obligations of the Borrower and its Subsidiaries incurred in the ordinary course
of business, and/or (ii) worker compensation, liability insurance, releases of
contract retention obligations, contract performance guarantee requirements and
other bonding obligations of the Borrower or any such Subsidiary incurred in the
ordinary course of its business, and such other standby obligations of the
Borrower and its Subsidiaries that are acceptable to the Letter of Credit
Issuer, and subject to and upon the terms and conditions herein set forth, such
Letter of Credit Issuer agrees to issue from time to time, irrevocable
documentary or standby letters of credit denominated and payable in Dollars or
an Alternative Currency in such form as may be approved by such Letter of Credit
Issuer and the Administrative Agent (each such letter of credit (and each
Existing Letter of Credit described in section 3.1(d)), a "LETTER OF CREDIT" and
collectively, the "LETTERS OF CREDIT").
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings at such time, would exceed either (x) $10,000,000, or (y) when
added to the aggregate principal amount of all Loans then outstanding, an amount
equal to the Total Commitment at such time; (ii) no individual Letter of Credit
(other than any Existing Letter of Credit) shall be issued which has an initial
Stated Amount less than $100,000 unless such lesser Stated Amount is acceptable
to the Letter of Credit Issuer; and (iii) each Letter of Credit shall have an
expiry date (including any renewal periods) occurring not later than the earlier
of (A) one year from the date of issuance thereof, unless a longer period is
approved by the relevant Letter of Credit Issuer and Lenders (other
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than any Defaulting Lender) holding a majority of the Total Commitment, and (B)
15 Business Days prior to the Maturity Date, in each case on terms acceptable to
the Administrative Agent and the relevant Letter of Credit Issuer.
(c) Notwithstanding the foregoing, in the event a Lender Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless either (i) such Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Borrower to eliminate such Letter of
Credit Issuer's risk with respect to the participation in Letters of Credit of
the Defaulting Lender or Lenders, including by cash collateralizing such
Defaulting Lender's or Lenders' Percentage of the Letter of Credit Outstandings;
or (ii) the issuance of such Letter of Credit, taking into account the potential
failure of the Defaulting Lender or Lenders to risk participate therein, will
not cause the Letter of Credit Issuer to incur aggregate credit exposure
hereunder with respect to Loans and Letter of Credit Outstandings in excess of
its Commitment, and the Borrower has undertaken, for the benefit of such Letter
of Credit Issuer, pursuant to an instrument satisfactory in form and substance
to such Letter of Credit Issuer, not to thereafter incur Loans or Letter of
Credit Outstandings hereunder which would cause the Letter of Credit Issuer to
incur aggregate credit exposure hereunder with respect to Loans and Letter of
Credit Outstandings in excess of its Commitment.
(d) Annex VI hereto contains a description of all letters of credit
outstanding on, and to continue in effect after, the Closing Date. Each such
letter of credit issued by a bank that is or becomes a Lender under this
Agreement on the Effective Date (each, an "EXISTING LETTER OF CREDIT") shall
constitute a "Letter of Credit" for all purposes of this Agreement, issued, for
purposes of section 3.4(a), on the Closing Date, and the Borrower, the
Administrative Agent and the applicable Lenders hereby agree that, from and
after such date, the terms of this Agreement shall apply to such Letters of
Credit, superseding any other agreement theretofore applicable to them to the
extent inconsistent with the terms hereof.
(e) No Letter of Credit Issuer shall issue any Letter of Credit, or
renew or extend or increase the amount of any previously issued Letter of
Credit, if at the time thereof the Administrative Agent and such Letter of
Credit Issuer shall have been notified by the Required Lenders in writing that
any of the conditions contained in this Agreement to such issuance, renewal,
extension or increase have not been satisfied, UNLESS such notice shall have
been withdrawn by the Required Lenders in a written instrument delivered to the
Administrative Agent and such Letter of Credit Issuer.
3.2. LETTER OF CREDIT REQUESTS: NOTICES OF ISSUANCE. (a) Whenever it
desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the Letter of Credit Issuer written or telephonic
notice (in the case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent) which, if in the form of written notice
shall be substantially in the form of Exhibit B-3, or transmit by electronic
communication (if arrangements for doing so have been approved by the Letter of
Credit Issuer), prior to 11:00 A.M. (local time at its Notice Office) at least
three Business Days (or such shorter period as may be acceptable to the relevant
Letter of Credit Issuer) prior to the proposed date of issuance (which shall be
a Business Day) (each a "LETTER OF CREDIT REQUEST"), which Letter of Credit
Request shall include such supporting documents that such Letter of Credit
Issuer customarily requires in connection therewith (including, in the case of a
Letter of Credit for an account party other than the Borrower, an application
for, and if applicable a reimbursement agreement with respect to, such Letter of
Credit). Any such documents executed in connection with the issuance of a Letter
of Credit, including the Letter of Credit itself, are herein referred to as
"LETTER OF CREDIT DOCUMENTS". In the event of any inconsistency between any of
the terms or provisions of any Letter of Credit Document and the terms and
provisions of this Agreement respecting Letters of Credit, the terms and
provisions of this Agreement shall control. The Administrative Agent shall
promptly notify each Lender of each Letter of Credit Request.
(b) Each Letter of Credit Issuer shall provide to the Administrative
Agent and each other Lender a quarterly (or monthly if requested by the
Administrative Agent or any applicable Lender) summary describing each Letter of
Credit issued by such Letter of Credit Issuer and then outstanding and an
identification for the relevant period of the daily aggregate Letter of Credit
Outstandings represented by Letters of Credit issued by such Letter of Credit
Issuer. Each Letter of Credit Issuer shall, if requested by the Administrative
Agent or any other Lender, provide a copy of each Letter of Credit issued by it.
3.3. AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrower
hereby agrees to reimburse (or cause any Subsidiary for whose account a Letter
of Credit was issued to reimburse) each Letter of Credit Issuer, by making
payment directly to such Letter of Credit Issuer in immediately available funds
at the payment office of such Letter of Credit Issuer, for any payment or
disbursement made by such Letter of Credit Issuer under any Letter of Credit
(each such amount so paid or disbursed until reimbursed, an "UNPAID DRAWING")
not later than the Business Day immediately
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following the Business Day on which such Letter of Credit Issuer notifies the
Borrower (or any such Subsidiary for whose account such Letter of Credit was
issued) of such payment or disbursement (which notice to the Borrower (or such
Subsidiary) shall be delivered reasonably promptly after any such payment or
disbursement), such payment to be made in Dollars (and in the amount which is
the Dollar equivalent of any such payment or disbursement made or denominated in
an Alternative Currency), with interest on the amount so paid or disbursed by
such Letter of Credit Issuer, to the extent not reimbursed prior to 1:00 P.M.
(local time at the payment office of the Letter of Credit Issuer) on the date of
such payment or disbursement, from and including the date paid or disbursed to
but not including the date such Letter of Credit Issuer is reimbursed therefor
at a rate per annum which shall be the rate then applicable to Loans which are
Prime Rate Loans (plus an additional 2% per annum if not reimbursed by the third
Business Day after the date of such payment or disbursement), any such interest
also to be payable on demand. If by 11:00 A.M. on the Business Day immediately
following notice to it of its obligation to make reimbursement in respect of an
Unpaid Drawing, the Borrower has not made such reimbursement out of its
available cash on hand or a contemporaneous Borrowing hereunder, (x) the
Borrower will be deemed to have given a Notice of Borrowing for Prime Rate Loans
in an aggregate principal amount sufficient to reimburse such Unpaid Drawing
(and the Administrative Agent shall promptly give notice to the Lenders of such
deemed Notice of Borrowing), (y) the Lenders shall, unless they are legally
prohibited from doing so, make the Loans contemplated by such deemed Notice of
Borrowing (which Loans shall be considered made under section 2.1 hereof), and
(z) the proceeds of such Prime Rate Loans shall be disbursed directly to the
applicable Letter of Credit Issuer to the extent necessary to effect such
reimbursement, with any excess proceeds to be made available to the Borrower in
accordance with the applicable provisions of this Agreement.
(b) The Borrower's obligation under this section 3.3 to reimburse,
or cause a Subsidiary to reimburse, each Letter of Credit Issuer with respect to
Unpaid Drawings (including, in each case, interest thereon) shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which the Borrower may have or have
had against such Letter of Credit Issuer, the Administrative Agent, any other
Letter of Credit Issuer or any Lender, including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit to
conform to the terms of the Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of such drawing, PROVIDED,
HOWEVER that the Borrower shall not be obligated to reimburse, or cause a
Subsidiary to reimburse, a Letter of Credit Issuer for any wrongful payment made
by such Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of
such Letter of Credit Issuer.
3.4. LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the
issuance by a Letter of Credit Issuer of any Letter of Credit (and on the
Closing Date with respect to any Existing Letter of Credit), such Letter of
Credit Issuer shall be deemed to have sold and transferred to each Lender with a
Commitment, and each such Lender (each a "PARTICIPANT") shall be deemed
irrevocably and unconditionally to have purchased and received from such Letter
of Credit Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Percentage, in such Letter of
Credit, each substitute letter of credit, each drawing made thereunder, the
obligations of the Borrower under this Agreement with respect thereto (although
Letter of Credit Fees shall be payable directly to the Administrative Agent for
the account of the Lenders as provided in section 4.1(b) and the Participants
shall have no right to receive any portion of any fees of the nature
contemplated by section 4.1(c)), the obligations of any Subsidiary of the
Borrower under any Letter of Credit Documents pertaining thereto, and any
security for, or guaranty pertaining to, any of the foregoing. Upon any change
in the Commitments of the Lenders pursuant to section 12.4(c), it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant
to this section 3.4 to reflect the new Percentages of the assigning and assignee
Lender.
(b) In determining whether to pay under any Letter of Credit, a
Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be delivered
under such Letter of Credit have been delivered and that they appear to comply
on their face with the requirements of such Letter of Credit. Any action taken
or omitted to be taken by a Letter of Credit Issuer under or in connection with
any Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create for such Letter of Credit Issuer any
resulting liability.
(c) In the event that a Letter of Credit Issuer makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed (or caused
any applicable Subsidiary to reimburse) such amount in full to such Letter of
Credit Issuer pursuant to section 3.3(a), such Letter of Credit Issuer shall
promptly notify the Administrative Agent, and the Administrative Agent shall
promptly notify each Participant of such failure, and each Participant shall
promptly
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and unconditionally pay to the Administrative Agent for the account of such
Letter of Credit Issuer, the amount of such Participant's Percentage of such
payment in Dollars (the Administrative Agent having determined in the case of
any payment by a Letter of Credit Issuer made in an Alternative Currency the
equivalent thereof in Dollars) and in same day funds, PROVIDED, HOWEVER, that no
Participant shall be obligated to pay to the Administrative Agent its Percentage
of such unreimbursed amount for any wrongful payment made by such Letter of
Credit Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Letter
of Credit Issuer. If the Administrative Agent so notifies any Participant
required to fund a payment under a Letter of Credit prior to 11:00 A.M. (local
time at its Notice Office) on any Business Day, such Participant shall make
available to the Administrative Agent for the account of the relevant Letter of
Credit Issuer such Participant's Percentage of the amount of such payment on
such Business Day in same day funds. If and to the extent such Participant shall
not have so made its Percentage of the amount of such payment available to the
Administrative Agent for the account of the relevant Letter of Credit Issuer,
such Participant agrees to pay to the Administrative Agent for the account of
such Letter of Credit Issuer, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to the Administrative Agent for the account of such Letter of Credit Issuer at
the Federal Funds Effective Rate. The failure of any Participant to make
available to the Administrative Agent for the account of the relevant Letter of
Credit Issuer its Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
the Administrative Agent for the account of such Letter of Credit Issuer its
Percentage of any payment under any Letter of Credit on the date required, as
specified above, but no Participant shall be responsible for the failure of any
other Participant to make available to the Administrative Agent for the account
of such Letter of Credit Issuer such other Participant's Percentage of any such
payment.
(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to section 3.4(c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Percentage thereof, in U.S. dollars and in same
day funds, an amount equal to such Participant's Percentage of the principal
amount thereof and interest thereon accruing after the purchase of the
respective participations, as and to the extent so received.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off defense or other
right which the Borrower (or any Subsidiary) may have at any time
against a beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any person for whom any such transferee may be
acting), the Administrative Agent, any Letter of Credit Issuer, any
Lender, or other person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower
(or any Subsidiary) and the beneficiary named in any such Letter of
Credit), other than any claim which the Borrower (or any Subsidiary
which is the account party with respect to a Letter of Credit) may have
against any applicable Letter of Credit Issuer for gross negligence or
wilful misconduct of such Letter of Credit Issuer in making payment
under any applicable Letter of Credit;
(iii) any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents: or
(v) the occurrence of any Default or Event of Default.
(f) To the extent the Letter of Credit Issuer is not indemnified by
the Borrower, the Participants will reimburse and indemnify the Letter of Credit
Issuer, in proportion to their respective Percentages, for and against any
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and all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by the Letter of Credit Issuer
in performing its respective duties in any way related to or arising out of its
issuance of Letters of Credit, PROVIDED that no Participants shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements resulting from the
Letter of Credit Issuer's gross negligence or willful misconduct.
3.5. INCREASED COSTS. If after the Effective Date, the adoption of
any applicable law, rule or regulation, or any change therein, 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 any Letter of Credit Issuer or any
Lender with any request or directive (whether or not having the force of law) by
any such authority, central bank or comparable agency (in each case made
subsequent to the Effective Date) shall either (i) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement against
Letters of Credit issued by such Letter of Credit Issuer or such Lender's
participation therein, or (ii) shall impose on such Letter of Credit Issuer or
any Lender any other conditions affecting this Agreement, any Letter of Credit
or such Lender's participation therein; and the result of any of the foregoing
is to increase the cost to such Letter of Credit Issuer or such Lender of
issuing, maintaining or participating in any Letter of Credit, or to reduce the
amount of any sum received or receivable by such Letter of Credit Issuer or such
Lender hereunder (other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of or a change in the rate
of taxes or similar charges), then, upon demand to the Borrower by such Letter
of Credit Issuer or such Lender (a copy of which notice shall be sent by such
Letter of Credit Issuer or such Lender to the Administrative Agent), the
Borrower shall pay to such Letter of Credit Issuer or such Lender such
additional amount or amounts as will compensate any such Letter of Credit Issuer
or such Lender for such increased cost or reduction. A certificate submitted to
the Borrower by any Letter of Credit Issuer or any Lender, as the case may be (a
copy of which certificate shall be sent by such Letter of Credit Issuer or such
Lender to the Administrative Agent), setting forth, in reasonable detail, the
basis for the determination of such additional amount or amounts necessary to
compensate any Letter of Credit Issuer or such Lender as aforesaid shall be
conclusive and binding on the Borrower absent manifest error, although the
failure to deliver any such certificate shall not release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this section 3.5.
Reference is hereby made to the provisions of sections 2.9(d) and 2.11 for
certain limitations upon the rights of a Letter of Credit Issuer or Lender under
this section.
3.6. GUARANTY OF SUBSIDIARY LETTER OF CREDIT OBLIGATIONS. (a) The
Borrower hereby unconditionally guarantees, for the benefit of the
Administrative Agent and the Lenders, the full and punctual payment of the
Obligations of each Subsidiary under each Letter of Credit Document to which
such Subsidiary is now or hereafter becomes a party. Upon failure by any such
Subsidiary to pay punctually any such amount, the Borrower shall forthwith on
demand by the Administrative Agent pay the amount not so paid at the place and
in the currency and otherwise in the manner specified in this Agreement or any
applicable Letter of Credit Document.
(b) As a separate, additional and continuing obligation, the
Borrower unconditionally and irrevocably undertakes and agrees, for the benefit
of the Administrative Agent and the Lenders, that, should any amounts not be
recoverable from the Borrower under section 3.6(a) for any reason whatsoever
(including, without limitation, by reason of any provision of any Credit
Document or any other agreement or instrument executed in connection therewith
being or becoming void, unenforceable, or otherwise invalid under any applicable
law) then, notwithstanding any notice or knowledge thereof by any Lender, the
Administrative Agent, any of their respective Affiliates, or any other person,
at any time, the Borrower as sole, original and independent obligor, upon demand
by the Administrative Agent, will make payment to the Administrative Agent, for
the account of the Lenders and the Administrative Agent, of all such obligations
not so recoverable by way of full indemnity, in such currency and otherwise in
such manner as is provided in the Credit Documents.
(c) The obligations of the Borrower under this section shall be
unconditional and absolute and, without limiting the generality of the foregoing
shall not be released, discharged or otherwise affected by the occurrence, one
or more times, of any of the following:
(i) any extension, renewal, settlement, compromise, waiver
or release in respect to any obligation of any Subsidiary under any
Letter of Credit Document, by operation of law or otherwise;
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(ii) any modification or amendment of or supplement to this
Agreement, any Note or any other Credit Document;
(iii) any release, non-perfection or invalidity of any direct
or indirect security for any obligation of the Borrower under this
Agreement, any Note or any other Credit Document or of any Subsidiary
under any Letter of Credit Document;
(iv) any change in the corporate existence, structure or
ownership of any Subsidiary or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Subsidiary or
its assets or any resulting release or discharge of any obligation of
any Subsidiary contained in any Letter of Credit Document;
(v) the existence of any claim, set-off or other rights
which the Borrower may have at any time against any Subsidiary, the
Administrative Agent, any Lender or any other person, whether in
connection herewith or any unrelated transactions;
(vi) any invalidity or unenforceability relating to or
against any Subsidiary for any reason of any Letter of Credit Document,
or any provision of applicable law or regulation purporting to prohibit
the payment by any Subsidiary of any Obligations in respect of any
Letter of Credit; or
(vii) any other act or omission to act or delay of any kind by
any Subsidiary, the Administrative Agent, any Lender or any other
person or any other circumstance whatsoever which might, but for the
provisions of this section, constitute a legal or equitable discharge
of the Borrower's obligations under this section.
(d) The Borrower's obligations under this section shall remain in
full force and effect until the Commitments shall have terminated and the
principal of and interest on the Notes and all other amounts payable by the
Borrower under the Credit Documents and by any Subsidiary under the Letter of
Credit Documents shall have been paid in full. If at any time any payment of any
of the Obligations of any Subsidiary in respect of any Letter of Credit
Documents is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of such Subsidiary, the Borrower's
obligations under this section with respect to such payment shall be reinstated
at such time as though such payment had been due but not made at such time.
(e) The Borrower irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any person against any
Subsidiary or any other person, or against any collateral or guaranty of any
other person.
(f) The Borrower hereby subordinates all rights, whether arising by
operation of law or otherwise, which it may have upon making any payment under
this section to be subrogated to the rights of the payee against any Subsidiary
with respect to such payment or otherwise to be reimbursed, indemnified or
exonerated by any Subsidiary in respect thereof, to the indefeasible payment in
full of all of the Obligations.
(g) In the event that acceleration of the time for payment of any
amount payable by any Subsidiary under any Letter of Credit Document is stayed
upon insolvency, bankruptcy or reorganization of such Subsidiary, all such
amounts otherwise subject to acceleration under the terms of any applicable
Letter of Credit Document shall nonetheless be payable by the Borrower under
this section forthwith on demand by the Administrative Agent.
SECTION 4. FEES; COMMITMENTS.
4.1. FEES. (a) COMMITMENT FEE. (i) The Borrower agrees to pay to the
Administrative Agent a commitment fee (the "COMMITMENT FEE") for the account of
each Non-Defaulting Lender for the period from and including the Effective Date
to, but not including, the Maturity Date or, if earlier, the date upon which the
Total Commitment has been terminated, computed for each day at a rate per annum
equal to the Applicable Commitment Fee Rate for such day on such Lender's
Unutilized Commitment for such day. The Commitment Fee shall be due and payable
in arrears on the first Business Day of each April, July, October and January
and on the Maturity Date or, if earlier, the date upon which the Total
Commitment has been terminated.
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(ii) As used herein the term "APPLICABLE COMMITMENT FEE RATE" shall
mean the particular rate per annum determined by the Administrative Agent in
accordance with the Pricing Grid Table which appears in section 2.7(g), based on
the Borrower's ratio of Consolidated Total Adjusted Debt to Consolidated EBITDA,
as computed in accordance with section 9.7 hereof, and such Pricing Grid Table,
and the following provisions:
(A) Initially, until changed hereunder in accordance with
the following provisions, the Applicable Commitment Fee Rate will be
25.00 basis points per annum.
(B) Commencing with the fiscal quarter of the Borrower ended
on or nearest to March 31, 2000, and continuing with each fiscal
quarter thereafter, the Administrative Agent will determine the
Applicable Commitment Fee Rate in accordance with the Pricing Grid
Table, based on the Borrower's ratio of (x) Consolidated Total Adjusted
Debt as of the end of the fiscal quarter, to (y) Consolidated EBITDA
for the Testing Period ended on the last day of the fiscal quarter, as
computed in accordance with section 9.7 hereof, and identified in such
Pricing Grid Table. Changes in the Applicable Commitment Fee Rate based
upon changes in such ratio shall become effective on the first day of
the month following the receipt by the Administrative Agent pursuant to
section 8.1(a) or (b) of the financial statements of the Borrower,
accompanied by the certificate and calculations referred to in section
8.1(c), demonstrating the computation of such ratio, based upon the
ratio in effect at the end of the applicable period covered (in whole
or in part) by such financial statements.
(C) Notwithstanding the above provisions, during any period
when (1) the Borrower has failed to timely deliver its consolidated
financial statements referred to in section 8.1(a) or (b), accompanied
by the certificate and calculations referred to in section 8.1(c), (2)
a Default under section 10.1(a) has occurred and is continuing, or (3)
an Event of Default has occurred and is continuing, the Applicable
Commitment Fee Rate shall be the highest rate per annum indicated
therefor in the Pricing Grid Table, regardless of the Borrower's ratio
of Consolidated Total Adjusted Debt to Consolidated EBITDA at such
time.
(D) Any changes in the Applicable Commitment Fee rate shall
be determined by the Administrative Agent in accordance with the above
provisions and the Administrative Agent will promptly provide notice of
such determinations to the Borrower and the Lenders. Any such
determination by the Administrative Agent pursuant to this section
4.1(a)(ii) shall be conclusive and binding absent manifest error.
(b) LETTER OF CREDIT FEES. The Borrower agrees to pay to the
Administrative Agent, for the account of each Non-Defaulting Lender, PRO RATA on
the basis of its Percentage, a fee in respect of each Letter of Credit (the
"LETTER OF CREDIT FEE"), computed for each day at the rate per annum equal to
the Applicable Eurodollar Margin then in effect on the Stated Amount of all
Letters of Credit outstanding on such day. Accrued Letter of Credit Fees shall
be due and payable quarterly in arrears on the first Business Day of each April,
July, October and January and on the date when the Total Commitment expires or
is terminated and no Letters of Credit remain outstanding. The Borrower also
agrees to pay to the Administrative Agent, for the account of each
Non-Defaulting Lender, PRO RATA on the basis of its Percentage, additional
Letter of Credit Fees, on demand, at the rate of 200 basis points per annum, on
the Stated Amount of each Letter of Credit, for any period when a Default under
section 10.1(a) or Event of Default is in existence.
(c) FACING FEES. The Borrower to pay directly to each Letter of
Credit Issuer a fee in respect of each Letter of Credit issued by it (a "FACING
FEE"), payable on the date of issuance (or any increase in the amount, or
renewal or extension) thereof, computed at the rate of 1/8 of 1% of the Stated
Amount thereof for the period from the date of issuance (or increase, renewal or
extension) to the expiration date thereof (including any extensions of such
expiration date which may be made at the election of the account party or the
beneficiary thereof).
(d) ADDITIONAL CHARGES OF LETTER OF CREDIT ISSUER. The Borrower
agrees to pay directly to each Letter of Credit Issuer upon each issuance of,
drawing under, and/or amendment, extension, renewal or transfer of, a Letter of
Credit issued by it such amount as shall at the time of such issuance, drawing,
amendment, extension, renewal or transfer be the administrative or processing
charge which such Letter of Credit Issuer is customarily charging for issuances
of, drawings under or amendments, extensions, renewals or transfers of, letters
of credit issued by it.
(e) OTHER FEES. The Borrower shall pay to the Administrative Agent,
on the Effective Date and thereafter, for its or their own account and/or for
distribution to the Lenders, such fees as heretofore agreed by the Borrower and
the Administrative Agent.
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(f) COMPUTATIONS OF FEES. All computations of Fees shall be made in
accordance with section 12.7(b).
4.2. VOLUNTARY TERMINATION/REDUCTION OF COMMITMENTS. Upon at least
three Business Days' prior written notice (or telephonic notice confirmed in
writing) to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrower shall have the right, without premium or penalty, to:
(a) terminate the Total Commitment, PROVIDED that (i) all
outstanding Loans are contemporaneously prepaid in accordance with
section 5.1, and (ii) either (A) no Letters of Credit remain
outstanding, or (B) the Borrower shall contemporaneously either (x)
cause all outstanding Letters of Credit to be surrendered for
cancellation (any such Letters of Credit to be replaced by letters of
credit issued by other financial institutions acceptable to the
Required Lenders), or (y) the Borrower shall pay to the Administrative
Agent an amount in cash and/or Cash Equivalents equal to 100% of the
Letter of Credit Outstandings and the Administrative Agent shall hold
such payment as security for the reimbursement obligations of the
Borrower hereunder in respect of Letters of Credit pursuant to a cash
collateral agreement to be entered into in form and substance
reasonably satisfactory to the Administrative Agent and the Borrower
(which shall permit certain investments in Cash Equivalents
satisfactory to the Administrative Agent and the Borrower until the
proceeds are applied to the secured obligations); and/or
(b) partially and permanently reduce the Unutilized Total
Commitment, PROVIDED that (i) any such reduction shall apply to
proportionately and permanently reduce the Commitment of each of the
Lenders; and (ii) any partial reduction of the Unutilized Total
Commitment pursuant to this section 4.2(b) shall be in the amount of at
least $1,000,000 (or, if greater, in integral multiples of $1,000,000).
4.3. MANDATORY TERMINATION/REDUCTION OF COMMITMENTS, ETC. (a) The
Total Commitment (and the Commitment of each Lender) shall terminate on March
10, 2000, unless the Closing Date has occurred on or prior to such date.
(b) The Total Commitment shall terminate (and the Commitment of each
Lender shall terminate) on the earlier of (x) the Maturity Date and (y) the date
on which a Change of Control occurs.
(c) If as of any date specified below the Borrower has not, pursuant
to section 4.2(b), permanently reduced the Total Commitment to no more than the
amount indicated for such date, THEN effective on such date the Total Commitment
as then in effect shall be automatically and permanently reduced, without
premium or penalty, to the amount indicated for such date:
================================================================================
AMOUNT OF
DATE TOTAL COMMITMENT
================================================================================
First Anniversary of Closing Date $72,000,000
--------------------------------------------------------------------------------
Second Anniversary of Closing Date $64,000,000
--------------------------------------------------------------------------------
Third Anniversary of Closing Date $56,000,000
================================================================================
Any such reduction shall apply to proportionately and permanently reduce the
Commitment of each of the Lenders.
(d) The Total Commitment shall be permanently reduced, without
premium or penalty, at the time that any mandatory prepayment of Loans would be
made pursuant to section 5.2(b), (c), (d) or (e) if Loans were then outstanding
in the full amount of the Total Commitment then in effect, in an amount equal to
the required prepayment of principal of Loans which would be required to be made
in such circumstance, PROVIDED that if no Event of Default is in existence, no
such reduction of the Total Commitment shall be required as a consequence of (x)
an Asset Sale or refinancing (including any issuance or sale of debt securities
by the Borrower) consisting of the Borrower's existing Tyler Boulevard
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Facility, or (y) an Asset Sale or refinancing (including any issuance or sale of
debt securities by the Borrower) consisting of the Borrower's existing Alpha
Drive Facility. Any reduction in the Total Commitment made pursuant to this
section 4.3(d) shall apply to proportionately and permanently reduce the
Commitment of each of the Lenders. The Borrower will provide at least three
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), of any
reduction of the Total Commitment pursuant to this section 4.3(d), specifying
the date and amount of the reduction.
SECTION 5. PAYMENTS.
5.1. VOLUNTARY PREPAYMENTS. The Borrower shall have the right to
prepay any of its Loans, in whole or in part, without premium or penalty, from
time to time, but only on the following terms and conditions:
(a) the Borrower shall give the Administrative Agent at the
Notice Office written or telephonic notice (in the case of telephonic
notice, promptly confirmed in writing if so requested by the
Administrative Agent) of its intent to prepay the Loans, the amount of
such prepayment and (in the case of Eurodollar Loans) the specific
Borrowing(s) pursuant to which made, which notice shall be received by
the Administrative Agent by
(x) 12:00 noon (local time at the Notice Office)
three Business Days prior to the date of such prepayment, in
the case of any prepayment of Eurodollar Loans, or
(y) 12:00 noon (local time at the Notice Office) on
the date of such prepayment, in the case of any prepayment of
Prime Rate Loans,
and which notice shall promptly be transmitted by the Administrative
Agent to each of the affected Lenders;
(b) each partial prepayment by the Borrower of any Borrowing
shall be in an aggregate principal amount of (i) at least $100,000, or
an integral multiple of $100,000 in excess thereof, in the case of
Loans which are Prime Rate Loans, or (ii) at least $1,000,000, or an
integral multiple of $500,000 in excess thereof, in the case of Loans
which are Eurodollar Loans;
(c) no partial prepayment of Eurodollar Loans of the
Borrower made pursuant to a Borrowing shall reduce the aggregate
principal amount of the Eurodollar Loans outstanding pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount
applicable thereto;
(d) each prepayment in respect of any Loans made pursuant to
a Borrowing shall be applied PRO RATA among such Loans; and
(e) each prepayment of Eurodollar Loans pursuant to this
section 5.1 on any date other than the last day of the Interest Period
applicable thereto shall be accompanied by any amounts payable in
respect thereof under section 2.10.
5.2. MANDATORY PREPAYMENTS. The Loans shall be subject to mandatory
prepayment in accordance with the following provisions:
(a) MANDATORY PREPAYMENT---IF OUTSTANDING LOANS AND LETTER
OF CREDIT OUTSTANDINGS EXCEED TOTAL COMMITMENT. If on any date (after
giving effect to any other payments on such date) the sum of (i) the
aggregate outstanding principal amount of Loans PLUS (ii) the aggregate
amount of Letter of Credit Outstandings, exceeds the Total Commitment
as then in effect, the Borrower shall prepay on such date that
principal amount of Loans and, after Loans have been paid in full,
Unpaid Drawings, in an aggregate amount at least equal to such excess
and conforming in the case of partial prepayments of Loans to the
requirements as to the amounts of partial prepayments of Loans which
are contained in section 5.1. If, after giving effect to the prepayment
of Loans and Unpaid Drawings, the aggregate amount of Letter of Credit
Outstandings exceeds the Total Commitment as then in effect, the
Borrower shall pay to the Administrative Agent an amount in cash and/or
Cash Equivalents equal to such excess and the Administrative Agent
shall hold such payment as security for the
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reimbursement obligations of the Borrower hereunder in respect of
Letters of Credit pursuant to a cash collateral agreement to be entered
into in form and substance reasonably satisfactory to the
Administrative Agent and the Borrower (which shall permit certain
investments in Cash Equivalents satisfactory to the Administrative
Agent and the Borrower until the proceeds are applied to the secured
obligations).
(b) MANDATORY PREPAYMENT---CERTAIN PROCEEDS OF ASSET SALES.
If during any fiscal year of the Borrower, the Borrower and its
Subsidiaries have received cumulative Cash Proceeds during such fiscal
year from one or more Asset Sales of at least $3,000,000, THEN not
later than the third Business Day following the date of receipt of any
Cash Proceeds in excess of such amount, an amount, conforming to the
requirements as to the amount of partial prepayments contained in
section 5.1, at least equal to 100% of the Net Cash Proceeds then
received in excess of such amount from any such Asset Sale, shall be
applied as a mandatory prepayment of principal of the outstanding
Loans; PROVIDED, that (i) if no Default under section 10.1(a) or Event
of Default shall have occurred and be continuing, (ii) the Borrower and
its Subsidiaries have scheduled Consolidated Capital Expenditures
during the following 12 months, and (iii) the Borrower notifies the
Administrative Agent of the amount and nature thereof and of its
intention to reinvest all or a portion of such Net Cash Proceeds in
such Consolidated Capital Expenditures during such 12 month period,
then no such prepayment shall be required to the extent of the amount
which the Borrower so indicates will be so reinvested. If at the end of
any such 12 month period any portion of such Net Cash Proceeds has not
been so reinvested, the Borrower will immediately make a prepayment of
the outstanding Loans as provided above in an amount, conforming to the
requirements as to amount of prepayments contained in section 5.1, at
least equal to such remaining amount.
(c) MANDATORY PREPAYMENT---CERTAIN PROCEEDS OF EQUITY SALES.
Not later than the Business Day following the date of the receipt by
the Borrower and/or any Subsidiary of the cash proceeds (net of
underwriting discounts and commissions, placement agent fees and other
customary fees and costs associated therewith) from any sale or
issuance of equity securities by the Borrower or any Subsidiary after
the Closing Date (other than (i) any inter-company sale to the Borrower
or any Subsidiary and (ii) any sale or issuance to management,
employees (or key employees) or directors pursuant to stock option or
similar plans for the benefit of management, employees (key employees)
or directors generally), the Borrower will prepay the principal of the
outstanding Loans, in an aggregate amount, conforming to the
requirements as to the amounts of partial prepayments contained in
section 5.1, which is not less than (x) 100% of such net proceeds, or
(y) if less, an amount equal to the then aggregate outstanding
principal amount of the outstanding Loans, if any.
(d) MANDATORY PREPAYMENT---CERTAIN PROCEEDS OF DEBT
SECURITIES. Not later than the Business Day following the date of the
receipt by the Borrower of the cash proceeds (net of underwriting
discounts and commissions, placement agent fees and other customary
fees and costs associated therewith) from any sale or issuance of debt
securities by the Borrower after the Closing Date in an underwritten
public offering, Rule 144A offering, or private placement or other form
of loan transaction with one or more institutional investors, the
Borrower will prepay the principal of the outstanding Loans, in an
aggregate amount, conforming to the requirements as to the amounts of
partial prepayments contained in section 5.1, which is not less than
(x) 100% of such net proceeds, or (y) if less, an amount equal to the
then aggregate outstanding principal amount of the outstanding Loans,
if any.
(e) MANDATORY PREPAYMENT---CERTAIN PROCEEDS OF AN EVENT OF
LOSS. If during any fiscal year of the Borrower, the Borrower and its
Subsidiaries have received cumulative Cash Proceeds during such fiscal
year from one or more Events of Loss of at least $1,000,000, not later
than the third Business Day following the date of receipt of any Cash
Proceeds in excess of such amount, an amount, conforming to the
requirements as to the amount of partial prepayments contained in
section 5.1, at least equal to 100% of the Net Cash Proceeds then
received in excess of such amount from any Event of Loss, shall be
applied as a mandatory prepayment of principal of the outstanding
Loans, if any.
Notwithstanding the foregoing, in the event any property
suffers an Event of Loss and (i) the Cash Proceeds received in any
fiscal year as a result of such Event of Loss are less than $1,000,000,
(ii) no Default under section 10.1(a) or Event of Default has occurred
and is continuing, (iii) the Borrower notifies the Administrative Agent
and the Lenders in writing that it intends to rebuild or restore the
affected property, that such rebuilding or restoration can be
accomplished within 18 months out of such Cash Proceeds and other funds
available to the Borrower, THEN no such prepayment of the Loans shall
be required if the Borrower immediately
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deposits such Cash Proceeds in a cash collateral deposit account over
which the Collateral Agent shall have sole dominion and control, and
which shall constitute part of the Collateral under the Security
Documents and may be applied as provided in section 10.3 if an Event of
Default occurs and is continuing. So long as no Default under section
10.1(a) or Event of Default has occurred and is continuing, the
Collateral Agent is authorized to disburse amounts from such cash
collateral deposit account to or at the direction of the Borrower for
application to the costs of rebuilding or restoration of the affected
property. Any amounts not so applied to the costs of rebuilding or
restoration or as provided in section 10.3 shall be applied to the
prepayment of the Loans as provided above.
(f) MANDATORY PREPAYMENT---CHANGE OF CONTROL. On the date of
which a Change of Control occurs, notwithstanding anything to the
contrary contained in this Agreement, no further Borrowings shall be
made and the then outstanding principal amount of all Loans, if any,
shall become due and payable and shall be prepaid in full, and the
Borrower shall contemporaneously either (i) cause all outstanding
Letters of Credit to be surrendered for cancellation (any such Letters
of Credit to be replaced by letters of credit issued by other financial
institutions acceptable to the Required Lenders), or (ii) the Borrower
shall pay to the Administrative Agent an amount in cash and/or Cash
Equivalents equal to 100% of the Letter of Credit Outstandings and the
Administrative Agent shall hold such payment as security for the
reimbursement obligations of the Borrower hereunder in respect of
Letters of Credit pursuant to a cash collateral agreement to be entered
into in form and substance reasonably satisfactory to the
Administrative Agent and the Borrower (which shall permit certain
investments in Cash Equivalents satisfactory to the Administrative
Agent and the Borrower until the proceeds are applied to the secured
obligations).
(g) PARTICULAR LOANS TO BE PREPAID. With respect to each
repayment or prepayment of Loans required by this section 5.2, the
Borrower shall designate the Types of Loans which are to be prepaid and
the specific Borrowing(s) pursuant to which such repayment or
prepayment is to be made, PROVIDED that (i) the Borrower shall first so
designate all Loans that are Prime Rate Loans and Eurodollar Loans with
Interest Periods ending on the date of repayment or prepayment prior to
designating any other Eurodollar Loans for repayment or prepayment,
(ii) if the outstanding principal amount of Eurodollar Loans made
pursuant to a Borrowing is reduced below the applicable Minimum
Borrowing Amount as a result of any such repayment or prepayment, then
all the Loans outstanding pursuant to such Borrowing shall be converted
into Prime Rate Loans, and (iii) each repayment and prepayment of any
Loans made pursuant to a Borrowing shall be applied PRO RATA among such
Loans. In the absence of a designation by the Borrower as described in
the preceding sentence, the Administrative Agent shall, subject to the
above, make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under section 2.10. Any
repayment or prepayment of Eurodollar Loans pursuant to this section
5.2 shall in all events be accompanied by such compensation as is
required by section 2.10.
5.3. METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its PRO RATA share) account of
the Lenders entitled thereto, not later than 12:00 noon (local time at the
Payment Office) on the date when due and shall be made in immediately available
funds and in lawful money of the United States of America at the Payment Office,
it being understood that written notice by the Borrower to the Administrative
Agent to make a payment from the funds in the Borrower's account at the Payment
Office shall constitute the making of such payment to the extent of such funds
held in such account. Any payments under this Agreement which are made later
than 12:00 noon (local time at the Payment Office) shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
5.4. NET PAYMENTS. (a) All payments made by the Borrower hereunder,
under any Note or any other Credit Document, will be made without setoff,
counterclaim or other defense. Except as provided for in section 5.4(c), all
such payments will be made free and clear of, and without deduction or
withholding for, any present or future United States withholding taxes. The
Borrower will furnish to the Administrative Agent within 45 days after the date
of any withholding or deduction on account of United States withholding taxes
certified copies of tax receipts, or other evidence satisfactory to the Lender,
evidencing such payment by the Borrower.
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(b) Each Lender that is not a United States person (as such term is
defined in section 7701(a)(30) of the Code) for Federal income tax purposes
agrees to provide to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the cases of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to section 12.4 (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer and such Lender is in compliance with the provisions of
this section 5.4(b)), on the date of such assignment or transfer to such Lender,
(i) two accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001 (or successor forms) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments to be made under this Agreement, any Note or any other Credit Document,
or (ii) if the Lender is not a "bank" within the meaning of section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit G (any such certificate, a "SECTION 5.4(B)(II) CERTIFICATE") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement, any Note or any other Credit Document.
In addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Borrower and the Administrative Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
Section 5.4(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement, any Note or any other Credit Document,
or it shall immediately notify the Borrower and the Administrative Agent of its
inability to deliver any such Form or Certificate, in which case such Lender
shall not be required to deliver any such Form or Certificate pursuant to this
section 5.4(b).
(c) Notwithstanding anything to the contrary contained in section
5.4(a), the Borrower shall be entitled, to the extent it is required to do so by
law, to deduct or withhold income or other similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in section
7701(a)(30) of the Code) for United States federal income tax purposes and which
has not provided to the Borrower such forms that establish a complete exemption
from such deduction or withholding (i) if such Lender has not provided to the
Borrower the Internal Revenue Service forms required to be provided to the
Borrower pursuant to section 5.4(b), or (ii) in the case of a payment other than
interest, to a Lender described in clause (ii) of section 5.2(b) above, to the
extent that such forms do not establish a complete exemption from withholding of
such taxes.
SECTION 6. CONDITIONS PRECEDENT.
6.1. CONDITIONS PRECEDENT AT CLOSING DATE. The obligation of the
Lenders to make Loans, and of any Letter of Credit Issuer to issue Letters of
Credit, is subject to the satisfaction of each of the following conditions on
the Closing Date:
(a) EFFECTIVENESS; NOTES. On or prior to the Closing Date,
(i) the Effective Date shall have occurred and (ii) there shall have
been delivered to the Administrative Agent for the account of each
Lender the appropriate Note or Notes executed by the Borrower, in each
case, in the amount, maturity and as otherwise provided herein.
(b) FEES, ETC. The Borrower shall have paid or caused to be
paid all fees required to be paid by it on or prior to such date
pursuant to section 4.1 hereof and all reasonable fees and expenses of
the Administrative Agent and of special counsel to the Administrative
Agent which have been invoiced on or prior to such date in connection
with the preparation, execution and delivery of this Agreement and the
other Credit Documents and the consummation of the transactions
contemplated hereby and thereby.
(c) OTHER CREDIT DOCUMENTS. The Credit Parties named therein
shall have duly executed and delivered and there shall be in full force
and effect, and original counterparts shall have been delivered to the
Administrative Agent, in sufficient quantities for the Lenders, of, (i)
the Subsidiary Guaranty (as modified, amended or supplemented from time
to time in accordance with the terms thereof and hereof, the
"SUBSIDIARY GUARANTY"), substantially in the form attached hereto as
Exhibit C-1, (ii) the Security Agreement (as modified,
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amended or supplemented from time to time in accordance with the terms
thereof and hereof, the "SECURITY AGREEMENT"), substantially in the
form attached hereto as Exhibit C-2; (iii) the Collateral Assignment of
Patents and Security Agreement (as modified, amended or supplemented
from time to time in accordance with the terms thereof and hereof, the
"COLLATERAL ASSIGNMENT OF PATENTS"), substantially in the form attached
hereto as Exhibit C-3; (iv) the Collateral Assignment of Trademarks and
Security Agreement (as modified, amended or supplemented from time to
time in accordance with the terms thereof and hereof, the "COLLATERAL
ASSIGNMENT OF TRADEMARKS"), substantially in the form attached hereto
as Exhibit C-4; and (v) the Pledge Agreement (as modified, amended or
supplemented from time to time in accordance with the terms thereof and
hereof, the "PLEDGE AGREEMENT"), substantially in the form attached
hereto as Exhibit D.
(d) CORPORATE RESOLUTIONS AND APPROVALS. The Administrative
Agent shall have received, in sufficient quantity for the
Administrative Agent and the Lenders, certified copies of the
resolutions of the Board of Directors of the Borrower and each other
Credit Party, approving the Credit Documents to which the Borrower or
any such other Credit Party, as the case may be, is or may become a
party, and of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to the execution,
delivery and performance by the Borrower or any such other Credit Party
of the Credit Documents to which it is or may become a party.
(e) INCUMBENCY CERTIFICATES. The Administrative Agent shall
have received, in sufficient quantity for the Administrative Agent and
the Lenders, a certificate of the Secretary or an Assistant Secretary
of the Borrower and of each other Credit Party, certifying the names
and true signatures of the officers of the Borrower or such other
Credit Party, as the case may be, authorized to sign the Credit
Documents to which the Borrower or such other Credit Party is a party
and any other documents to which the Borrower or any such other Credit
Party is a party which may be executed and delivered in connection
herewith.
(f) OPINION OF COUNSEL. On the Closing Date, the
Administrative Agent shall have received an opinion, addressed to the
Administrative Agent and each of the Lenders and dated the Closing
Date, from Kahn, Kleinman, Xxxxxxxx & Xxxxxx, special counsel to the
Borrower, substantially in the form of Exhibit E hereto and covering
such other matters incident to the transactions contemplated hereby as
the Administrative Agent may reasonably request, such opinion to be in
form and substance satisfactory to the Administrative Agent.
(g) EXISTING CREDIT AGREEMENT. The Borrower shall have
terminated the commitments of the lenders under its existing Credit
Agreement, dated as of May 1, 1998, as amended, shall have prepaid all
borrowings thereunder, shall have made effective provision satisfactory
to the Administrative Agent for the termination, or assignment to the
Collateral Agent, of the liens and security thereunder, and if required
in connection with such termination, made effective provision for any
letters of credit issued thereunder to be supported or replaced by
Letters of Credit issued (or deemed issued) hereunder.
(h) FINANCIAL CERTIFICATE. The Borrower shall have delivered
to the Administrative Agent, in sufficient quantities for the Lenders,
a certificate of a responsible financial or accounting officer of the
Borrower, containing calculations, in reasonable detail, as to the
computation of the Borrower's ratio of Consolidated Total Adjusted Debt
to Consolidated EBITDA for the most recent Testing Period for which
financial information has been furnished to the Lenders hereunder.
(i) RECORDATION OF SECURITY DOCUMENTS, DELIVERY OF
COLLATERAL, TAXES, ETC. The Security Documents (or proper notices or
financing statements in respect thereof) shall have been duly recorded,
published and filed in such manner and in such places as is required by
law to establish, perfect, preserve and protect the rights and security
interests of the parties thereto and their respective successors and
assigns, all collateral items required to be physically delivered to
the Collateral Agent thereunder shall have been so delivered,
accompanied by any appropriate instruments of transfer, and all taxes,
fees and other charges then due and payable in connection with the
execution, delivery, recording, publishing and filing of such
instruments and the issue and delivery of the Notes shall have been
paid in full.
(j) EVIDENCE OF INSURANCE. The Collateral Agent shall have
received certificates of insurance and other evidence, satisfactory to
it, of compliance with the insurance requirements of this Agreement and
the Security Documents.
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(k) SEARCH REPORTS. The Administrative Agent shall have
received completed requests for information on Form UCC-11, or search
reports from one or more commercial search firms acceptable to the
Administrative Agent, listing all of the effective financing statements
filed against the Borrower in any jurisdiction in which the Borrower
maintains an office or in which any Collateral of the Borrower is
located, together with copies of such financing statements.
(l) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings and all documents incidental to the transactions
contemplated hereby shall be satisfactory in substance and form to the
Administrative Agent and the Lenders and the Administrative Agent and
its special counsel and the Lenders shall have received all such
counterpart originals or certified or other copies of such documents as
the Administrative Agent or its special counsel or any Lender may
reasonably request.
6.2. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The obligations of
the Lenders to make each Loan and/or of a Letter of Credit Issuer to issue each
Letter of Credit is subject, at the time thereof, to the satisfaction of the
following conditions:
(a) NOTICE OF BORROWING, ETC. The Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of section
2.3 with respect to the incurrence of Loans or a Letter of Credit
Request meeting the requirement of section 3.2 with respect to the
issuance of a Letter of Credit.
(b) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time
of each Credit Event and also after giving effect thereto, (i) there
shall exist no Default or Event of Default and (ii) all representations
and warranties of the Credit Parties contained herein or in the other
Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties had
been made on and as of the date of such Credit Event, except to the
extent that such representations and warranties expressly relate to an
earlier specified date, in which case such representations and
warranties shall have been true and correct in all material respects as
of the date when made.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in section 6.1 and/or 6.2, as the case may
be, exist as of that time. All of the certificates, legal opinions and other
documents and papers referred to in this section 6, unless otherwise specified,
shall be delivered to the Administrative Agent for the account of each of the
Lenders and, except for the Notes, in sufficient counterparts for each of the
Lenders, and the Administrative Agent will promptly distribute to the Lenders
their respective Notes and the copies of such other certificates, legal opinions
and documents.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to make
the Loans, and/or to issue and/or to participate in the Letters of Credit
provided for herein, the Borrower makes the following representations and
warranties to, and agreements with, the Lenders, all of which shall survive the
execution and delivery of this Agreement and each Credit Event:
7.1. CORPORATE STATUS, ETC. Each of the Borrower and its Subsidiaries
(i) is a duly organized or formed and validly existing corporation, partnership
or limited liability company, as the case may be, in good standing under the
laws of the jurisdiction of its formation and has the corporate, partnership or
limited liability company power and authority, as applicable, to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage, and (ii) has duly qualified and is authorized to
do business in all jurisdictions where it is required to be so qualified except
where the failure to be so qualified would not be reasonably likely to have a
Material Adverse Effect.
7.2. SUBSIDIARIES. Annex II hereto lists, as of the date hereof, each
Subsidiary of the Borrower (and the direct and indirect ownership interest of
the Borrower therein).
7.3. CORPORATE POWER AND AUTHORITY, ETC. Each Credit Party has the
corporate or other organizational power and authority to execute, deliver and
carry out the terms and provisions of the Credit Documents to which it is
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party and has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Credit Documents to
which it is party. Each Credit Party has duly executed and delivered each Credit
Document to which it is party and each Credit Document to which it is party
constitutes the legal, valid and binding agreement or obligation of such Credit
Party enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
7.4. NO VIOLATION. Neither the execution, delivery and performance by
any Credit Party of the Credit Documents to which it is party nor compliance
with the terms and provisions thereof (i) will contravene any provision of any
law, statute, rule, regulation, order, writ, injunction or decree of any court
or governmental instrumentality applicable to such Credit Party or its
properties and assets, (ii) will conflict with or result in any breach of, any
of the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of such Credit Party
(other than the Liens provided for in the Security Documents) pursuant to the
terms of any promissory note, bond, debenture, indenture, mortgage, deed of
trust, credit or loan agreement, or any other material agreement or other
instrument, to which such Credit Party is a party or by which it or any of its
property or assets are bound or to which it may be subject, or (iii) will
violate any provision of the certificate or articles of incorporation, by-laws,
or other charter documents of such Credit Party.
7.5. GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required as a
condition to (i) the execution, delivery and performance by any Credit Party of
any Credit Document to which it is a party, or (ii) the legality, validity,
binding effect or enforceability of any Credit Document to which any Credit
Party is a party, except the filing and recording of financing statements and
other documents necessary in order to perfect the Liens created by the Security
Documents
7.6. LITIGATION. There are no actions, suits or proceedings pending
or, to, the knowledge of the Borrower, threatened with respect to the Borrower
or any of its Subsidiaries (i) that individually or in the aggregate have, or
are reasonably likely to have, a Material Adverse Effect, or (ii) which question
the validity or enforceability of any of the Credit Documents, or of any action
to be taken by any Credit Party pursuant to any of the Credit Documents.
7.7. USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of Loans
shall be utilized to retire the Indebtedness referred to in section 6.1(g), to
finance Permitted Acquisitions, to finance Restricted Stock Payments made in
accordance with section 9.6, and for general corporate purposes (including
working capital) not inconsistent with the requirements of this Agreement.
(b) No part of the proceeds of any Credit Event will be used
directly or indirectly to purchase or carry Margin Stock, or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock, in violation
of the requirements of the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying any
Margin Stock. At no time would more than 25% of the value of the assets of the
Borrower or of the Borrower and its consolidated Subsidiaries that are subject
to any "arrangement" (as such term is used in section 221.2(g) of such
Regulation U) hereunder be represented by Margin Stock.
7.8. FINANCIAL STATEMENTS, ETC. (a) The Borrower has furnished to the
Lenders and the Administrative Agent complete and correct copies of (i) the
audited consolidated balance sheets of the Borrower and its consolidated
subsidiaries as of December 31, 1998, and December 31, 1997, and the related
audited consolidated statements of income, changes in shareholders' equity, and
cash flows for each of the three years in the period ended December 31, 1998,
accompanied by the unqualified report thereon of the Borrower's independent
accountants, as contained in the Report on Form 10-K filed by the Borrower with
the SEC for its fiscal year ended December 31, 1998; and (ii) the unaudited
condensed consolidated balance sheets of the Borrower and its consolidated
subsidiaries as of September 30, 1999, and the related unaudited condensed
consolidated statements of income and of cash flows of the Borrower and its
consolidated
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subsidiaries for the fiscal quarter or quarters then ended, as contained in the
Form 10-Q Quarterly Report of the Borrower filed with the SEC for such fiscal
quarter. All such financial statements have been prepared in accordance with
GAAP, consistently applied (except as stated therein), and fairly present the
financial position of the Borrower and its consolidated subsidiaries as of the
respective dates indicated and the consolidated results of their operations and
cash flows for the respective periods indicated, subject in the case of any such
financial statements which are unaudited, to normal audit adjustments, none of
which could reasonably be expected to involve a Material Adverse Effect.
(b) The Borrower has received consideration which is the
reasonable equivalent value of the obligations and liabilities that the Borrower
has incurred to the Administrative Agent and the Lenders. As of the Closing
Date, the Borrower has capital sufficient to carry on its business and
transactions and all business and transactions in which it is about to engage
and is now solvent and able to pay its debts as they mature and the Borrower, as
of the Closing Date, owns property having a value, both at fair valuation and at
present fair salable value, greater than the amount required to pay the
Borrower's debts; and the Borrower is not entering into the Credit Documents
with the intent to hinder, delay or defraud its creditors. Without limitation of
the foregoing, on and as of the Closing Date, and after giving effect to all
Indebtedness incurred and to be incurred by the Borrower and its Subsidiaries in
connection herewith, (i) the sum of the assets, at a fair valuation, of the
Borrower will exceed its debts, (ii) the Borrower will not have incurred or
intended to, or believe that it will, incur debts beyond its ability to pay such
debts as such debts mature and (iii) the Borrower will have sufficient capital
with which to conduct its business. For purposes of this section 7.8(b), "DEBT"
means any liability on a claim, and "CLAIM" means (x) right to payment whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(c) The Borrower has delivered or caused to be delivered to the
Lenders prior to the execution and delivery of this Agreement (i) a copy of the
Borrower's Report on Form 10-K as filed with the SEC for its fiscal year ended
December 31, 1998, which contains as of its date a general description of the
business and affairs of the Borrower and its Subsidiaries, (ii) a confidential
information brochure dated January 2000 prepared by the Administrative Agent
(with assistance from the Borrower) which contains information with respect to
the business, properties and operations of the Borrower and its Subsidiaries
(the "CONFIDENTIAL INFORMATION MEMORANDUM"), and (iii) financial projections
prepared by management of the Borrower for the Borrower and its Subsidiaries for
the fiscal years 2000-2002, which are included as Part VIII of the Confidential
Information Memorandum (the "FINANCIAL PROJECTIONS"). The Financial Projections
were prepared on behalf of the Borrower in good faith after taking into account
the existing and historical levels of business activity of the Borrower and its
Subsidiaries, known trends, including general economic trends, and all other
information, assumptions and estimates considered by management of the Borrower
and its Subsidiaries to be pertinent thereto. The Financial Projections were
considered by management of the Borrower, as of such date of preparation, to be
realistically achievable; PROVIDED, that no representation or warranty is made
as to the impact of future general economic conditions or as to whether the
Borrower's projected consolidated results as set forth in the Financial
Projections will actually be realized. No facts are known to the Borrower at the
date hereof which, if reflected in the Financial Projections, would be
reasonably likely to result in a material adverse change in the assets,
liabilities, results of operations or cash flows reflected therein.
7.9. NO MATERIAL ADVERSE CHANGE. Since December 31, 1998, there has
not been any change in the condition, business or affairs of the Borrower and
its Subsidiaries taken as a whole, or their properties and assets considered as
an entirety, except for changes, none of which, individually or in the
aggregate, has had or is reasonably likely to have, a Material Adverse Effect.
7.10. TAX RETURNS AND PAYMENTS. Each of the Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith. The
Borrower and each of its Subsidiaries has established on its books such charges,
accruals and reserves in respect of taxes, assessments, fees and other
governmental charges for all fiscal periods as are required by GAAP. The
Borrower knows of no proposed assessment for additional federal, foreign or
state taxes for any period, or of any basis therefor, which, individually or in
the aggregate, taking into account such charges, accruals and reserves in
respect thereof as the Borrower and its Subsidiaries have made, is reasonably
likely to have a Material Adverse Effect.
7.11. TITLE TO PROPERTIES, ETC. (a) The Borrower and each of its
Subsidiaries has good and marketable title, in the case of real property, and
good title (or valid Leaseholds, in the case of any leased property), in the
case of all other
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property, to all of its properties and assets free and clear of Liens other than
Liens permitted by section 9.3. The interests of the Borrower and each of its
Subsidiaries in the properties reflected in the most recent balance sheet
referred to in section 7.8, taken as a whole, were sufficient, in the judgment
of the Borrower, as of the date of such balance sheet for purposes of the
ownership and operation of the businesses conducted by the Borrower and such
Subsidiaries.
(b) As of the date of the most recent balance sheet referred to in
section 7.8 and as of the Closing Date, neither the Borrower or any of its
Subsidiaries owned in fee any Real Property located in the United States, other
than certain Real Property encumbered by mortgages referred to in Annex III to
this Agreement.
7.12. LAWFUL OPERATIONS, ETC. The Borrower and each of its
Subsidiaries (i) holds all governmental licenses, registrations, certifications,
permits and authorizations, both domestic and foreign, which are necessary to
conduct its business, and (ii) is in full compliance with all material
requirements imposed by law, regulation or rule, whether domestic or foreign,
which are applicable to it, its operations, or its properties and assets,
including without limitation, applicable requirements of Environmental Laws,
EXCEPT for any failure to obtain and maintain in effect, or noncompliance,
which, individually or in the aggregate, is not reasonably likely to have a
Material Adverse Effect.
7.13. ENVIRONMENTAL MATTERS. (a) The Borrower and each of its
Subsidiaries is in compliance with all Environmental Laws governing its business
except to the extent that any such failure to comply (together with any
resulting penalties, fines or forfeitures) is not reasonably likely to have a
Material Adverse Effect. All licenses, permits, registrations or approvals
required for the business of the Borrower and each of its Subsidiaries, as
conducted as of the Closing Date, under any Environmental Law have been secured
and the Borrower and each of its Subsidiaries is in substantial compliance
therewith, except for such licenses, permits, registrations or approvals the
failure to secure or to comply therewith is not reasonably likely to have a
Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries has
received written notice, or otherwise knows, that it is in any respect in
noncompliance with, breach of or default under any applicable writ, order,
judgment, injunction, or decree to which the Borrower or such Subsidiary is a
party or which would affect the ability of the Borrower or such Subsidiary to
operate any real property and no event has occurred and is continuing which,
with the passage of time or the giving of notice or both, would constitute
noncompliance, breach of or default thereunder, except in each such case, such
noncompliance, breaches or defaults as would not reasonably be likely to, in the
aggregate, have a Material Adverse Effect. There are as of the Closing Date no
Environmental Claims pending or, to the best knowledge of the Borrower,
threatened wherein an unfavorable decision, ruling or finding would reasonably
be likely to have a Material Adverse Effect. There are no facts, circumstances,
conditions or occurrences on any Real Property now or at any time owned, leased
or operated by the Borrower or any of its Subsidiaries or on any property
adjacent to any such Real Property, which are known by the Borrower or as to
which the Borrower or any such Subsidiary has received written notice, that
could reasonably be expected (i) to form the basis of an Environmental Claim
against the Borrower or any of its Subsidiaries or any Real Property of the
Borrower or any of its Subsidiaries, or (ii) to cause such Real Property to be
subject to any restrictions on the ownership, occupancy, use or transferability
of such Real Property under any Environmental Law, except in each such case,
such Environmental Claims or restrictions that individually or in the aggregate
would not reasonably be likely to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated,
used, treated or stored on, or transported to or from, any Real Property of the
Borrower or any of its Subsidiaries or (ii) released on any such Real Property,
in each case where such occurrence or event is not in compliance with
Environmental Laws and is reasonably likely to have a Material Adverse Effect.
7.14. COMPLIANCE WITH ERISA. Compliance by the Borrower with the
provisions hereof and Credit Events contemplated hereby will not involve any
prohibited transaction within the meaning of ERISA or section 4975 of the Code.
The Borrower and each of its Subsidiaries, (i) has fulfilled all obligations
under minimum funding standards of ERISA and the Code with respect to each Plan
that is not a Multiemployer Plan or a Multiple Employer Plan, (ii) has satisfied
all respective contribution obligations in respect of each Multiemployer Plan
and each Multiple Employer Plan, (iii) is in compliance in all material respects
with all other applicable provisions of ERISA and the Code with respect to each
Plan, each Multiemployer Plan and each Multiple Employer Plan, and (iv) has not
incurred any liability under the Title IV of ERISA to the PBGC with respect to
any Plan, any Multiemployer Plan, any Multiple Employer Plan, or any trust
established thereunder. No Plan or trust created thereunder has been terminated,
and there have been no Reportable Events, with respect to any Plan or trust
created thereunder or with respect to any Multiemployer Plan or Multiple
Employer Plan, which termination or Reportable Event will or could result in the
termination of such Plan, Multiemployer
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Plan or Multi Employer Plan and give rise to a material liability of the
Borrower or any ERISA Affiliate in respect thereof. Neither the Borrower nor any
ERISA Affiliate is at the date hereof, or has been at any time within the two
years preceding the date hereof, an employer required to contribute to any
Multiemployer Plan or Multi Employer Plan, or a "contributing sponsor" (as such
term is defined in section 4001 of ERISA) in any Multiemployer Plan or Multiple
Employer Plan. Neither the Borrower nor any ERISA Affiliate has any contingent
liability with respect to any post-retirement "welfare benefit plan" (as such
term is defined in ERISA) except as has been disclosed to the Lenders in
writing.
7.15. INTELLECTUAL PROPERTY, ETC. The Borrower and each of its
Subsidiaries has obtained or has the right to use all material patents,
trademarks, servicemarks, trade names, copyrights, licenses and other rights
with respect to the foregoing necessary for the present and planned future
conduct of its business, without any known conflict with the rights of others,
EXCEPT for such patents, trademarks, servicemarks, trade names, copyrights,
licenses and rights, the loss of which, and such conflicts, which in any such
case individually or in the aggregate would not be reasonably likely to have a
Material Adverse Effect.
7.16. INVESTMENT COMPANY ACT, ETC. Neither the Borrower nor any of its
Subsidiaries is subject to regulation with respect to the creation or incurrence
of Indebtedness under the Investment Company Act of 1940, as amended, the ICC
Termination Act of 1995, as amended, the Federal Power Act, as amended, the
Public Utility Holding Company Act of 1935, as amended, or any applicable state
public utility law.
7.17. BURDENSOME CONTRACTS; LABOR RELATIONS. Neither the Borrower nor
any of its Subsidiaries (i) is subject to any unduly burdensome contract,
agreement, corporate restriction, judgment, decree or order, (ii) is a party to
any labor dispute affecting any bargaining unit or other group of employees
generally, (iii) is subject to any material strike, slow down, workout or other
concerted interruptions of operations by employees of the Borrower or any
Subsidiary, whether or not relating to any labor contracts, (iv) is subject to
any significant pending or, to the knowledge of the Borrower, threatened, unfair
labor practice complaint, before the National Labor Relations Board, and (v) is
subject to any significant pending or, to the knowledge of the Borrower,
threatened, grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement, (vi) is subject to any significant
pending or, to the knowledge of the Borrower, threatened, significant strike,
labor dispute, slowdown or stoppage, or (vii) is, to the knowledge of the
Borrower, involved or subject to any union representation organizing or
certification matter with respect to the employees of the Borrower or any of its
Subsidiaries, EXCEPT (with respect to any matter specified in any of the above
clauses), for such matters as, individually or in the aggregate, would not
reasonably be likely to have a Material Adverse Effect.
7.18. EXISTING INDEBTEDNESS. Annex III sets forth a true and complete
list, as of the date or dates set forth therein, of all Indebtedness of the
Borrower and each of its Subsidiaries, on a consolidated basis, which (i) has an
outstanding principal amount of at least $1,000,000, or may be incurred pursuant
to existing commitments or lines of credit, or (ii) is secured by any Lien on
any property of the Borrower or any Subsidiary, and which will be outstanding on
the Closing Date after giving effect to the initial Borrowing hereunder, other
than the Indebtedness created under the Credit Documents (all such Indebtedness,
whether or not in a principal amount meeting such threshold and required to be
so listed on Annex III, herein the "EXISTING INDEBTEDNESS"). The Borrower has
provided to the Administrative Agent prior to the date of execution hereof true
and complete copies (or summary descriptions) of all agreements and instruments
governing the Indebtedness listed on Annex III (the "EXISTING INDEBTEDNESS
AGREEMENTS").
7.19. YEAR 2000 COMPUTER MATTERS. During 1999 and prior thereto, the
Borrower and its Subsidiaries reviewed the areas within their business and
operations which could have been adversely affected by the "Year 2000 Computer
Issue" (that is, the risk that computer applications used by the Borrower and
its Subsidiaries may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999). Based on such review, the activities completed by the Borrower and its
Subsidiaries as a consequence of such review and the Borrower's analysis and
planning relative thereto, and events subsequent to December 31, 1999 involving
the Borrower and its Subsidiaries, the Borrower reasonably believes that the
"Year 2000 Computer Issue" has not had, and is not reasonably likely to have, a
Material Adverse Effect.
7.20. SECURITY INTERESTS. Once executed and delivered, and until
terminated in accordance with the terms thereof, each of the Security Documents
creates, as security for the obligations purported to be secured thereby, a
valid and enforceable perfected security interest in and Lien on all of the
Collateral subject thereto from time to time, in favor
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of the Collateral Agent for the benefit of the Secured Creditors referred to in
the Security Documents, superior to and prior to the rights of all third persons
and subject to no other Liens (except that the Collateral under the Security
Agreement may be subject to Permitted Liens). No filings or recordings are
required in order to perfect the security interests created under any Security
Document except for filings or recordings required in connection with any such
Security Document which shall have been made, or for which satisfactory
arrangements have been made, upon or prior to the execution and delivery
thereof. All recording, stamp, intangible or other similar taxes required to be
paid by any person under applicable legal requirements or other laws applicable
to the property encumbered by the Security Documents in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement thereof have been paid.
7.21. TRUE AND COMPLETE DISCLOSURE. All factual information (taken as
a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrower or any of its Subsidiaries in writing to the Administrative Agent or
any Lender for purposes of or in connection with this Agreement or any
transaction contemplated herein, other than the Financial Projections (as to
which representations are made only as provided in section 7.8), is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of such person in writing to any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided, except that any such
future information consisting of financial projections prepared by management of
the Borrower is only represented herein as being based on good faith estimates
and assumptions believed by such persons to be reasonable at the time made, it
being recognized by the Lenders that such projections as to future events are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ materially from the projected
results. As of the Effective Date, there is no fact known to the Borrower or any
of its Subsidiaries which has, or would reasonably be likely to have, a Material
Adverse Effect which has not theretofore been disclosed in writing to the
Lenders.
SECTION 8. AFFIRMATIVE COVENANTS.
The Borrower hereby covenants and agrees that so long as this Agreement
is in effect and until such time as the Total Commitment has been terminated, no
Notes are outstanding and the Loans, together with interest, Fees and all other
Obligations hereunder, have been paid in full:
8.1. REPORTING REQUIREMENTS. The Borrower will furnish to each Lender
and the Administrative Agent:
(A) ANNUAL FINANCIAL STATEMENTS. As soon as available and in
any event within 90 days after the close of each fiscal year of the
Borrower, the consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the
related consolidated statements of income, of stockholder's equity and
of cash flows for such fiscal year, in each case setting forth
comparative figures for the preceding fiscal year, all in reasonable
detail and accompanied by the opinion with respect to such consolidated
financial statements of independent public accountants of recognized
national standing selected by the Borrower, which opinion shall be
unqualified and shall (i) state that such accountants audited such
consolidated financial statements in accordance with generally accepted
auditing standards, that such accountants believe that such audit
provides a reasonable basis for their opinion, and that in their
opinion such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Borrower
and its consolidated subsidiaries as at the end of such fiscal year and
the consolidated results of their operations and cash flows for such
fiscal year in conformity with generally accepted accounting
principles, or (ii) contain such statements as are customarily included
in unqualified reports of independent accountants in conformity with
the recommendations and requirements of the American Institute of
Certified Public Accountants (or any successor organization); PROVIDED
that such requirement for the furnishing of such annual financial
statements and accompanying opinion may be fulfilled by the furnishing
of the Borrower's Report on Form 10-K which includes such financial
statements and opinion, as filed with the SEC for the applicable fiscal
year.
(B) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
in any event within 45 days after the close of each of the first three
quarterly accounting periods in each fiscal year of the Borrower, the
unaudited condensed consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such quarterly period and
the related unaudited condensed consolidated statements of income and
of cash flows for
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such quarterly period or for the fiscal year to date, and setting
forth, in the case of such unaudited condensed consolidated statements
of income and of cash flows, comparative figures for the related
periods in the prior fiscal year, and which consolidated financial
statements shall be certified on behalf of the Borrower by the Chief
Financial Officer or other Authorized Officer of the Borrower, subject
to changes resulting from normal year-end audit adjustments; PROVIDED
that such requirement for the furnishing of quarterly financial
statements may be fulfilled by the furnishing of the Borrower's Report
on Form 10-Q which includes such financial statements, as filed with
the SEC for the applicable fiscal quarter.
(C) OFFICER'S COMPLIANCE CERTIFICATES. At the time of the
delivery of the financial statements provided for in sections 8.1(a)
and (b), a certificate, substantially in the form attached hereto as
Exhibit I, on behalf of the Borrower, of the Chief Financial Officer or
other Authorized Officer of the Borrower to the effect that, to the
best knowledge of the Borrower, no Default or Event of Default exists
or, if any Default or Event of Default does exist, specifying the
nature and extent thereof, which certificate shall set forth the
calculations required to establish compliance with the provisions of
sections 9.4(b) and (c), 9.7. 9.8, 9.9 and 9.10 of this Agreement and
identify in reasonable detail any financial adjustments included in
such calculations to take into account the acquisition or disposition
of any business which is required or permitted to be taken into account
hereunder in connection with such calculations.
(D) MONTHLY FINANCIAL STATEMENTS. As soon as available and
in any event within 30 days after the close of each of each calendar
month in each fiscal year of the Borrower, the unaudited condensed
consolidated statement of operations of the Borrower and its
consolidated Subsidiaries for such month and for the fiscal year to
date, and setting forth comparative figures for the related periods in
the prior fiscal year and a comparison to the current fiscal year
budgeted amounts, and which consolidated statement of operations shall
be certified on behalf of the Borrower by the Chief Financial Officer
or other Authorized Officer of the Borrower, subject to changes
resulting from normal year-end audit adjustments.
(E) BUDGETS AND FORECASTS. Not later than 30 days following
the approval of a consolidated budget for any fiscal year by the Board
of Directors of the Borrower, a consolidated budget in reasonable
detail for each of the four fiscal quarters of such fiscal year, and
(if and to the extent prepared by management of the Borrower) for any
subsequent fiscal years, as customarily prepared by management for its
internal use, setting forth, with appropriate discussion, the
forecasted balance sheet, income statement, operating cash flows and
capital expenditures of the Borrower and its Subsidiaries for the
period covered thereby, and the principal assumptions upon which
forecasts and budget are based.
(F) NOTICE OF DEFAULT, LITIGATION, LEGISLATION OR CERTAIN
MATTERS INVOLVING MAJOR CUSTOMERS OR SUPPLIERS. Promptly, and in any
event within three Business Days, in the case of clause (i) below, or
five Business Days, in the case of clause (ii) or (iii) below, after
the Borrower or any of its Subsidiaries obtains knowledge thereof,
notice of
(i) the occurrence of any event which constitutes a
Default or Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what
action the Borrower proposes to take with respect thereto,
(ii) any litigation or governmental or regulatory
proceeding pending against the Borrower or any of its
Subsidiaries, or the adoption of any legislation, regulations
or rules by any governmental body or agency thereof, in each
case which is likely to have a Material Adverse Effect or a
material adverse effect on the ability of the Borrower to
perform its obligations hereunder or under any other Credit
Document, and
(iii) any significant adverse change (in the
Borrower's reasonable judgment) in the Borrower's or any
Subsidiary's relationship with, or any significant event or
circumstance which is in the Borrower's reasonable judgment
likely to adversely affect the Borrower's or any Subsidiary's
relationship with, (A) any customer (or related group of
customers) representing more than 5% of the Borrower's
consolidated revenues during its most recent fiscal year, or
(B) any supplier which is significant to the Borrower and its
Subsidiaries considered as an entirety.
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(G) ERISA. Promptly, and in any event within 10 days after
the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
knows of the occurrence of any of the following, the Borrower will
deliver to each of the Lenders a certificate on behalf of the Borrower
of an Authorized Officer of the Borrower setting forth the full details
as to such occurrence and the action, if any, that the Borrower, such
Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed
with or by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC,
a Plan participant or the Plan administrator with respect thereto:
(i) that a Reportable Event has occurred with
respect to any Plan, which is reasonably likely (in the
Borrower's reasonable judgment) to result in a Material
Adverse Effect;
(ii) the institution of any steps by the Borrower,
any ERISA Affiliate, the PBGC or any other person to terminate
any Plan, which is reasonably likely (in the Borrower's
reasonable judgment) to result in a Material Adverse Effect;
(iii) the institution of any steps by the Borrower or
any ERISA Affiliate to withdraw from any Plan, which is
reasonably likely (in the Borrower's reasonable judgment) to
result in a Material Adverse Effect;
(iv) the institution of any steps by the Borrower or
any Subsidiary to withdraw from any Multiemployer Plan or
Multiple Employer Plan, if such withdrawal could result in
withdrawal liability (as described in Part 1 of Subtitle E of
Title IV of ERISA) in excess of $1,000,000;
(v) a non-exempt "prohibited transaction" within the
meaning of section 406 of ERISA in connection with any Plan,
which is reasonably likely (in the Borrower's reasonable
judgment) to result in a Material Adverse Effect;
(vi) that a Plan has an Unfunded Current Liability
exceeding $1,000,000;
(vii) any material increase in the contingent
liability of the Borrower or any Subsidiary with respect to
any post-retirement welfare liability; or
(viii) the taking of any action by, or the
threatening of the taking of any action by, the Internal
Revenue Service, the Department of Labor or the PBGC with
respect to any of the foregoing.
(H) ENVIRONMENTAL MATTERS. Promptly upon, and in any event
within 10 Business Days after, an officer of the Borrower obtains
actual knowledge thereof, notice of any of the following environmental
matters which is reasonably likely (in the Borrower's reasonable
judgment) to result in a Material Adverse Effect: (i) any pending or
threatened (in writing) Environmental Claim against the Borrower or any
of its Subsidiaries or any Real Property owned or operated by the
Borrower or any of its Subsidiaries; (ii) any condition or occurrence
on or arising from any Real Property owned or operated by the Borrower
or any of its Subsidiaries that (A) results in noncompliance by the
Borrower or any of its Subsidiaries with any applicable Environmental
Law or (B) would reasonably be expected to form the basis of an
Environmental Claim against the Borrower or any of its Subsidiaries or
any such Real Property; (iii) any condition or occurrence on any Real
Property owned, leased or operated by the Borrower or any of its
Subsidiaries that could reasonably be expected to cause such Real
Property to be subject to any restrictions on the ownership, occupancy,
use or transferability by the Borrower or any of its Subsidiaries of
such Real Property under any Environmental Law; and (iv) the taking of
any removal or remedial action in response to the actual or alleged
presence of any Hazardous Material on any Real Property owned, leased
or operated by the Borrower or any of its Subsidiaries as required by
any Environmental Law or any governmental or other administrative
agency. All such notices shall describe in reasonable detail the nature
of the Environmental Claim and the Borrower's or such Subsidiary's
response thereto.
(I) AUDITORS' INTERNAL CONTROL COMMENT LETTERS, ETC.
Promptly upon receipt thereof, a copy of each letter or memorandum
commenting on internal accounting controls and/or accounting or
financial reporting policies followed by the Borrower and/or any of its
Subsidiaries, which is submitted to the Borrower
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by its independent accountants in connection with any annual or interim
audit made by them of the books of the Borrower or any of its
Subsidiaries.
(J) SEC REPORTS AND REGISTRATION STATEMENTS. Promptly upon
transmission thereof or other filing with the SEC, copies of all
registration statements (other than the exhibits thereto and any
registration statement on Form S-8 or its equivalent) and annual,
quarterly or current reports that the Borrower or any of its
Subsidiaries files with the SEC.
(K) OTHER INFORMATION. With reasonable promptness, such
other information or documents (financial or otherwise) relating to the
Borrower or any of its Subsidiaries as any Lender may reasonably
request from time to time.
8.2. BOOKS, RECORDS AND INSPECTIONS. The Borrower will, and will
cause each of its Subsidiaries to, (i) keep proper books of record and account,
in which full and correct entries shall be made of all financial transactions
and the assets and business of the Borrower or such Subsidiaries, as the case
may be, in accordance with GAAP; and (ii) permit, upon at least five Business
Days' notice to the Chief Financial Officer or any other Authorized Officer of
the Borrower, officers and designated representatives of the Administrative
Agent to visit and inspect any of the properties or assets of the Borrower and
any of its Subsidiaries in whomsoever's possession (but only to the extent the
Borrower or such Subsidiary has the right to do so to the extent in the
possession of another person), to examine the books of account of the Borrower
and any of its Subsidiaries, and to make copies thereof and take extracts
therefrom, and to discuss the affairs, finances and accounts of the Borrower and
of any of its Subsidiaries with, and be advised as to the same by, its and their
officers and independent accountants and independent actuaries, if any, all at
such reasonable times and intervals and to such reasonable extent as the
Administrative Agent may request.
8.3. INSURANCE. (a) The Borrower will, and will cause each of its
Subsidiaries to, (i) maintain with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses, both
domestic and foreign, against such casualties and contingencies, of such types,
on such terms and in such amounts (including deductibles, co-insurance and
self-insurance, if adequate reserves are maintained with respect thereto as may
be required under GAAP) as is customary in the case of entities of established
reputations engaged in the same or a similar business in or from the same or
similar jurisdictions or locales and otherwise similarly situated; (ii) in any
event maintain at least such insurance coverage by such insurers and in such
forms and amounts and against such risks as are generally consistent with the
insurance coverage maintained by the Borrower and its Subsidiaries at the date
hereof; and (iii) forthwith upon the Administrative Agent's written request,
furnish to the Administrative Agent such information about such insurance as the
Administrative Agent may from time to time reasonably request, which information
shall be prepared in form and detail satisfactory to the Administrative Agent
and certified by an Authorized Officer of the Borrower.
(b) The Borrower will, and will cause each of its Subsidiaries which
is a Credit Party to, at all times keep their respective property which is
subject to the Lien of any Security Document insured in favor of the Collateral
Agent, and all policies or certificates (or certified copies thereof) with
respect to such insurance (and any other insurance maintained by the Borrower or
any such Subsidiary) (i) shall be endorsed to the Collateral Agent's
satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee (with respect to
Collateral) or, to the extent permitted by applicable law, as an additional
insured), (ii) shall state that such insurance policies shall not be canceled
without 30 days' prior written notice thereof (or 10 days' prior written notice
in the case of cancellation for the non-payment of premiums) by the respective
insurer to the Collateral Agent, (iii) shall provide that the respective
insurers irrevocably waive any and all rights of subrogation with respect to the
Collateral Agent and the Lenders, and (iv) shall in the case of any such
certificates or endorsements in favor of the Collateral Agent, be delivered to
or deposited with the Collateral Agent. In no event shall the Borrower be
required to deposit the actual insurance policies with the Collateral Agent. The
Administrative Agent shall deliver copies of any certificates of insurance to a
Lender upon such Lender's request.
(c) If the Borrower or any of its Subsidiaries shall fail to
maintain all insurance in accordance with this section 8.3, or if the Borrower
or any of its Subsidiaries shall fail to so endorse and deliver or deposit all
endorsements or certificates with respect thereto, the Administrative Agent
and/or the Collateral Agent shall have the right (but shall be under no
obligation), upon prior notice to the Borrower, to procure such insurance and
the Borrower agrees to
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reimburse the Administrative Agent or the Collateral Agent, as the case may be,
on demand, for all costs and expenses of procuring such insurance.
8.4. PAYMENT OF TAXES AND CLAIMS. The Borrower will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, prior to the date
on which penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien or charge upon any properties of the Borrower or any of its
Subsidiaries; PROVIDED that neither the Borrower nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim which
is being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP. Without limiting
the generality of the foregoing, the Borrower will, and will cause each of its
Subsidiaries to, pay in full all of its wage obligations to its employees in
accordance with the Fair Labor Standards Act (29 U.S.C. sections 206-207) and
any comparable provisions of applicable law.
8.5. CORPORATE FRANCHISES. The Borrower will do, and will cause each
of its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its corporate or other organizational
existence, rights, authority and franchises, PROVIDED that nothing in this
section 8.5 shall be deemed to prohibit (i) any transaction permitted by section
9.2; (ii) the termination of existence of any Subsidiary if (A) the Borrower
determines that such termination is in its best interest and (B) such
termination is not adverse in any material respect to the Lenders; or (iii) the
loss of any rights, authorities or franchises if the loss thereof, in the
aggregate, would not reasonably be likely to have a Material Adverse Effect.
8.6. GOOD REPAIR. The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements, thereto, to the extent and in the manner customary for
companies in similar businesses.
8.7. COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will cause
each of its Subsidiaries to, comply, in all material respects, with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, other than those (i)
being contested in good faith by appropriate proceedings, as to which adequate
reserves are established to the extent required under GAAP, and (ii) the
noncompliance with which would not have, and which would not be reasonably
likely to have, a Material Adverse Effect or a material adverse effect on the
ability of the Borrower to perform its obligations under any Credit Document.
8.8. COMPLIANCE WITH ENVIRONMENTAL LAWS. Without limitation of the
covenants contained in section 8.7 hereof:
(a) The Borrower will, and will cause each of its
Subsidiaries to, (i) comply, in all material respects, with all
Environmental Laws applicable to the ownership, lease or use of all
Real Property now or hereafter owned, leased or operated by the
Borrower or any of its Subsidiaries, and promptly pay or cause to be
paid all costs and expenses incurred in connection with such
compliance, except for such noncompliance as would not have, and which
would not be reasonably likely to have, a Material Adverse Effect or a
material adverse effect on the ability of the Borrower to perform its
obligations under any Credit Document; and (ii) keep or cause to be
kept all such Real Property free and clear of any Liens imposed
pursuant to such Environmental Laws which are not permitted under
section 9.3.
(b) Without limitation of the foregoing, if the Borrower or
any of its Subsidiaries shall generate, use, treat, store, release or
dispose of, or permit the generation, use, treatment, storage, release
or disposal of, Hazardous Materials on any Real Property now or
hereafter owned, leased or operated by the Borrower or any of its
Subsidiaries, or transport or permit the transportation of Hazardous
Materials to or from any such Real Property, any such action shall be
effected only in the ordinary course of business and in any event in
compliance, in all material respects, with all Environmental Laws
applicable thereto, except for such noncompliance as would not have,
and which would not be reasonably likely to have, a Material Adverse
Effect or a material adverse effect on the ability of the Borrower to
perform its obligations under any Credit Document.
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(c) If required to do so under any applicable order of any
governmental agency, the Borrower will undertake, and cause each of its
Subsidiaries to undertake, any clean up, removal, remedial or other
action necessary to remove and clean up any Hazardous Materials from
any Real Property owned, leased or operated by the Borrower or any of
its Subsidiaries in accordance with, in all material respects, the
requirements of all applicable Environmental Laws and in accordance
with, in all material respects, such orders of all governmental
authorities, except (i) to the extent that the Borrower or such
Subsidiary is contesting such order in good faith and by appropriate
proceedings and for which adequate reserves have been established to
the extent required by GAAP, or (ii) for such noncompliance as would
not have, and which would not be reasonably likely to have, a Material
Adverse Effect or a material adverse effect on the ability of the
Borrower to perform its obligations under any Credit Document.
(d) At the written request of the Administrative Agent or
the Required Lenders, which request shall specify in reasonable detail
the basis therefor, at any time and from time to time after the Lenders
receive notice under section 8.1(h) for any Environmental Claim
involving potential expenditures by the Borrower or any of its
Subsidiaries in excess of $1,000,000 in the aggregate for any Real
Property, the Borrower will provide, at its sole cost and expense, an
environmental site assessment report concerning any such Real Property
now or hereafter owned, leased or operated by the Borrower or any of
its Subsidiaries, prepared by an environmental consulting firm
reasonably acceptable to the Administrative Agent, indicating the
presence or absence of Hazardous Materials and the potential cost of
any removal or a remedial action in connection with any Hazardous
Materials on such Real Property. If the Borrower fails to provide the
same within 90 days after such request was made, the Administrative
Agent may order the same, and the Borrower shall grant and hereby
grants, to the Administrative Agent and the Lenders and their agents,
access to such Real Property and specifically grants the Administrative
Agent and the Lenders an irrevocable non-exclusive license, subject to
the rights of tenants, to undertake such an assessment, all at the
Borrower's expense.
8.9. FISCAL YEARS, FISCAL QUARTERS. The Borrower will, for
consolidated financial reporting purposes, continue to use December 31 as the
end of its fiscal year and March 31, June 30, September 30 and December 31 as
the end of its fiscal quarters. If the Borrower shall change any of its
Subsidiaries' fiscal years or fiscal quarters (other than the fiscal year or
fiscal quarters of a person which becomes a Subsidiary, made at the time such
person becomes a Subsidiary, to conform to the Borrower's fiscal year and fiscal
quarters or to conform to the fiscal year or fiscal quarters which the Borrower
generally utilizes for its Subsidiaries), the Borrower will promptly, and in any
event within 30 days following any such change, deliver a notice to the
Administrative Agent and the Lenders describing such change and any material
accounting entries made in connection therewith and stating whether such change
will have any impact upon any financial computations to be made hereunder, and
if any such impact is foreseen, describing in reasonable detail the nature and
extent of such impact. If the Required Lenders determine that any such change
will have any impact upon any financial computations to be made hereunder which
is adverse to the Lenders, the Borrower will, if so requested by the
Administrative Agent, enter into an amendment to this Agreement, in form and
substance satisfactory to the Administrative Agent and the Required Lenders,
modifying any of the financial covenants or related provisions hereof in such
manner as the Required Lenders determine is necessary to eliminate such adverse
effect.
8.10. HEDGE AGREEMENTS, ETC. In the event the Borrower or any of its
Subsidiaries determines to enter into a Hedge Agreement it may do so, PROVIDED
that (i) the purpose of such Hedge Agreement is to provide protection to the
Borrower or any such Subsidiary from fluctuations and other changes in interest
rates, currency exchange rates and/or commodity prices, as and to the extent
considered reasonably necessary by the Borrower, but without exposing the
Borrower or its Subsidiaries to predominantly speculative risks unrelated to the
amount of assets, Indebtedness or other liabilities intended to be subject to
coverage on a notional basis under all such Hedge Agreements; and (ii) in the
case of any Hedge Agreement entered into after the Effective Date, only if the
proposed form thereof (including any proposed pricing or other material terms)
has been provided to the Administrative Agent contemporaneously with the entry
into such Hedge Agreement.
8.11. CERTAIN SUBSIDIARIES TO JOIN IN SUBSIDIARY GUARANTY. (a) In the
event that at any time after the Closing Date
(x) the Borrower has any Subsidiary (other than a Foreign
Subsidiary as to which section 8.11(b) applies) which is not a party to
the Subsidiary Guaranty, or
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(y) an Event of Default shall have occurred and be
continuing and the Borrower has any Subsidiary which is not a party to
the Subsidiary Guaranty,
THEN the Borrower will promptly, and in any event within five Business Days
following the occurrence of such event, notify the Administrative Agent in
writing of such event, identifying the Subsidiary in question and referring
specifically to the rights of the Administrative Agent and the Lenders under
this section. The Borrower will, within 30 days following request therefor from
the Administrative Agent (who may give such request on its own initiative or
upon request by the Required Lenders), cause such Subsidiary to deliver to the
Administrative Agent, in sufficient quantities for the Lenders, (i) a joinder
supplement, satisfactory in form and substance to the Administrative Agent and
the Required Lenders, duly executed by such Subsidiary, pursuant to which such
Subsidiary joins in the Subsidiary Guaranty as a guarantor thereunder, and (ii)
if such Subsidiary is a corporation, resolutions of the Board of Directors of
such Subsidiary, certified by the Secretary or an Assistant Secretary of such
Subsidiary as duly adopted and in full force and effect, authorizing the
execution and delivery of such joinder supplement, or if such Subsidiary is not
a corporation, such other evidence of the authority of such Subsidiary to
execute such joinder supplement as the Administrative Agent may reasonably
request.
(b) Notwithstanding the foregoing provisions of this section 8.11 or
the provisions of section 8.12 hereof, the Borrower shall not, unless an Event
of Default shall have occurred and be continuing, be required to pledge (or
cause to be pledged) more than 65% of the stock or other equity interests in any
first tier Foreign Subsidiary, or any of the stock or other equity interests in
any other Foreign Subsidiary, or to cause a Foreign Subsidiary to join in the
Subsidiary Guaranty or to become a party to the Security Agreement or any other
Security Document, if (i) to do so would subject the Borrower to liability for
additional United States income taxes by virtue of section 956 of the Code in an
amount the Borrower considers material, and (ii) the Borrower provides the
Administrative Agent with documentation, including computations prepared by the
Borrower's internal tax officer, its independent accountants or tax counsel,
reasonably acceptable to the Required Lenders, in support thereof.
8.12. ADDITIONAL SECURITY; FURTHER ASSURANCES. (a) In the event that
at any time after the Closing Date the Borrower or any of its Subsidiaries owns
or holds an interest in any Real Property, assets, stock, securities or any
other property or interest, located within or outside of the United States or
arising out of business conducted from any location within or outside the United
States, which is not at the time included in the Collateral and is not subject
to a Permitted Lien securing Indebtedness (all of the foregoing,
"UNCOLLATERALIZED PROPERTY"), then the Borrower will promptly, and in any event
within five Business Days following the occurrence of such event, notify the
Administrative Agent in writing of such event, identifying the Uncollateralized
Property in question and referring specifically to the rights of the
Administrative Agent and the Lenders under this section 8.12; PROVIDED that
notwithstanding the foregoing, the Borrower need not notify the Administrative
Agent under this section 8.12(a) of any leasehold interest which is acquired or
held by the Borrower or any Subsidiary unless the same involves a nominal or
bargain purchase price option.
(b) (i) The Borrower will, or will cause an applicable Subsidiary
to, within 30 days following request by the Collateral Agent (who may make such
request on its own initiative or upon instructions from the Required Lenders),
grant the Collateral Agent for the benefit of the Secured Creditors (as defined
in the Security Documents) security interests and mortgages or deeds of trust,
pursuant to new documentation (each an "ADDITIONAL SECURITY DOCUMENT") or
joinder in any existing Security Document to which it is not already a party, in
all of the Uncollateralized Property as to which the Administrative Agent has
notified the Borrower that the same is required to be included in the
Collateral, SUBJECT to obtaining any required consents from third parties
(including third party lessors and co-venturers) necessary to be obtained for
the granting of a Lien on any particular Uncollateralized Property (with the
Borrower hereby agreeing to use, and to cause its Subsidiaries to use,
reasonable best efforts to obtain such consents), and ALSO SUBJECT to the
provisions of section 8.11(b).
(ii) In the event that at any time after the date hereof the Borrower
retires in full its Indebtedness (other than the Obligations) secured by the
Tyler Boulevard Facility without contemporaneously refinancing such Indebtedness
as provided in section 9.4(b)(5), THEN the Borrower will grant a first mortgage
on the Tyler Boulevard Facility to the Collateral Agent pursuant to an
Additional Security Document, with such first mortgage being executed and
delivered to the Collateral Agent within 30 days following the retirement of
such Indebtedness.
(c) Each Additional Security Document (i) shall consist of
documentation reasonably satisfactory in form and substance to the
Administrative Agent, which documentation shall in the case of Real Property
owned in fee be accompanied by such Phase I environmental reports or
assessments, a mortgage policy of title insurance (subject to a
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standard survey exception), and other supporting documentation requested by and
reasonably satisfactory in form and substance to the Administrative Agent; and
(ii) shall constitute a valid and enforceable perfected Lien upon the interests
or properties so included in the Collateral, superior to and prior to the rights
of all third persons and subject to no other Liens except those permitted by
section 9.3 or otherwise agreed by the Administrative Agent at the time of
perfection thereof and (in the case of Real Property or interests therein) such
other encumbrances as may be set forth in the mortgage policy, if any, relating
to such Additional Security Document which shall be delivered to the Collateral
Agent together with such Additional Security Document and which shall be
satisfactory in form and substance to the Collateral Agent and the
Administrative Agent. Notwithstanding the foregoing, no leasehold Mortgage or
any related title insurance or surveys, shall be required for any leasehold
properties (unless the lessee has a nominal or bargain purchase option).
(d) The Borrower, at its sole cost and expense, will cause each
Additional Security Document or instruments related thereto to be duly recorded
or filed in such manner and in such places as are required by law to establish,
perfect, preserve and protect the Liens created thereby required to be granted
pursuant to the Additional Security Document, and will pay or cause to be paid
in full all taxes, fees and other charges payable in connection therewith.
Furthermore, the Borrower shall cause to be delivered to the Collateral Agent
such opinions of local counsel, appraisals, title insurance, environmental
assessments, consents of landlords, lien waivers from landlords or mortgagees
and other related documents as may be reasonably requested by the Collateral
Agent in connection with the execution, delivery and recording of any Additional
Security Document, all of which documents shall be in form and substance
reasonably satisfactory to the Collateral Agent and the Administrative Agent.
(e) The Borrower will, and will cause each of its Subsidiaries to,
at the expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, and other
assurances or instruments and take such further steps relating to the Collateral
covered by any of the Security Documents as the Collateral Agent may reasonably
require. If at any time the Collateral Agent determines, based on applicable
law, that all applicable taxes (including, without limitation, mortgage
recording taxes or similar charges) were not paid in connection with the
recordation of any mortgage or deed of trust, the Borrower shall promptly pay
the same upon demand.
(f) The Borrower will if requested by any Lender at any time, in
order to meet any legal requirement applicable to such Lender, provide to the
Collateral Agent and the Lenders, at the sole cost and expense of the Borrower,
appraisals and other supporting documentation relating to any Closing Date
Mortgage or any mortgage or deed of trust delivered as an Additional Security
Document hereunder, as specified by any Lender, meeting the appraisal and other
documentation requirements of the Real Estate Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989, as amended, or any
other legal requirements applicable to any Lender, which in the case of any such
appraisal shall be prepared by one or more valuation firms of national standing,
acceptable to the Required Lenders, utilizing appraisal standards satisfying
such Amendments, Act or other legal requirements.
(g) Notwithstanding the foregoing provisions of this section 8.12,
in the event the Administrative Agent notifies the Borrower that the Required
Lenders have determined on the basis of an environmental report or assessment
delivered by the Borrower pursuant to the provisions of section 8.12(c) that an
Additional Security Document encumbering any particular Real Property should not
be delivered under this section 8.12, the Borrower shall be relieved of its
obligation in this section 8.12 to deliver or cause to be delivered an
Additional Security Document in the form of a mortgage, deed of trust or similar
instrument covering such Real Property, SUBJECT to any later determination by
the Required Lenders notified to the Borrower by the Administrative Agent that
an Additional Security Document in the form of a mortgage, deed of trust or
similar instrument covering such Real Property should be executed and delivered
hereunder.
(h) As promptly as practicable after the date (i) any Credit Party
has any Collateral located in a jurisdiction as to which the Administrative
Agent shall not previously have received a lien search report listing all
effective UCC financing statements and other Liens filed against such Credit
Party in such jurisdiction and containing copies of all such effective UCC
financing statements and other Lien documents, (ii) any person first becomes a
Credit Party, or (iii) any UCC financing statement or Security Document is filed
against any Credit Party to perfect security interests granted pursuant to the
Security Agreement or any other Security Document, the Borrower will, at its
expense, cause to be delivered to the Administrative Agent and the Lenders
search reports listing all effective UCC financing statements and other Lien
documents filed against such person or Credit Party in each applicable
jurisdiction and containing copies of all such effective UCC financing
statements and other Lien documents. In addition, whenever requested by the
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Administrative Agent, but not more frequently than once in any 12-month period,
the Borrower will promptly provide the Administrative Agent and the Lenders with
such new or updated title, lien, judgment, patent, trademark and UCC financing
statement searches or reports as to the Borrower or any of its Subsidiaries, or
any Collateral of any Credit Party, as the Administrative Agent may specify to
the Borrower in its request.
(i) The Collateral Agent is authorized, without the consent of any
of the Lenders, to (i) enter into any modification of any Security Document
which the Collateral Agent reasonably believes is required to conform to the
mandatory requirements of local law, or to local customs followed by financial
institutions with respect to similar collateral documents involving property
located in any particular jurisdiction, (ii) in the case of any Security
Document relating to property located in a particular jurisdiction which imposes
a tax with respect to such Security Document based on the amount of the
obligations secured thereby, expressly limit the amount of such secured
obligations which are secured by such property to such amount as, in the
Collateral Agent's good faith judgment, is appropriate so that the amount of
such tax is reasonable in light of the estimated value of the property located
in such jurisdiction, and/or (iii) designate the amount of title insurance
coverage for any title insurance policy provided hereunder in an amount
reasonably believed by the Collateral Agent to be representative of the fair
value of the property covered thereby.
(j) The Borrower will provide the Administrative Agent with
sufficient copies of each Additional Security Document and any additional
supporting documents delivered in connection therewith for distribution of
copies thereof to the Lenders, and the Administrative Agent will promptly so
distribute such copies.
8.13. CASUALTY AND CONDEMNATION. (a) The Borrower will promptly (and
in any event within 10 days) furnish to the Administrative Agent and the Lenders
written notice of any Event of Loss involving any property included in the
Collateral which is reasonably believed to be in excess of $500,000.
(b) If any Event of Loss results in Net Proceeds (whether in the
form of insurance proceeds, a condemnation award or otherwise), a portion or all
of which is required to be applied as a prepayment of the Loans or to the
rebuilding or restoration of any affected property pursuant to section 5.2, the
Collateral Agent is authorized to collect such Net Proceeds and, if received by
any Credit Party, the Borrower will, or will cause any applicable Credit Party,
to pay over such Net Proceeds to the Collateral Agent.
8.14. LANDLORD/MORTGAGEE WAIVERS; BAILEE LETTERS. If requested to do
so by the Administrative Agent, acting on instructions from the Required
Lenders, the Borrower will promptly (and in any event within 60 days following
any such request) obtain, and thereafter the Borrower will maintain in effect,
(a) lien waivers from landlords and mortgagees having any interest in any Real
Property on which any tangible items of Collateral, having a minimum value as
specified by the Administrative Agent in such request, are located,
substantially in the form provided by, or otherwise reasonably acceptable to,
the Administrative Agent, and (b) bailee letters, substantially in the form
provided by, or otherwise reasonably acceptable to, the Administrative Agent,
from persons unrelated to any of the Credit Parties who are parties to the
Security Agreement to whom any tangible items of Collateral having a minimum
value as specified by the Administrative Agent in such request, have been
delivered for storage, use in the manufacture of products for the Borrower and
its Subsidiaries (such as "tooling"), consignment or similar purposes.
8.15. SENIOR DEBT. The Borrower will at all times ensure that (i) the
claims of the Lenders in respect of the Obligations of the Borrower will,
insofar as they are secured by the Collateral, rank prior to the claims of any
unsecured general creditor of the Borrower in any such Collateral, and (ii) any
Indebtedness of the Borrower which is subordinated in any manner to the claims
of any other creditor of the Borrower will be subordinated in like manner to
such claims of the Lenders.
SECTION 9. NEGATIVE COVENANTS.
The Borrower hereby covenants and agrees that on the Effective Date and
thereafter for so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder are
paid in full:
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9.1. CHANGES IN BUSINESS. Neither the Borrower nor any of its
Subsidiaries will engage in any business which is not the same as or
complementary to the business engaged in by the Borrower on the Effective Date,
or make any changes in any such business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Borrower and its Subsidiaries, would be substantially changed from the
general nature of the business engaged in by the Borrower and its Subsidiaries,
taken as a whole, on the date hereof.
9.2. CONSOLIDATION, MERGER, ACQUISITIONS, SALE OF ASSETS, ETC. The
Borrower will not, and will not permit any Subsidiary to, (1) wind up, liquidate
or dissolve its affairs, or (2) enter into any transaction of merger or
consolidation, or (3) make or otherwise effect any Acquisition, or (4) make or
otherwise effect any Asset Sale, or (5) agree to do any of the foregoing at any
future time, EXCEPT that the following shall be permitted:
(A) PERMITTED INVESTMENTS: the investments permitted
pursuant to section 9.5;
(B) CERTAIN INTERCOMPANY MERGERS, ETC.: if no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, (i) the merger, consolidation or amalgamation of any
Wholly-Owned Subsidiary with or into the Borrower or another
Wholly-Owned Subsidiary, so long as in any merger, consolidation or
amalgamation involving the Borrower, the Borrower is the surviving or
continuing or resulting corporation, (ii) the liquidation or
dissolution of any Subsidiary, or (iii) the transfer or other
disposition of any property by the Borrower to any Wholly-Owned
Subsidiary or by any Wholly- Owned Subsidiary to the Borrower or any
other Wholly-Owned Subsidiary of the Borrower;
(C) PERMITTED ACQUISITIONS: if no Default or Event of
Default shall have occurred and be continuing or would result
therefrom, the Borrower or any Subsidiary may make an Acquisition only
if such Acquisition (including the terms under which such Acquisition
would be completed) has been consented to or approved in writing by the
Required Lenders, acting in their sole discretion; PROVIDED that no
such Acquisition shall be effected without the prior written consent or
approval of all of the Lenders, acting in their sole discretion, if
such Acquisition is actively opposed by the Board of Directors (or
similar governing body) of the selling person or the person whose
equity interests are to be acquired;
(D) PERMITTED DISPOSITIONS: if no Default or Event of
Default shall have occurred and be continuing or would result
therefrom, the Borrower or any of its Subsidiaries may (i) sell any
property, land or building (including any related receivables or other
intangible assets) to any person which is not a Subsidiary of the
Borrower, or (ii) sell the entire capital stock (or other equity
interests) and Indebtedness of any Subsidiary owned by the Borrower or
any other Subsidiary to any person which is not a Subsidiary of the
Borrower, or (iii) permit any Subsidiary to be merged or consolidated
with a person which is not an Affiliate of the Borrower, or (iv)
consummate any other Asset Sale with a person who is not a Subsidiary
of the Borrower; PROVIDED that (A) the consideration for such
transaction represents fair value (as determined by management of the
Borrower), (B) if the aggregate consideration for such transaction
exceeds $3,000,000, at least 75% of such consideration consists of
cash, (C) in the case of any such transaction involving consideration
in excess of $3,000,000, at least five Business Days prior to the date
of completion of such transaction the Borrower shall have delivered to
the Administrative Agent an officer's certificate executed on behalf of
the Borrower by an Authorized Officer of the Borrower, which
certificate shall contain a description of the proposed transaction,
the date such transaction is scheduled to be consummated, and the
estimated purchase price or other consideration for such transaction,
and which shall (if requested by the Administrative Agent) include a
certified copy of the draft or definitive documentation pertaining
thereto, and (D) promptly following the consummation of such
transaction, the Borrower prepays Loans with the Net Proceeds of the
transaction, as and to the extent contemplated by section 5.2(b);
(E) CAPITAL EXPENDITURES: Consolidated Capital Expenditures
not otherwise in violation of this Agreement; and
(F) LEASES: the Borrower or any of its Subsidiaries may
enter into leases of property or assets not constituting Permitted
Acquisitions in the ordinary course of business not otherwise in
violation of this Agreement.
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To the extent the Required Lenders (or all of the Lenders as shall be required
by section 12.12) waive the provisions of this section 9.2 with respect to the
sale, transfer or other disposition of any Collateral, or all of the stock or
other interests in a Subsidiary, or any Collateral or the stock or other equity
interests in a Subsidiary is sold, transferred or disposed of as permitted by
this section 9.2, (i) such Collateral shall be sold, transferred or disposed of
free and clear of the Liens created by the respective Security Documents; (ii)
if all of the capital stock or other equity interests in a Subsidiary which is a
party to the Subsidiary Guaranty and/or any Security Document is so sold,
transferred or disposed of, such Subsidiary shall be released from the
Subsidiary Guaranty and/or such Security Documents; and (iii) the Administrative
Agent and the Collateral Agent are hereby authorized to take actions deemed
appropriate by them in order to effectuate the foregoing.
9.3. LIENS. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any such Subsidiary whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with or without
recourse to the Borrower or any of its Subsidiaries, other than for purposes of
collection of delinquent accounts in the ordinary course of business) or assign
any right to receive income, or file or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute, EXCEPT that the foregoing restrictions shall not
apply to:
(a) the Standard Permitted Liens;
(b) Liens which
(i) are placed upon equipment, machinery, Real
Property, or the improvements to Real Property, used in the
ordinary course of business of the Borrower or any Subsidiary at
the time of (or within 180 days after) the acquisition thereof,
or completion of the improvements thereto, by the Borrower or
any such Subsidiary, to secure Indebtedness incurred to pay or
finance all or a portion of the purchase price or cost thereof,
PROVIDED that the Lien encumbering the equipment, machinery,
Real Property, or improvements to Real Property, so acquired or
constructed does not encumber any other asset of the Borrower or
any such Subsidiary; or
(ii) are existing on property or other assets at the
time acquired by the Borrower or any Subsidiary or on assets of
a person at the time such person first becomes a Subsidiary of
the Borrower; PROVIDED that (A) any such Liens were not created
at the time of or in contemplation of the acquisition of such
assets or person by the Borrower or any of its Subsidiaries; (B)
in the case of any such acquisition of a person, any such Lien
attaches only to the property and assets of such person; and (C)
in the case of any such acquisition of property or assets by the
Borrower or any Subsidiary, any such Lien attaches only to the
property and assets so acquired and not to any other property or
assets of the Borrower or any Subsidiary;
PROVIDED that (1) the Indebtedness secured by any such Lien does not
exceed 100% of the fair market value of the property and assets to which
such Lien attaches, determined at the time of the acquisition or
completion of construction of such property or asset or the time at
which such person becomes a Subsidiary of the Borrower (except in the
circumstances described in clause (ii) above to the extent such Liens
constituted customary purchase money Liens at the time of incurrence and
were entered into in the ordinary course of business), and (2) the
Indebtedness secured thereby is permitted by section 9.4(b);
(c) the Permitted Receivables Program referred to in section
9.4(c) hereof, including without limitation any UCC financing
statements filed to evidence transfers of receivables (and any related
guaranties, security or other credit support) pursuant to such
Permitted Receivables Program.
9.4. INDEBTEDNESS. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness of the Borrower or any of its Subsidiaries, EXCEPT:
(a) Indebtedness incurred under this Agreement and the other
Credit Documents;
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(b) Not more than $15,000,000 aggregate principal amount of
Indebtedness of the Borrower and its Subsidiaries in respect of
(1) Capital Leases;
(2) Synthetic Leases;
(3) Indebtedness subject to Liens permitted by
section 9.3(b);
(4) Existing Indebtedness not related to the Tyler
Boulevard Facility; and any refinancing, extension,
renewal or refunding of any such Existing Indebtedness
not involving an increase in the principal amount
thereof or a reduction of more than 10% in the
remaining weighted average life to maturity thereof
(computed in accordance with standard financial
practice); and
(5) Existing Indebtedness related to the Tyler
Boulevard Facility; and any refinancing, extension,
renewal or refunding of any such Existing
Indebtedness, PROVIDED that (x) the aggregate
principal amount of Indebtedness secured by the Tyler
Boulevard Facility does not exceed $7,000,000, and
(y) the Borrower shall not theretofore have become
obligated to grant the Collateral Agent a first
mortgage on the Tyler Boulevard Facility pursuant to
the provisions of section 8.12(b)(ii);
including in any such case any guaranty by the Borrower of any such
Capitalized Lease, Synthetic Lease or other Indebtedness; PROVIDED that
at the time of any incurrence thereof after the date hereof, and after
giving effect thereto, no Event of Default shall have occurred and be
continuing or would result therefrom;
(c) Indebtedness consisting of limited recourse obligations
of the Borrower and/or the Receivables Subsidiary under a program for
the sale of receivables which meets the following requirements (i) such
program, including all related arrangements and agreements, is the same
as, or substantially similar to, the receivables program, arrangements
and agreements in effect as of the Effective Date, (ii) there is no
material increase in the nature or character of the selling or
servicing company's limited recourse obligations in respect of sold
receivables, and (iii) there is no expansion in the group of five
retailer customers of the Borrower whose accounts with the Borrower and
its Subsidiaries may be sold under such program (any such receivables
program meeting the foregoing requirements, the "PERMITTED RECEIVABLES
PROGRAM");
(d) Indebtedness of the Borrower or any Subsidiary under
Hedge Agreements;
(e) Indebtedness of the Borrower to any of its Subsidiaries,
and Indebtedness of any of the Borrower's Subsidiaries to the Borrower
or to another Subsidiary of the Borrower, in each case to the extent
permitted under section 9.5;
(f) Guaranty Obligations permitted under section 9.5; and
(g) additional unsecured Indebtedness and Guaranty
Obligations of the Borrower, not otherwise permitted pursuant to the
foregoing clauses, up to $250,000 aggregate amount outstanding at any
time, PROVIDED that at the time of incurrence thereof and after giving
effect thereto, (i) no Event of Default shall have occurred and be
continuing or shall result therefrom, and (ii) the Borrower would have
been in compliance with the covenants contained in sections 9.7 and 9.8
hereof if such Indebtedness had been incurred at the beginning of the
most recent Testing Period for which financial information has been
furnished to the Lenders hereunder, and such Indebtedness remained
outstanding throughout such Testing Period.
9.5. ADVANCES, INVESTMENTS, LOANS AND GUARANTY OBLIGATIONS. The
Borrower will not, and will not permit any of its Subsidiaries to, (1) lend
money or credit or make advances to any person, (2) purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, or other investment in, any person, (3) create, acquire
or hold any Subsidiary, (4) be or become a party to any joint venture or
partnership, or
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(5) be or become obligated under any Guaranty Obligations (other than those
created in favor of the Lenders pursuant to the Credit Documents), EXCEPT:
(a) the Borrower or any of its Subsidiaries may invest in
cash and Cash Equivalents;
(b) any endorsement of a check or other medium of payment
for deposit or collection, or any similar transaction in the normal
course of business;
(c) the Borrower and its Subsidiaries may acquire and hold
receivables owing to them in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(d) investments acquired by the Borrower or any of its
Subsidiaries (i) in exchange for any other investment held by the
Borrower or any such Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer
of such other investment, or (ii) as a result of a foreclosure by the
Borrower or any of its Subsidiaries with respect to any secured
investment or other transfer of title with respect to any secured
investment in default;
(e) loans and advances to employees for business-related
travel expenses, moving expenses, costs of replacement homes and other
similar expenses, in each case incurred in the ordinary course of
business, shall be permitted;
(f) to the extent not permitted by the foregoing clauses,
the existing loans, advances, investments and guarantees described on
Annex V hereto;
(g) any unsecured guaranty by the Borrower of any
Indebtedness of a Subsidiary permitted by section 9.4, and any guaranty
by any Subsidiary described in section 9.4;
(h) investments of the Borrower and its Subsidiaries in
Hedge Agreements;
(i) loans and advances by any Subsidiary of the Borrower to
the Borrower, PROVIDED that the Indebtedness represented thereby
constitutes Subordinated Indebtedness;
(j) loans and advances by the Borrower or by any Subsidiary
of the Borrower to, or other investments in, any Domestic Subsidiary of
the Borrower;
(k) loans and advances by the Borrower or by any Subsidiary
of the Borrower to, or other investments in, any Foreign Subsidiary of
the Borrower, PROVIDED that the aggregate amount of all additional or
incremental loans, advances and investments made after December 31,
1999 in all Foreign Subsidiaries of the Borrower does not exceed
$2,000,000;
(l) Guaranty Obligations, not otherwise permitted by the
foregoing clauses, of (i) the Borrower or any Subsidiary in respect of
leases of the Borrower or any Subsidiary the entry into which is not
prohibited by this Agreement, (ii) the Borrower or any Subsidiary in
respect of any other person (other than in respect of (x) Indebtedness
for borrowed money or represented by bonds, notes, debentures or
similar securities, or (y) Indebtedness constituting a Capital Lease or
a Synthetic Lease) arising as a matter of applicable law because the
Borrower or such Subsidiary is or is deemed to be a general partner of
such other person, or (iii) the Borrower or any Subsidiary in respect
of any other person (other than in respect of (x) Indebtedness for
borrowed money or represented by bonds, notes, debentures or similar
securities, or (y) Indebtedness constituting a Capital Lease or a
Synthetic Lease) arising in the ordinary course of business;
(m) Acquisitions permitted under section 9.2, and loans,
advances and investments of any person which are outstanding at the
time such person becomes a Subsidiary of the Borrower as a result of an
Acquisition permitted by section 9.2, but not any increase in the
amount thereof; and
(n) any other loans, advances, investments (whether in the
form of cash or contribution of property, and if in the form of a
contribution of property, such property shall be valued for purposes of
this
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clause at the fair value thereof as reasonably determined by the
Borrower) and Guaranty Obligations, in or to or for the benefit of, any
corporation, partnership, limited liability company, joint venture or
other business entity, which is not itself a Subsidiary of the Borrower
or owned or controlled by any director, officer or employee of the
Borrower or any of its Subsidiaries, not otherwise permitted by the
foregoing clauses, made after December 31, 1999 (such loans, advances
and investments and Guaranty Obligations, collectively, "BASKET
INVESTMENTS AND GUARANTEES"), shall be permitted to be incurred if (i)
no Event of Default shall have occurred and be continuing, or would
result therefrom, and (ii) the aggregate cumulative amount of such
Basket Investments and Guarantees (taking into account any repayments
of loans or advances), does not exceed $3,000,000.
9.6. DIVIDENDS, ETC. The Borrower will not (a) directly or indirectly
declare, order, pay or make any dividend (other than dividends payable solely in
capital stock of the Borrower) or other distribution on or in respect of any
capital stock of any class of the Borrower, whether by reduction of capital or
otherwise, or (b) directly or indirectly make, or permit any of its Subsidiaries
to directly or indirectly make, any purchase, redemption, retirement or other
acquisition of any capital stock of any class of the Borrower (other than for a
consideration consisting solely of capital stock of the same class of the
Borrower) or of any warrants, rights or options to acquire or any securities
convertible into or exchangeable for any capital stock of the Borrower, EXCEPT
that if no Event of Default shall have occurred and be continuing or would
result therefrom, the Borrower shall be permitted to repurchase shares of its
common stock in open market or privately negotiated transactions, or pursuant to
one or more public tender offers, if the cumulative aggregate Restricted Stock
Payments expended for such purposes after December 31, 1999 does not exceed
$40,000,000.
9.7. CONSOLIDATED TOTAL ADJUSTED DEBT/CONSOLIDATED EBITDA RATIO. The
Borrower will not at any time permit the ratio of (x) the amount of Consolidated
Total Adjusted Debt at such time to (y) Consolidated EBITDA for its then most
recent Testing Period, to exceed (i) 3.00 to 1.00, in the case of any Testing
Period ended on or prior to December 31, 2000, (ii) 2.75 to 1.00, in the case of
any subsequent Testing Period ending on or prior to December 31, 2001, or (iii)
2.50 to 1.00, in the case of any subsequent Testing Period.
9.8. FIXED CHARGE COVERAGE RATIO. The Borrower will not permit its
Fixed Charge Coverage Ratio for any Testing Period to be less than (i) 1.15 to
1.00 in the case of any Testing Period ended on or prior to December 31, 2000,
or (ii) 1.20 to 1.00 in the case of any subsequent Testing Period. In computing
its Fixed Charge Coverage Ratio for any Testing Period ended on or prior to
December 31, 2000, notwithstanding anything to the contrary contained in this
Agreement, the scheduled principal payments of the mortgage debt existing at the
Effective Date on the Borrower's Tyler Boulevard Facility, which mortgage debt
is scheduled to mature in November 2000, shall not be taken into account, but if
such mortgage debt is refinanced after the Effective Date, then such refinanced
mortgage debt shall be taken into account.
9.9. MINIMUM CONSOLIDATED NET WORTH. The Borrower will not permit its
Consolidated Net Worth at any time to be less than $40,200,000, EXCEPT that:
(a) effective as of the end of the Borrower's fiscal quarter
ended on or nearest to March 31, 2000, and as of the end of each fiscal
quarter thereafter, the foregoing amount (as it may from time to time
be adjusted as herein provided), shall be increased by 75% of the
Consolidated Net Income of the Borrower for the fiscal quarter ended on
such date, if any (there being no reduction in the case of any such
Consolidated Net Income which reflects a deficit);
(b) the foregoing amount (as it may from time to time be
adjusted as herein provided), shall be increased by an amount equal to
100% of the cash proceeds (net of underwriting discounts and
commissions and other customary fees and costs associated therewith)
from any sale or issuance of equity by the Borrower after December 31,
1999 (other than Redeemable Stock and any sale or issuance to
management or employees or employee benefit plans pursuant to employee
benefit plans of general application);
(c) the foregoing amount (as it may from time to time be
adjusted as herein provided), shall be increased by an amount equal to
100% of (x) the principal amount of Indebtedness or (y) the higher of
stated value or liquidation value of Redeemable Stock, as the case may
be, held by any person other than the Borrower or any of its
Subsidiaries, which is converted or exchanged after December 31, 1999
into common stock of the Borrower or any of its Subsidiaries;
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(d) the foregoing amount (as it may from time to time be
adjusted as herein provided), shall be increased by an amount equal to
100% of the increase in Consolidated Net Worth attributable to the
issuance of common stock or other equity interests (other than
Redeemable Stock) subsequent to December 31, 1999 as consideration in
any Acquisitions permitted under section 9.2; and
(e) the foregoing amount (as it may from time to time be
adjusted as herein provided), shall be reduced by any and all
Restricted Stock Payments made pursuant to section 9.6 of this
Agreement after December 31, 1999.
9.10. CONSOLIDATED CAPITAL EXPENDITURES. The Borrower will not, and
will not permit any of its Subsidiaries to, make or incur Consolidated Capital
Expenditures during any fiscal year of the Borrower in excess of the amount
specified below, EXCEPT that in the event actual Consolidated Capital
Expenditures for any fiscal year are less than such amount, 50% of the
difference may be carried over to the next fiscal year, but not any subsequent
fiscal year:
================================================================================
FISCAL YEAR AMOUNT
================================================================================
December 31, 2000 $17,000,000
--------------------------------------------------------------------------------
December 31, 2001 $12,500,000
--------------------------------------------------------------------------------
December 31, 2002 $10,000,000
--------------------------------------------------------------------------------
Any fiscal year thereafter $10,000,000
================================================================================
9.11. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will
not permit any Subsidiary to, enter into any transaction or series of
transactions with any Affiliate (other than, in the case of the Borrower, any
Subsidiary, and in the case of a Subsidiary, the Borrower or another Subsidiary)
other than in the ordinary course of business of and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary than would
obtain in a comparable arm's-length transaction with a person other than an
Affiliate, EXCEPT (i) loans, advances and investments permitted by section 9.5,
(ii) sales of goods to an Affiliate for use or distribution outside the United
States which in the good faith judgment of the Borrower complies with any
applicable legal requirements of the Code, or (iii) agreements and transactions
with and payments to officers, directors and shareholders which are either (A)
entered into in the ordinary course of business and not prohibited by any of the
provisions of this Agreement, or (B) entered into outside the ordinary course of
business, approved by the directors or shareholders of the Borrower, and not
prohibited by any of the provisions of this Agreement.
9.12. PREPAYMENTS AND REFINANCINGS OF OTHER DEBT, ETC. The Borrower
will not, and will not permit any of its Subsidiaries to, make (or give any
notice in respect thereof) any voluntary or optional payment or prepayment or
redemption or acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities before due
for the purpose of paying when due) or exchange of, or refinance or refund any
other Indebtedness of the Borrower or its Subsidiaries which has an outstanding
principal balance (or Capitalized Lease Obligation, in the case of a Capital
Lease, or present value, based on the implicit interest rate, in the case of a
Synthetic Lease) greater than $1,000,000 (other than the Obligations and other
than intercompany loans and advances among the Borrower and its Subsidiaries);
PROVIDED that the Borrower or any Subsidiary may refinance or refund any such
Indebtedness if the Indebtedness resulting from such refinancing or refunding is
not prohibited by section 9.4.
9.13. LIMITATION ON CERTAIN RESTRICTIVE AGREEMENTS. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
enter into, incur or permit to exist or become effective, any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower or any Subsidiary to
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create, incur or suffer to exist any Lien upon any of its property or assets as
security for Indebtedness, or (b) the ability of any such Subsidiary to pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the Borrower, or to make loans or advances to the Borrower or any of the
Borrower's other Subsidiaries, or transfer any of its property or assets to the
Borrower or any of the Borrower's other Subsidiaries, EXCEPT for such
restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement and the other Credit Documents, (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest, (iv)
customary provisions restricting assignment of any licensing agreement entered
into in the ordinary course of business, (v) customary provisions restricting
the transfer of assets subject to Liens permitted under section 9.3(b), (vi)
restrictions contained in the Existing Indebtedness Agreements as in effect on
the Effective Date (and similar restrictions contained in any agreement or
instrument evidencing or governing any Indebtedness incurred in connection with
a refinancing thereof permitted under this Agreement), (vii) customary
restrictions affecting only a Subsidiary of the Borrower under any agreement or
instrument governing any of the Indebtedness of a Subsidiary permitted pursuant
to 9.4, (viii) any document relating to Indebtedness secured by a Lien permitted
by section 9.3, insofar as the provisions thereof limit grants of junior liens
on the assets securing such Indebtedness, and (ix) any operating lease or
Capital Lease, insofar as the provisions thereof limit grants of a security
interest in, or other assignments of, the related leasehold interest to any
other person.
9.14. PLAN TERMINATIONS, MINIMUM FUNDING, ETC. The Borrower will not,
and will not permit any ERISA Affiliate to, (i) terminate any Plan or plans so
as to result in liability of the Borrower or any ERISA Affiliate to the PBGC in
excess of $2,000,000 in the aggregate, (ii) permit to exist one or more events
or conditions which reasonably present a material risk of the termination by the
PBGC of any Plan or Plans with respect to which the Borrower or any ERISA
Affiliate would, in the event of such termination, incur liability to the PBGC
in excess of $2,000,000 in the aggregate, or (iii) fail to comply with the
minimum funding standards of ERISA and the Code with respect to any Plan.
SECTION 10. EVENTS OF DEFAULT.
10.1. EVENTS OF DEFAULT. Any of the following specified events (each
an "EVENT OF DEFAULT") shall constitute an Event of Default hereunder:
(A) PAYMENTS: the Borrower shall (i) default in the payment
when due of any principal of the Loans or any reimbursement obligation
in respect of any Unpaid Drawing; or (ii) default, and such default
shall continue for five or more days, in the payment when due of any
interest on the Loans or any Fees or any other amounts owing hereunder
or under any other Credit Document; or
(B) REPRESENTATIONS, ETC.: any representation, warranty or
statement made by the Borrower herein or by the Borrower or any other
Credit Party in any other Credit Document or in any statement or
certificate delivered or required to be delivered pursuant hereto or
thereto shall prove to be untrue in any material respect on the date as
of which made or deemed made; or
(C) CERTAIN NEGATIVE COVENANTS: the Borrower shall default
in the due performance or observance by it of any term, covenant or
agreement contained in sections 9.2 through 9.10 of this Agreement; or
(D) OTHER COVENANTS: the Borrower shall default in the due
performance or observance by it of any term, covenant or agreement
contained in this Agreement or any other Credit Document, other than
those referred to in section 10.1(a) or (b) or (c) above, and such
default shall not be remedied within 30 days after the earlier of (i)
an officer of the Borrower obtaining actual knowledge of such default
or (ii) the Borrower receiving written notice of such default from the
Administrative Agent or the Required Lenders (any such notice to be
identified as a "notice of default " and to refer specifically to this
paragraph); or
(E) DEFAULT UNDER OTHER AGREEMENTS: the Borrower or any of
its Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) owed to any Lender, or having
an unpaid principal amount of $5,000,000 or greater, and such default
shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness, or (ii)
default in the
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observance or performance of any agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto (and all grace periods
applicable to such observance, performance or condition shall have
expired), or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit
the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause any such Indebtedness to
become due prior to its stated maturity; or any such Indebtedness of
the Borrower or any of its Subsidiaries shall be declared to be due and
payable, or shall be required to be prepaid (other than by a regularly
scheduled required prepayment or redemption, prior to the stated
maturity thereof); or
(F) OTHER CREDIT DOCUMENTS: the Subsidiary Guaranty or any
Security Document (once executed and delivered) shall cease for any
reason (other than termination in accordance with its terms) to be in
full force and effect; or any Credit Party shall default in any payment
obligation thereunder; or any Credit Party shall default in any
material respect in the due performance and observance of any other
obligation thereunder and such default shall continue unremedied for a
period of at least 30 days after notice by the Administrative Agent or
the Required Lenders; or any Credit Party shall (or seek to) disaffirm
or otherwise limit its obligations thereunder otherwise than in strict
compliance with the terms thereof; or
(G) JUDGMENTS: one or more judgments or decrees shall be
entered against the Borrower and/or any of its Subsidiaries involving a
liability (whether or not covered by insurance) of $1,000,000 or more
in the aggregate for all such judgments and decrees for the Borrower
and its Subsidiaries) and any such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 30
days from the entry thereof; or
(H) BANKRUPTCY, ETC.: any of the following shall occur:
(i) the Borrower, any of its Material Subsidiaries
or any other Credit Party (the Borrower and each of such other
persons, each a "PRINCIPAL PARTY") shall commence a voluntary
case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "BANKRUPTCY CODE"); or
(ii) an involuntary case is commenced against any
Principal Party and the petition is not controverted within 10
days, or is not dismissed within 90 days, after commencement
of the case; or
(iii) a custodian (as defined in the Bankruptcy Code)
is appointed for, or takes charge of, all or substantially all
of the property of any Principal Party; or
(iv) any Principal Party commences (including by way
of applying for or consenting to the appointment of, or the
taking of possession by, a rehabilitator, receiver, custodian,
trustee, conservator or liquidator (collectively, a
"CONSERVATOR") of itself or all or any substantial portion of
its property) any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency, liquidation, rehabilitation,
conservatorship or similar law of any jurisdiction whether now
or hereafter in effect relating to such Principal Party; or
(v) any such proceeding is commenced against any
Principal Party to the extent such proceeding is consented by
such person or remains undismissed for a period of 90 days; or
(vi) any Principal Party is adjudicated insolvent or
bankrupt; or
(vii) any order of relief or other order approving
any such case or proceeding is entered; or
(viii) any Principal Party suffers any appointment of
any conservator or the like for it or any substantial part of
its property which continues undischarged or unstayed for a
period of 90 days; or
(ix) any Principal Party makes a general assignment
for the benefit of creditors; or
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(x) any corporate (or similar organizational) action
is taken by any Principal Party for the purpose of effecting
any of the foregoing; or
(I) ERISA: (i) any of the events described in clauses (i)
through (viii) of section 8.1(g) shall have occurred; or (ii) there
shall result from any such event or events the imposition of a lien,
the granting of a security interest, or a liability or a material risk
of incurring a liability; and (iii) any such event or events or any
such lien, security interest or liability, individually, and/or in the
aggregate, in the opinion of the Required Lenders, has had, or would
reasonably be likely to have, a Material Adverse Effect.
10.2. ACCELERATION, ETC. Upon the occurrence of any Event of Default,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required
Lenders, by written notice to the Borrower, take any or all of the following
actions (PROVIDED that, if an Event of Default specified in section 10.1(h)
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in clauses (a)
and (b) below shall occur automatically without the giving of any such notice):
(a) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately without
any other notice of any kind;
(b) declare the principal of and any accrued interest in
respect of all Loans, all Unpaid Drawings and all obligations owing
hereunder and thereunder to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower;
(c) terminate any Letter of Credit which may be terminated
in accordance with its terms;
(d) direct the Borrower to pay (and the Borrower hereby
agrees that on receipt of such notice or upon the occurrence of an
Event of Default with respect to the Borrower under section 10.1(h), it
will pay) to the Administrative Agent an amount of cash equal to the
aggregate Stated Amount of all Letters of Credit then outstanding (such
amount to be held as security after the Borrower's reimbursement
obligations in respect thereof); and/or
(e) take such other actions and exercise such other remedies
as may be permitted under applicable law.
10.3. APPLICATION OF LIQUIDATION PROCEEDS. All monies received by the
Administrative Agent or any Lender from the exercise of remedies hereunder or
under the other Credit Documents or under any other documents relating to this
Agreement shall, unless otherwise required by the terms of the other Credit
Documents or by applicable law, be applied as follows:
(A) FIRST, to the payment of all expenses (to the extent not
paid by the Borrower) incurred by the Administrative Agent and the
Lenders in connection with the exercise of such remedies, including,
without limitation, all reasonable costs and expenses of collection,
attorneys' fees, court costs and any foreclosure expenses;
(B) SECOND, to the payment PRO RATA of interest then accrued
on the outstanding Loans;
(C) THIRD, to the payment PRO RATA of any fees then accrued
and payable to the Administrative Agent, any Letter of Credit Issuer or
any Lender under this Agreement in respect of the Loans or the Letter
of Credit Outstandings;
(D) FOURTH, to the payment PRO RATA of (i) the principal
balance then owing on the outstanding Loans, (ii) the amounts then due
under Designated Hedge Agreements to creditors of the Borrower or any
Subsidiary, subject to confirmation by the Administrative Agent of any
calculations of termination or other payment amounts being made in
accordance with normal industry practice, and (iii) the Stated Amount
of the
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Letter of Credit Outstandings (to be held and applied by the
Administrative Agent as security for the reimbursement obligations in
respect thereof);
(E) FIFTH, to the payment to the Lenders of any amounts then
accrued and unpaid under sections 2.9, 2.10 and 3.5 hereof, and if such
proceeds are insufficient to pay such amounts in full, to the payment
of such amounts PRO RATA;
(F) SIXTH, to the payment PRO RATA of all other amounts owed
by the Borrower to the Administrative Agent, to any Letter of Credit
Issuer or any Lender under this Agreement or any other Credit Document,
and to any counterparties under Designated Hedge Agreements of the
Borrower and its Subsidiaries, and if such proceeds are insufficient to
pay such amounts in full, to the payment of such amounts PRO RATA; and
(G) FINALLY, any remaining surplus after all of the
Obligations have been paid in full, to the Borrower or to whomsoever
shall be lawfully entitled thereto.
SECTION 11. THE ADMINISTRATIVE AGENT.
11.1. APPOINTMENT. Each Lender hereby irrevocably designates and
appoints NCB as Administrative Agent (such term to include, for the purposes of
this section 11, NCB acting as Collateral Agent) to act as specified herein and
in the other Credit Documents, and each such Lender hereby irrevocably
authorizes NCB as the Administrative Agent for such Lender, to take such action
on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. The Administrative Agent agrees to act as such upon the
express conditions contained in this section 11. Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
in the other Credit Documents, nor any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent. The provisions of this section 11 are solely for the
benefit of the Administrative Agent, and the Lenders, and the Borrower and its
Subsidiaries shall not have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under this
Agreement, the Administrative Agent shall act solely as agent of the Lenders and
does not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for the Borrower or any of its
Subsidiaries.
11.2. DELEGATION OF DUTIES. The Administrative Agent may execute any
of its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by section 11.3.
11.3. EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such person under or in connection with this Agreement (except
for its or such person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or of its Subsidiaries or any
of their respective officers contained in this Agreement, any other Credit
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Credit Document or for any failure
of the Borrower or any Subsidiary of the Borrower or any of their respective
officers to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrower or any of its Subsidiaries. The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any Credit
Document or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
in connection herewith or therewith furnished or made by the Administrative
Agent to the Lenders or by or on behalf of the Borrower or any of its
Subsidiaries to the Administrative Agent or any Lender or be required
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to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
11.4. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile transmission, telex or teletype message, statement, order or
other document or conversation believed by it, in good faith, to be genuine and
correct and to have been signed, sent or made by the proper person or persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Borrower or any of its Subsidiaries), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Lenders (or
all of the Lenders, as to any matter which, pursuant to section 12.12, can only
be effectuated with the consent of all Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders.
11.5. NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, PROVIDED that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
11.6. NON-RELIANCE. Each Lender expressly acknowledges that neither
the Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representations or warranties to
it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower or any of its Subsidiaries, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and its Subsidiaries and made its own decision
to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent, or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Borrower and its Subsidiaries.
The Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, assets, property, financial and other conditions, prospects or
creditworthiness of the Borrower or any of its Subsidiaries which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
11.7. INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such ratably according to their
respective Loans and Unutilized Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Obligations) be imposed on, incurred by or asserted against the
Administrative Agent in its capacity as such in any way relating to or arising
out of this Agreement or any other Credit Document, or any documents
contemplated by or referred to herein or the transactions contemplated hereby or
any action taken or omitted to be taken by the Administrative Agent under or in
connection with any of the foregoing, but only to the extent that any of the
foregoing is not paid by the Borrower, PROVIDED that no Lender shall be liable
to the Administrative Agent for the payment of any portion of such liabilities,
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obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting solely from the Administrative
Agent's gross negligence or willful misconduct. If any indemnity furnished to
the Administrative Agent for any purpose shall, in the opinion of the
Administrative Agent, be insufficient or become impaired, the Administrative
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this section 11.7 shall survive the payment of all Obligations.
11.8. THE ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower, its Subsidiaries
and their Affiliates as though not acting as Administrative Agent hereunder.
With respect to the Loans made by it and all Obligations owing to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
11.9. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as the Administrative Agent upon 20 days' notice to the Lenders and the
Borrower. The Required Lenders shall appoint from among the Lenders a successor
Administrative Agent for the Lenders subject to prior approval by the Borrower
(such approval not to be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall include such
successor agent effective upon its appointment, and the resigning Administrative
Agent's rights, powers and duties as the Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement. After the retiring
Administrative Agent's resignation hereunder as the Administrative Agent, the
provisions of this section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.
11.10. OTHER AGENTS. Any Lender identified herein as a Co-Agent,
Syndication Agent, Documentation Agent, Managing Agent, Manager or any other
corresponding title, other than "Administrative Agent" or "Collateral Agent",
shall have no right, power, obligation, liability, responsibility or duty under
this Agreement or any other Credit Document except those applicable to all
Lenders as such. Each Lender acknowledges that it has not relied, and will not
rely, on any Lender so identified in deciding to enter into this Agreement or in
taking or not taking any action hereunder.
SECTION 12. MISCELLANEOUS.
12.1. PAYMENT OF EXPENSES ETC. The Borrower agrees to:
(a) whether or not the transactions herein contemplated are
consummated, pay (or reimburse the Administrative Agent and the Lenders
for) all reasonable out-of-pocket costs and expenses of the
Administrative Agent and the Lenders in connection with the
negotiation, preparation, execution and delivery of the Credit
Documents and the documents and instruments referred to therein, the
delivery of documents on the Closing Date pursuant to section 6.1 and
the initial Borrowing hereunder, including, without limitation, the
reasonable fees and disbursements of Xxxxx, Day, Xxxxxx & Xxxxx,
special counsel to the Administrative Agent;
(b) pay (or reimburse the Administrative Agent and the
Lenders for) all reasonable out-of- pocket costs and expenses of the
Administrative Agent and the Lenders in connection with any amendment,
waiver or consent relating to any of the Credit Documents which is
requested by any Credit Party, including, without limitation, (i) the
reasonable fees and disbursements of Xxxxx, Day, Xxxxxx & Xxxxx,
special counsel to the Administrative Agent, and (ii) the reasonable
fees and disbursements of any individual counsel to any Lender
(including allocated costs of internal counsel);
(c) pay (or reimburse the Administrative Agent and the
Lenders for) all reasonable out-of- pocket costs and expenses of the
Administrative Agent and the Lenders in connection with the enforcement
of any of the Credit Documents or the other documents and instruments
referred to therein, including, without limitation, (i) the reasonable
fees and disbursements of Xxxxx, Day, Xxxxxx & Xxxxx, special counsel
to the Administrative Agent, and (ii) the reasonable fees and
disbursements of any individual counsel to any Lender (including
allocated costs of internal counsel);
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(d) without limitation of the preceding clause (c), in the
event of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of the Borrower or any of its Subsidiaries, pay
all costs of collection and defense, including reasonable attorneys'
fees in connection therewith and in connection with any appellate
proceeding or post-judgment action involved therein, which shall be due
and payable together with all required service or use taxes;
(e) pay and hold each of the Lenders harmless from and
against any and all present and future stamp and other similar taxes
with respect to the foregoing matters and save each of the Lenders
harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent
attributable to such Lender) to pay such taxes; and
(f) indemnify each Lender, its officers, directors,
employees, representatives and agents (collectively, the "INDEMNITEES")
from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses reasonably incurred by any of
them as a result of, or arising out of, or in any way related to, or by
reason of
(i) any investigation, litigation or other
proceeding (whether or not any Lender is a party thereto)
related to the entering into and/or performance of any Credit
Document or the use of the proceeds of any Loans hereunder or
the consummation of any transactions contemplated in any
Credit Document, other than any such investigation, litigation
or proceeding arising out of transactions solely between any
of the Lenders or the Administrative Agent, transactions
solely involving the assignment by a Lender of all or a
portion of its Loans and Commitments, or the granting of
participations therein, as provided in this Agreement, or
arising solely out of any examination of a Lender by any
regulatory or other governmental authority having jurisdiction
over it, or
(ii) the actual or alleged presence of Hazardous
Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property owned, leased or at
any time operated by the Borrower or any of its Subsidiaries,
the release, generation, storage, transportation, handling or
disposal of Hazardous Materials at any location, whether or
not owned or operated by the Borrower or any of its
Subsidiaries, if the Borrower or any such Subsidiary could
have or is alleged to have any responsibility in respect
thereof, the non-compliance of any such Real Property with
foreign, federal, state and local laws, regulations and
ordinances (including applicable permits thereunder)
applicable thereto, or any Environmental Claim asserted
against the Borrower or any of its Subsidiaries, in respect of
any such Real Property,
including, in each case, without limitation, the reasonable documented
fees and disbursements of counsel incurred in connection with any such
investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred
by reason of the gross negligence or willful misconduct of the person
to be indemnified or of any other Indemnitee who is such person or an
Affiliate of such person).
To the extent that the undertaking to indemnify, pay or hold harmless any person
set forth in the preceding sentence may be unenforceable because it is violative
of any law or public policy, the Borrower shall make the maximum contribution to
the payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
12.2. RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Lender (including, without limitation, by
branches and agencies of such Lender wherever located) to or for the credit or
the account of the Borrower against and on account of the Obligations and
liabilities of the Borrower to such Lender under this Agreement or under any of
the other Credit Documents, including, without limitation, all interests in
Obligations the Borrower purchased by such Lender pursuant to section 12.4(c),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or not
such Lender shall have made
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any demand hereunder and although said Obligations, liabilities or claims, or
any of them, shall be contingent or unmatured.
12.3. NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile and electronic e-mail transmission or
cable communication) and mailed, telegraphed, telexed, transmitted, e-mailed,
cabled or delivered, if to the Borrower, at 000 Xxxxx Xxxxx, Xxxxxxxxx, Xxxx
00000, attention: Corporate Secretary (facsimile: (000) 000-0000); if to any
Lender at its address specified for such Lender on Annex I hereto; if to the
Administrative Agent, at its Notice Office; or at such other address as shall be
designated by any party in a written notice to the other parties hereto. All
such notices and communications shall be mailed, telegraphed, telexed,
telecopied, e-mailed, or cabled or sent by overnight courier, and shall be
effective when received.
12.4. BENEFIT OF AGREEMENT. (a) SUCCESSORS AND ASSIGNS GENERALLY. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and assigns, PROVIDED that
the Borrower may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of all the Lenders, and, PROVIDED,
FURTHER, that any assignment by a Lender of its rights and obligations hereunder
shall be effected in accordance with section 12.4(c).
(B) GRANT OF PARTICIPATIONS BY LENDERS. Notwithstanding the
foregoing, each Lender may at any time grant participations in any of its rights
hereunder or under any of the Notes to (x) an Affiliate of such Lender which is
a commercial bank, financial institution or other "accredited investor" (as
defined in SEC Regulation D), (y) another Lender which is not a Defaulting
Lender, or (z) one or more Eligible Transferees, PROVIDED that in the case of
any such participation,
(i) the participant shall not have any rights under this
Agreement or any of the other Credit Documents, including rights of
consent, approval or waiver (the participant's rights against such
Lender in respect of such participation to be those set forth in the
agreement executed by such Lender in favor of the participant relating
thereto),
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Commitment hereunder) shall remain
unchanged,
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iv) such Lender shall remain the holder of any Note for all
purposes of this Agreement and
(v) the Borrower, the Administrative Agent, and the other
Lenders shall continue to deal solely and directly with the selling
Lender in connection with such Lender's rights and obligations under
this Agreement, and all amounts payable by the Borrower hereunder shall
be determined as if such Lender had not sold such participation, except
that the participant shall be entitled to the benefits of sections 2.9
and 2.10 of this Agreement to the extent that such Lender would be
entitled to such benefits if the participation had not been entered
into or sold, and
PROVIDED FURTHER, that no Lender shall transfer, grant or sell any participation
under which the participant shall have rights to approve any amendment to or
waiver of this Agreement or any other Credit Document except to the extent such
amendment or waiver would (1) change any date upon which a mandatory and
automatic reduction in any Commitment in which such Participant is participating
is scheduled to be made, or change the amount thereof, (2) change any date upon
which an installment payment of any Loans in which such Participant is
participating is scheduled to be made, or change the amount thereof, (3) extend
the final scheduled maturity of the Loans in which such participant is
participating (it being understood that any waiver of the making of, or the
application of, any mandatory prepayment to such Loans shall not constitute an
extension of the final maturity date thereof), (4) reduce the rate or extend the
time of payment of interest or Fees on any such Loan or Commitment (except in
connection with a waiver of the applicability of any post-default increase in
interest rates), (5) reduce the principal amount of any such Loan, (6) increase
such participant's participating interest in any Commitment over the amount
thereof then in effect, (7) release any Credit Party from its obligations under
the Subsidiary Guaranty, except strictly in accordance with the provisions of
the Credit Documents, (8) release all or any
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substantial portion of the Collateral, in each case except strictly in
accordance with the provisions of the Credit Documents, or (9) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement.
(C) ASSIGNMENTS BY LENDERS. Notwithstanding the foregoing, (x) any
Lender may assign all or a fixed portion of its Loans and/or Commitment, and its
rights and obligations hereunder, to another Lender that is not a Defaulting
Lender, or to an Affiliate of any Lender (including itself) and which is not a
Defaulting Lender and which is a commercial bank, financial institution or other
"accredited investor" (as defined in SEC Regulation D), and (y) any Lender may
assign all, or if less than all, a fixed portion, equal to at least $5,000,000
in the aggregate for the assigning Lender or assigning Lenders, of its Loans
and/or Commitment and its rights and obligations hereunder, to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Lender by execution of an Assignment Agreement, PROVIDED that,
(i) in the case of any assignment of a portion of any Loans
and/or Commitment of a Lender, such Lender shall retain a minimum fixed
portion of all Loans and Commitments equal to at least $5,000,000,
(ii) at the time of any such assignment Annex I shall be
deemed modified to reflect the Commitments of such new Lender and of
the existing Lenders,
(iii) upon surrender of the old Notes, new Notes will be
issued, at the Borrower's expense, to such new Lender and to the
assigning Lender, such new Notes to be in conformity with the
requirements of section 2.5 (with appropriate modifications) to the
extent needed to reflect the revised Commitments,
(iv) in the case of clause (y) only, the consent of the
Administrative Agent and each Letter of Credit Issuer shall be required
in connection with any such assignment (which consent shall not be
unreasonably withheld or delayed), and
(v) the Administrative Agent shall receive at the time of
each such assignment, from the assigning or assignee Lender, the
payment of a non-refundable assignment fee of $3,500, and
PROVIDED FURTHER, that such transfer or assignment will not be effective until
recorded by the Administrative Agent on the Lender Register maintained by it as
provided herein.
To the extent of any assignment pursuant to this section 12.4(c) the
assigning Lender shall be relieved of its obligations hereunder with respect to
its assigned Commitments.
At the time of each assignment pursuant to this section 12.4(c) to a
person which is not already a Lender hereunder and which is not a United States
person (as such term is defined in section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Lender shall provide to the
Borrower and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable a Section 5.4(b)(ii) Certificate) described in section
5.4(b). To the extent that an assignment of all or any portion of a Lender's
Commitment and related outstanding Obligations pursuant to this section 12.4(c)
would, at the time of such assignment, result in increased costs under section
2.9 from those being charged by the respective assigning Lender prior to such
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the respective
assignment).
Nothing in this section 12.4(c) shall prevent or prohibit (i) any
Lender which is a bank, trust company or other financial institution from
pledging its Notes or Loans to a Federal Reserve Bank in support of borrowings
made by such Lender from such Federal Reserve Bank, or (ii) any Lender which is
a trust, limited liability company, partnership or other investment company from
pledging its Notes or Loans to a trustee or agent for the benefit of holders of
certificates or debt securities issued by it. No such pledge, or any assignment
pursuant to or in lieu of an enforcement of such a pledge, shall relieve the
transferor Lender from its obligations hereunder.
(D) NO SEC REGISTRATION OR BLUE SKY COMPLIANCE. Notwithstanding any
other provisions of this section 12.4, no transfer or assignment of the
interests or obligations of any Lender hereunder or any grant of participation
therein
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shall be permitted if such transfer, assignment or grant would require the
Borrower to file a registration statement with the SEC or to qualify the Loans
under the "Blue Sky" laws of any State.
(E) REPRESENTATIONS OF LENDERS. Each Lender initially party to this
Agreement hereby represents, and each person that became a Lender pursuant to an
assignment permitted by this section 12.4 will, upon its becoming party to this
Agreement, represent that it is a commercial lender, other financial institution
or other "accredited" investor (as defined in SEC Regulation D) which makes or
acquires loans in the ordinary course of its business and that it will make or
acquire Loans for its own account in the ordinary course of such business,
PROVIDED that subject to the preceding sections 12.4(b) and (c), the disposition
of any promissory notes or other evidences of or interests in Indebtedness held
by such Lender shall at all times be within its exclusive control.
(F) GRANTS BY LENDERS TO SPCS. Notwithstanding anything to the
contrary contained herein, any Lender, (a "GRANTING LENDER") may grant to a
special purpose funding vehicle (an "SPC"), identified as such in writing from
time to time by the Granting Lender to the Administrative Agent, the Borrower
and the other Lenders, the option to provide to the Borrower all or any part of
any Loan that such Granting Lender would otherwise be obligated to make to the
Borrower pursuant to this Agreement; PROVIDED that (i) nothing herein shall
constitute a commitment by any SPC to make any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to provide all or any part of
such Loan, the Granting Lender shall be obligated to make such Loan pursuant to
the terms hereof. The making of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
made by such Granting Lender. Each party hereto hereby agrees that no SPC shall
be liable for any indemnity or payment under this Agreement for which a Lender
would otherwise be liable for so long as, and to the extent, the Granting Lender
provides such indemnity or makes such payment. In furtherance of the foregoing,
each party hereto hereby agrees (which agreement shall survive the termination
of this Agreement) that, prior to the date that is one year and one day after
the payment in full of all outstanding commercial paper or other senior
indebtedness of any SPC, it will not institute against, or join any other person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. In addition, notwithstanding anything to the contrary contained
in this section 12.4, any SPC may (i) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and without paying
any processing fee therefor, assign all or a portion of its interests in any
Loans to the Granting Lender or to any financial institutions providing
liquidity and/or credit support to or for the account of such SPC to support the
funding or maintenance of Loans and (ii) disclose on a confidential basis any
non- public information relating to its Loans to any rating agency, commercial
paper dealer or provider of any surety, guarantee or credit or liquidity
enhancements to such SPC. This section 12.4(f) may not be amended without the
written consent of any Granting Lender affected thereby.
12.5. NO WAIVER: REMEDIES CUMULATIVE. No failure or delay on the part
of the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower and the Administrative Agent or any Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Administrative
Agent or any Lender would otherwise have. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
12.6. PAYMENTS PRO RATA. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrower in
respect of any Obligations, it shall distribute such payment to the Lenders
(other than any Lender that has expressly waived in writing its right to receive
its PRO RATA share thereof) PRO RATA based upon their respective shares, if any,
of the Obligations with respect to which such payment was received. As to any
such payment received by the Administrative Agent prior to 1:00 P.M. (local time
at the Payment Office) in funds which are immediately available on such day, the
Administrative Agent will use all reasonable efforts to distribute such payment
in immediately available funds on the same day to the Lenders as aforesaid.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment
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of the principal of, or interest on, the Loans or Fees, of a sum which with
respect to the related sum or sums received by other Lenders is in a greater
proportion than the total of such Obligation then owed and due to such Lender
bears to the total of such Obligation then owed and due to all of the Lenders
immediately prior to such receipt, then such Lender receiving such excess
payment shall purchase for cash without recourse or warranty from the other
Lenders an interest in the Obligations to such Lenders in such amount as shall
result in a proportional participation by all of the Lenders in such amount,
PROVIDED that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding sections 12.6(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Lenders which are not Defaulting Lenders, as opposed to
Defaulting Lenders.
12.7. CALCULATIONS: COMPUTATIONS. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); PROVIDED, that if at any time the computations
determining compliance with section 9 utilize accounting principles different
from those utilized in the financial statements furnished to the Lenders, such
computations shall set forth in reasonable detail a description of the
differences and the effect upon such computations.
(b) All computations of interest on Eurodollar Loans hereunder and
all computations of Commitment Fees, Letter of Credit Fees and other Fees
hereunder shall be made on the actual number of days elapsed over a year of 360
days, and all computations of interest on Prime Rate Loans hereunder shall be
made on the actual number of days elapsed over a year of 365 or 366 days, as
applicable.
12.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF OHIO. TO THE FULLEST
EXTENT PERMITTED BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATE
OF OHIO GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS. Any legal
action or proceeding with respect to this Agreement or any other Credit Document
may be brought in the Court of Common Pleas of Cuyahoga County, Ohio, or in the
United States District Court for the Northern District of Ohio, and, by
execution and delivery of this Agreement, the Borrower hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Borrower hereby
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Borrower at its
address for notices pursuant to section 12.3, such service to become effective
30 days after such mailing or at such earlier time as may be provided under
applicable law. Nothing herein shall affect the right of the Administrative
Agent or any Lender to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Borrower in any
other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in section 12.8(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS
(INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR OTHER MODIFICATIONS
RELATING TO ANY OF THE FOREGOING), OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. EACH PARTY HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER
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INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS PARAGRAPH.
12.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10. EFFECTIVENESS; INTEGRATION. This Agreement shall become
effective on the date (the "EFFECTIVE DATE") on which the Borrower and each of
the Lenders shall have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Administrative Agent at the
Notice Office of the Administrative Agent or, in the case of the Lenders, shall
have given to the Administrative Agent telephonic (confirmed in writing),
written telex or facsimile transmission notice (actually received) at such
office that the same has been signed and mailed to it. This Agreement, the other
Credit Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent, for its own account and benefit and/or for the
account, benefit of, and distribution to, the Lenders, constitute the entire
contract among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof or thereof.
12.11. HEADINGS DESCRIPTIVE. The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.12. AMENDMENT OR WAIVER. Neither this Agreement nor any terms hereof
or thereof may be changed, waived, discharged or terminated UNLESS such change,
waiver, discharge or termination is in writing signed by the Borrower and the
Required Lenders, PROVIDED that no such change, waiver, discharge or termination
shall, without the consent of each Lender (other than a Defaulting Lender)
affected thereby,
(a) change any date upon which a mandatory and automatic
reduction in any Commitment of such Lender is scheduled to be made, or
change the amount thereof,
(b) change any date upon which an installment payment of any
Loans made by such Lender is scheduled to be made, or change the amount
thereof,
(c) extend the final scheduled maturity of any Commitment or
Loan of such Lender (it being understood that any waiver of the making
of, or the application of, any mandatory prepayment to such Loans shall
not constitute an extension of the final maturity date thereof),
(d) reduce the rate or extend the time of payment of
interest or Fees on any Loan or Commitment of such Lender (except in
connection with a waiver of the applicability of any post-default
increase in interest rates),
(e) reduce the principal amount of any Loan of any Lender,
(f) increase such Lender's Commitment over the amount
thereof then in effect,
(g) release the Borrower from any obligations as a guarantor
of its Subsidiaries' obligations under any Credit Document,
(h) release any Credit Party from the Subsidiary Guaranty,
except strictly in accordance with the provisions of the Credit
Documents,
(i) release all or any substantial portion of the
Collateral, except strictly in accordance with the provisions of the
Credit Documents,
(j) change the definition of the term "Change of Control" or
any of the provisions of section 4.3 or 5.2 which are applicable upon a
Change of Control,
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(k) amend, modify or waive any provision of section 9.4(c)
or the definition of Permitted Receivables Program,
(l) amend, modify or waive any provision of this section
12.12, or section 11.7, 12.1, 12.4, 12.6 or 12.7(b), or any other
provision of any of the Credit Documents pursuant to which the consent
or approval of all Lenders is by the terms of such provision explicitly
required,
(m) reduce the percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(n) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement; and
PROVIDED, FURTHER, that no change, waiver or other modification affecting the
rights and benefits of a Lender and not all Lenders in a like or similar manner,
shall be made without the written consent of such Lender. No provision of
section 3 or 11 may be amended without the consent of (x) any Letter of Credit
Issuer adversely affected thereby or (y) the Administrative Agent, respectively.
The Administrative Agent and the Collateral Agent will not enter into
any amendment, change, waiver, discharge or termination of any of the other
Credit Documents, EXCEPT as specifically provided therein or as authorized as
contemplated by a written request or consent of the Required Lenders (or all of
the Lenders, or all of the Lenders (other than any Defaulting Lender), as
applicable, as to any matter which, pursuant to this section 12.12, can only be
effectuated with the written consent of all Lenders, or all Lenders (other than
any Defaulting Lender), as the case may be).
12.13. SURVIVAL OF INDEMNITIES. All indemnities set forth herein
including, without limitation, in section 2.9, 2.10, 3.5, 11.7 or 12.1 shall
survive the execution and delivery of this Agreement and the making and
repayment of Loans.
12.14. DOMICILE OF LOANS. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, PROVIDED that the Borrower shall not be responsible for costs arising
under section 2.9 resulting from any such transfer (other than a transfer
pursuant to section 2.11) to the extent not otherwise applicable to such Lender
prior to such transfer.
12.15. CONFIDENTIALITY. (a) Each of the Administrative Agent, each
Letter of Credit Issuer and the Lenders agrees to maintain the confidentiality
of the Confidential Information (as defined below), EXCEPT that Confidential
Information may be disclosed (1) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the persons to whom such disclosure is made will be
informed of the confidential nature of such Confidential Information and
instructed to keep such Confidential Information confidential), (2) to any
direct or indirect contractual counterparty in any swap, hedge or similar
agreement (or to any such contractual counterparty's professional advisor, so
long as such contractual counterparty (or such professional advisor) agrees to
be bound by the provisions of this section 12.15, (3) to the extent requested by
any regulatory authority, (4) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (5) to any other party
to this Agreement, (6) to any other creditor of the Borrower or any other Credit
Party which is a direct or intended beneficiary of any of the Credit Documents,
(7) in connection with the exercise of any remedies hereunder or under any of
the other Credit Documents, or any suit, action or proceeding relating to this
Agreement or any of the other Credit Documents or the enforcement of rights
hereunder or thereunder, (8) subject to an agreement containing provisions
substantially the same as those of this section 12.15, to any assignee of or
participant in, or any prospective assignee of or participant in, any of its
rights or obligations under this Agreement, (9) with the consent of the
Borrower, or (10) to the extent such Confidential Information (i) becomes
publicly available other than as a result of a breach of this section 12.15, or
(ii) becomes available to the Administrative Agent, any Letter of Credit Issuer
or any Lender on a nonconfidential basis from a source other than the Borrower.
(b) For the purposes of this section 12.15, "CONFIDENTIAL
INFORMATION" means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is available to
the Administrative Agent, any Letter of Credit Issuer or any Lender on a
nonconfidential basis prior to disclosure by the
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Borrower; PROVIDED that, in the case of information received from the Borrower
after the date hereof, such information is clearly identified at the time of
delivery as confidential.
(c) Any person required to maintain the confidentiality of
Confidential Information as provided in this section 12.15 shall be considered
to have complied with its obligation to do so if such person has exercised the
same degree of care to maintain the confidentiality of such Confidential
Information as such person would accord to its own confidential information. The
Borrower hereby agrees that the failure of the Administrative Agent, any Letter
of Credit Issuer or any Lender to comply with the provisions of this section
12.15 shall not relieve the Borrower, or any other Credit Party, of any of its
obligations under this Agreement or any of the other Credit Documents.
12.16. LENDER REGISTER. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this section
12.16, to maintain a register (the "LENDER REGISTER") on or in which it will
record the names and addresses of the Lenders, and the Commitments from time to
time of each of the Lenders, the Loans made to the Borrower by each of the
Lenders and each repayment and prepayment in respect of the principal amount of
such Loans of each such Lender. Failure to make any such recordation, or (absent
manifest error) any error in such recordation, shall not affect the Borrower's
obligations in respect of such Loans. With respect to any Lender, the transfer
of the Commitment of such Lender and the rights to the principal of, and
interest on, any Loan made pursuant to such Commitment shall not be effective
until such transfer is recorded on the Lender Register maintained by the
Administrative Agent with respect to ownership of such Commitment and Loans and
prior to such recordation all amounts owing to the transferor with respect to
such Commitment and Loans shall remain owing to the transferor. The registration
of assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Administrative Agent on the Lender Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered
Assignment Agreement pursuant to section 12.4(c). The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this section 12.16. The Lender Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
12.17. LIMITATIONS ON LIABILITY OF THE LETTER OF CREDIT ISSUERS. The
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letters of
Credit. Neither any Letter of Credit Issuer nor any of its officers or directors
shall be liable or responsible for: (a) the use which may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (c) payment by a
Letter of Credit Issuer against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, EXCEPT that the Borrower (or a Subsidiary which is the account party
in respect of the Letter of Credit in question) shall have a claim against a
Letter of Credit Issuer, and a Letter of Credit Issuer shall be liable to the
Borrower (or such Subsidiary), to the extent of any direct, but not
consequential, damages suffered by the Borrower (or such Subsidiary) which the
Borrower (or such Subsidiary) proves were caused by (i) such Letter of Credit
Issuer's willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or (ii) such Letter of Credit Issuer's willful failure to make lawful
payment under any Letter of Credit after the presentation to it of documentation
strictly complying with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, a Letter of Credit Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation.
12.18. GENERAL LIMITATION OF LIABILITY. No claim may be made by the
Borrower, any Lender, the Administrative Agent, any Letter of Credit Issuer or
any other person against the Administrative Agent, any Letter of Credit Issuer,
or any other Lender or the Affiliates, directors, officers, employees, attorneys
or agents of any of them for any damages other than actual compensatory damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement or
any of the other Credit Documents, or any act, omission or event occurring in
connection therewith; and each of the Borrower, each Lender, the Administrative
Agent and each Letter of Credit Issuer hereby, to the fullest extent permitted
under applicable law, waives, releases and agrees not to xxx or counterclaim
upon any such claim for any special, consequential or punitive damages, whether
or not accrued and whether or not known or suspected to exist in its favor.
70
71
12.19. NO DUTY. All attorneys, accountants, appraisers, consultants and
other professional persons (including the firms or other entities on behalf of
which any such person may act) retained by the Administrative Agent or any
Lender with respect to the transactions contemplated by the Credit Documents
shall have the right to act exclusively in the interest of the Administrative
Agent or such Lender, as the case may be, and shall have no duty of disclosure,
duty of loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to the Borrower, to any of its Subsidiaries, or to any other person,
with respect to any matters within the scope of such representation or related
to their activities in connection with such representation. The Borrower agrees,
on behalf of itself and its Subsidiaries, not to assert any claim or
counterclaim against any such persons with regard to such matters, all such
claims and counterclaims, now existing or hereafter arising, whether known or
unknown, foreseen or unforeseeable, being hereby waived, released and forever
discharged.
12.20. LENDERS AND AGENT NOT FIDUCIARY TO BORROWER, ETC. The
relationship among the Borrower and its Subsidiaries, on the one hand, and the
Administrative Agent, each Letter of Credit Issuer and the Lenders, on the other
hand, is solely that of debtor and creditor, and the Administrative Agent, each
Letter of Credit Issuer and the Lenders have no fiduciary or other special
relationship with the Borrower and its Subsidiaries, and no term or provision of
any Credit Document, no course of dealing, no written or oral communication, or
other action, shall be construed so as to deem such relationship to be other
than that of debtor and creditor.
12.21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties herein shall survive the making of Loans and the issuance of
Letters of Credit hereunder, the execution and delivery of this Agreement, the
Notes and the other documents the forms of which are attached as Exhibits
hereto, the issue and delivery of the Notes, any disposition thereof by any
holder thereof, and any investigation made by the Administrative Agent or any
Lender or any other holder of any of the Notes or on its behalf. All statements
contained in any certificate or other document delivered to the Administrative
Agent or any Lender or any holder of any Notes by or on behalf of the Borrower
or of its Subsidiaries pursuant hereto or otherwise specifically for use in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower hereunder, made as of the
respective dates specified therein or, if no date is specified, as of the
respective dates furnished to the Administrative Agent or any Lender.
12.22. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
12.23. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action, event, condition or
circumstance is not permitted by any of such covenants, the fact that it would
be permitted by an exception to, or would otherwise be within the limitations or
restrictions of, another covenant, shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or event, condition or
circumstance exists.
12.24. NO RELIANCE ON MARGIN STOCK. Each Lender represents to the
Administrative Agent and each of the other Lenders that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.
12.25. INTEREST RATE LIMITATION. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the "CHARGES"), shall exceed the maximum
lawful rate (the "MAXIMUM RATE") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Prime Rate to the date of repayment, shall have
been received by such Lender.
[The balance of this page is intentionally blank.]
71
72
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
ROYAL APPLIANCE MFG. CO. NATIONAL CITY BANK,
INDIVIDUALLY AS A LENDER AND A LETTER
OF CREDIT ISSUER AND AS COLLATERAL
BY: AGENT AND AS ADMINISTRATIVE AGENT
------------------------------
XXXXXXX X. XXXXX
CHIEF FINANCIAL OFFICER BY:
------------------------------------
VICE PRESIDENT
COMERICA BANK THE HUNTINGTON NATIONAL BANK
BY: BY:
------------------------------ ------------------------------------
TITLE: TITLE:
LASALLE BANK NATIONAL ASSOCIATION FIRSTAR BANK, N. A.
BY: BY:
------------------------------ ------------------------------------
TITLE: TITLE:
PNC BANK, NATIONAL ASSOCIATION FIFTH THIRD BANK, NORTHEASTERN OHIO
BY: BY:
------------------------------ ------------------------------------
TITLE: TITLE:
72
73
ANNEX I
INFORMATION AS TO LENDERS
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
-----------------------------------------------------------------------------------------------------------------------------------
National City Bank National City Bank National City Bank
COMMITMENT: 0000 Xxxx Xxxxx Xxxxxx 0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000 Xxxxxxxxx, Xxxx 00000
$21,500,000
CONTACTS/ NOTIFICATION METHODS:
Xxxx Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
CONTACT FOR BORROWINGS, PAYMENTS,
ETC.:
Xxxxxx Djucik
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WIRING INFORMATION:
ABA # 041 000 124
Commercial Loan Operations:
Ref.: Royal Appliance Mfg. Co.
-----------------------------------------------------------------------------------------------------------------------------------
Comerica Bank Comerica Bank Comerica Bank
COMMITMENT: Comerica Tower at Detroit Center Comerica Tower at Detroit Center
000 Xxxxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx
$18,500,000 Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000
NOTIFICATION/PRIMARY CONTACT:
Xxxxxxx X. Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
CONTACT FOR BORROWINGS, PAYMENTS,
ETC.:
Xxxxxx Xxxxxx
Tel. : (000) 000-0000
Fax.: (000) 000-0000
PAYMENT INSTRUCTIONS:
ABA # 072 0000 96
A/C # 0000000000
Attention: Commercial Loan
Operations
Reference: Royal Appliance Mfg.
Co.
-----------------------------------------------------------------------------------------------------------------------------------
74
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
-----------------------------------------------------------------------------------------------------------------------------------
LaSalle Bank LaSalle Bank National Association LaSalle Bank National Association
National Association COMMITMENT: 000 Xxxxx XxXxxxx Xxxxxx 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000
$8,000,000
NOTIFICATION/PRIMARY CONTACT:
Xxxxxxx Xxxxxx
Vice President
LaSalle Bank National Association
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Tel. (000) 000-0000
Fax (000) 000-0000
CONTACT FOR BORROWINGS, PAYMENTS,
ETC.:
Xxxx Xxxxx
Tel. (000) 000-0000
Fax (000) 000-0000
PAYMENT INSTRUCTIONS:
ABA # 071 000 505
A/C# 1378018-RC-7300
Attention: Commercial Loan
Operations
Reference: Royal Appliance Mfg.
Co.
-----------------------------------------------------------------------------------------------------------------------------------
2
75
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
-----------------------------------------------------------------------------------------------------------------------------------
The Huntington The Huntington National Bank The Huntington National Bank
National Bank COMMITMENT: 000 Xxxxxx Xxxxxx 000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000 Xxxxxxxxx, Xxxx 00000
$8,000,000
NOTIFICATION/PRIMARY CONTACT:
Xxxxxxx X. Xxxx
Vice President
Tel. (000) 000-0000
Fax. (000) 000-0000
CONTACT FOR BORROWINGS, PAYMENTS,
ETC.:
Xxxxxxx X. Xxxxx
Tel. (000) 000-0000
Fax. (000) 000-0000
PAYMENT INSTRUCTIONS:
The Huntington National Bank
Columbus, Ohio
ABA # 044 000 024
Attention: Commercial Loan
Operations
Reference: Royal Appliance Mfg.
Co.
-----------------------------------------------------------------------------------------------------------------------------------
Firstar Bank, N. A. Firstar Bank, N. A. Firstar Bank, N. A.
COMMITMENT: 0000 Xxxxxx Xxxxxx 0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000 Xxxxxxxxx, Xxxx 00000
$8,000,000
NOTIFICATION/PRIMARY CONTACT:
Xxxx X. Xxxxxxx
Senior Vice President
Tel. (000) 000-0000
Fax. (000) 000-0000
CONTACT FOR BORROWINGS, PAYMENTS,
ETC.:
Xxxxx Xxxxxxx
Tel. (000) 000-0000
Fax. (000) 000-0000
PAYMENT INSTRUCTIONS:
ABA # 042 000 013
A/C # 9901893
Attention: Commercial Loan
Operations--Exceptions A. Dept
Reference: Royal Appliance Mfg.
Co.
-----------------------------------------------------------------------------------------------------------------------------------
3
76
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
-----------------------------------------------------------------------------------------------------------------------------------
PNC Bank, National PNC Bank, National Association PNC Bank, National Association
Association COMMITMENT: One PNC Plaza One PNC Plaza
000 Xxxxx Xxxxxx 000 Xxxxx Xxxxxx
$8,000,000 Xxxxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxxxxxx 00000
NOTIFICATION/PRIMARY CONTACT:
Xxxxxx X. Xxxxxx
Senior Vice President
Tel. (000) 000-0000
Fax. (000) 000-0000
CONTACT FOR BORROWINGS, PAYMENTS,
ETC.:
Xxxxx Xxxxxxx
Tel. (000) 000-0000
Fax. (000) 000-0000
PAYMENT INSTRUCTIONS:
ABA # 043 000 096
A/C # G/L 196030010890
Attention: Commercial Loan
Operations
Reference: Royal Appliance Mfg.
Co.
-----------------------------------------------------------------------------------------------------------------------------------
4
77
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
-----------------------------------------------------------------------------------------------------------------------------------
Fifth Third Bank, Fifth Third Bank, Northeastern Ohio Fifth Third Bank, Northeastern
Northeastern Ohio COMMITMENT: 0000 Xxxx Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000 0000 Xxxx Xxxxx Xxxxxx
x0,000,000 Xxxxxxxxx, Xxxx 00000
NOTIFICATION/PRIMARY CONTACT:
Xxxxx X. Xxxxxxxx
Vice President
Tel. (000) 000-0000
Fax. (000) 000-0000
CONTACT FOR BORROWINGS, PAYMENTS,
ETC.:
Xxxxx Xxxxxxxx
Tel. (000) 000-0000
Fax. (000) 000-0000
PAYMENT INSTRUCTIONS:
Fifth Third Bank, Cincinnati Ohio
ABA # 042 000 314
A/C# 99208599
Attention: Commercial Loan
Operations (for Fifth Third Bank,
Northeastern Ohio)
Reference: Royal Appliance Mfg.
Co.
TOTAL
COMMITMENT
OF ALL
LENDERS:
$80,000,000
-----------------------------------------------------------------------------------------------------------------------------------
5
78
ANNEX II
INFORMATION AS TO SUBSIDIARIES
(as of March 7, 2000)
PERCENTAGE OF
OUTSTANDING STOCK
NAME OF TYPE OF JURISDICTION OR OTHER EQUITY
SUBSIDIARY ORGANIZATION WHERE INTERESTS OWNED
ORGANIZED (INDICATING WHETHER
OWNED BY THE
BORROWER OR A
SPECIFIED SUBSIDIARY)
-----------------------------------------------------------------------------------------------------------------------------------
Dirt Devil, Inc. corporation Ohio Wholly-Owned
Royal Appliance Receivables, Inc. corporation Ohio Wholly-Owned
Royal Appliance FSC, Inc. corporation U.S.V.I. Wholly-Owned
Royal Appliance International Co. corporation Delaware Wholly-Owned
RADDCO S.A. de C.V. corporation Mexico Wholly-Owned
Royal Appliance Luxemborg S. A. H. corporation Luxemborg Wholly-Owned by
Royal Appliance
International Co.
Royal Vacuum Cleaner Co. corporation Ohio Wholly-Owned
-----------------------------------------------------------------------------------------------------------------------------------
79
ANNEX III
DESCRIPTION OF EXISTING INDEBTEDNESS
Aegon USA Realty Advisors, Inc.: Secured Indebtedness as indicated on the most recent balance
sheet, for Tyler Bldg. (shipping); note payable
Syndicated Properties: Secured Indebtedness as indicated on the most recent balance
sheet, for a Capital Lease for Alpha Facility (corporate
headquarters)
State Economic Development
Revenue Bonds (Ohio Enterprise
Bond Fund): Secured Indebtedness as indicated on the most recent balance
sheet, for a Capital Lease of the East 289th facility (assembly)
A receivables financing source which
has been identified to the Lenders Receivables program for the Receivables Subsidiary.
80
ANNEX IV
DESCRIPTION OF EXISTING LIENS
1. Liens on the assets of the Receivables Subsidiary evidencing or securing
the receivables program identified in Annex III.
2. Other Liens described in Annex III.
81
ANNEX V
DESCRIPTION OF EXISTING ADVANCES, LOANS, INVESTMENTS AND GUARANTEES
----none----
82
ANNEX VI
DESCRIPTION OF LETTERS OF CREDIT DEEMED ISSUED UNDER
THE CREDIT AGREEMENT
---none---
83
EXHIBIT A
REVOLVING NOTE
$_______________ Cleveland, Ohio
, 2000
--------------
FOR VALUE RECEIVED, the undersigned ROYAL APPLIANCE MFG. CO., an Ohio
corporation (herein, together with its successors and assigns, the "BORROWER"),
hereby promises to pay to the order of _________________________ (the "LENDER"),
in lawful money of the United States of America in immediately available funds,
at the Payment Office (such term and certain other capitalized terms used herein
without definition shall have the respective meanings ascribed thereto in the
Credit Agreement referred to below) of National City Bank (the "ADMINISTRATIVE
AGENT"), on the Maturity Date, the principal sum of ________________ DOLLARS AND
___ CENTS ($ ) or, if less, the then unpaid principal amount of all Loans made
by the Lender to the Borrower pursuant to the Credit Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount of each Loan made by the Lender to the Borrower in like money at said
office from the date hereof until paid at the rates and at the times provided in
section 2.7 of the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement,
dated as of March 7, 2000, among the Borrower, the financial institutions from
time to time party thereto (including the Lender), and National City Bank, as
Administrative Agent (as from time to time in effect, the "CREDIT AGREEMENT"),
and is entitled to the benefits thereof and of the other Credit Documents. As
provided in the Credit Agreement, this Note is subject to mandatory prepayment
prior to the Maturity Date, in whole or in part.
In case an Event of Default shall occur and be continuing, the
principal of and accrued interest on this Note may be declared to be due and
payable in the manner and with the effect provided in the Credit Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF OHIO.
ROYAL APPLIANCE MFG. CO.
By: ____________________________________
Secretary
84
LOANS AND PAYMENTS OF PRINCIPAL
AMOUNT
OF
DATE AMOUNT TYPE PRINCIPAL UNPAID
OF OF OF INTEREST PAID OR PRINCIPAL MADE
NOTATION LOAN LOAN PERIOD PREPAID BALANCE BY
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
85
EXHIBIT B-1
NOTICE OF BORROWING
[Date]
National City Bank,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
ATTENTION: AGENCY SERVICES
RE: NOTICE OF BORROWING
UNDER CREDIT AGREEMENT
Ladies and Gentlemen:
The undersigned, Royal Appliance Mfg. Co. (the "BORROWER"), refers to
the Credit Agreement, dated as of March 7, 2000 (as amended from time to time,
the "CREDIT AGREEMENT", the terms defined therein being used herein as therein
defined), among the Borrower, the financial institutions from time to time party
thereto (the "LENDERS"), and National City Bank, as Administrative Agent for
such Lenders, and hereby gives you notice, irrevocably, pursuant to section
2.3(a) of the Credit Agreement, that the undersigned hereby requests one or more
Borrowings under the Credit Agreement, and in that connection sets forth in the
schedule attached hereto the information relating to each such Borrowing
(collectively the "PROPOSED BORROWING") as required by section 2.3(a) of the
Credit Agreement.
The Borrower hereby specifies that the Proposed Borrowing will consist
of Loans as indicated in the schedule attached hereto.
The Borrower hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties of the Credit Parties
contained in the Credit Agreement and the other Credit Documents are
and will be true and correct in all material respects, before and after
giving effect to the Proposed Borrowing and to the application of the
proceeds thereof, as though made on such date, except to the extent
that such representations and warranties expressly relate to an earlier
specified date, in which case such representations and warranties shall
have been true and correct in all material respects as of the date when
made; and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.
Very truly yours,
ROYAL APPLIANCE MFG. CO.
By: ____________________________________
Title:
86
BORROWING SCHEDULE
PROPOSED BORROWING #1:
BUSINESS DAY INTEREST PERIOD
OF AGGREGATE AMOUNT IF LOANS ARE
PROPOSED TYPE OF LOANS OF LOANS EURODOLLAR LOANS
BORROWING
-----------------------------------------------------------------------------------------------------------------------------------
Prime Rate Loans One Month
_____, 20____
Eurodollar Loans $____________ Two Months
Three Months
[Circle one
of Above] Six Months
[Circle one of
above]
-----------------------------------------------------------------------------------------------------------------------------------
PROPOSED BORROWING #2:
BUSINESS DAY INTEREST PERIOD
OF AGGREGATE AMOUNT IF LOANS ARE
PROPOSED TYPE OF LOANS OF LOANS EURODOLLAR LOANS
BORROWING
-----------------------------------------------------------------------------------------------------------------------------------
Prime Rate Loans One Month
_____, 20____
Eurodollar Loans $____________ Two Months
Three Months
[Circle one
of Above] Six Months
[Circle one of
above]
-----------------------------------------------------------------------------------------------------------------------------------
87
PROPOSED BORROWING #3:
BUSINESS DAY INTEREST PERIOD
OF AGGREGATE AMOUNT IF LOANS ARE
PROPOSED TYPE OF LOANS OF LOANS EURODOLLAR LOANS
BORROWING
-----------------------------------------------------------------------------------------------------------------------------------
Prime Rate Loans One Month
_____, 20____
Eurodollar Loans $____________ Two Months
Three Months
[Circle one
of Above] Six Months
[Circle one of
above]
-----------------------------------------------------------------------------------------------------------------------------------
PROPOSED BORROWING #4:
BUSINESS DAY INTEREST PERIOD
OF AGGREGATE AMOUNT IF LOANS ARE
PROPOSED TYPE OF LOANS OF LOANS EURODOLLAR LOANS
BORROWING
-----------------------------------------------------------------------------------------------------------------------------------
Prime Rate Loans One Month
_____, 20____
Eurodollar Loans $____________ Two Months
Three Months
[Circle one
of Above] Six Months
[Circle one of
above]
-----------------------------------------------------------------------------------------------------------------------------------
2
88
EXHIBIT B-2
NOTICE OF CONVERSION
[Date]
National City Bank,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
ATTENTION: AGENCY SERVICES
RE: NOTICE OF CONVERSION OF OUTSTANDING
LOANS UNDER CREDIT AGREEMENT
Ladies and Gentlemen:
The undersigned, Royal Appliance Mfg. Co. (the "BORROWER"), refers to
the Credit Agreement, dated as of March 7, 2000 (as amended from time to time,
the "CREDIT AGREEMENT", the terms defined therein being used herein as therein
defined), among the Borrower, the financial institutions from time to time party
thereto (the "LENDERS"), and National City Bank, as Administrative Agent for
such Lenders, and hereby gives you notice, irrevocably, pursuant to section 2.6
of the Credit Agreement, that the undersigned hereby requests one or more
Conversions of Loans of one Type into Loans of another Type, pursuant to section
2.6 of the Credit Agreement, and in that connection sets forth in the schedule
attached hereto the information relating to each such Conversion.
Very truly yours,
ROYAL APPLIANCE MFG. CO.
By: ____________________________________
Title:
89
CONVERSION SCHEDULE
PROPOSED CONVERSION #1
[OF THE LOANS DESCRIBED IN THE FIRST TABLE BELOW
INTO LOANS DESCRIBED IN THE SECOND TABLE BELOW]
DATE AGGREGATE AMOUNT INTEREST PERIOD
OF TYPE OF LOANS OF LOANS IF LOANS ARE
LOANS EURODOLLAR LOANS
-----------------------------------------------------------------------------------------------------------------------------------
Prime Rate Loans One Month
_____, 20__
Eurodollar Loans $_________ Two Months
[Circle One of Three Months
Above]
Six Months
[Circle one of
above]
-----------------------------------------------------------------------------------------------------------------------------------
DATE AGGREGATE AMOUNT INTEREST PERIOD
OF TYPE OF LOANS OF LOANS IF LOANS ARE
LOANS EURODOLLAR LOANS
-----------------------------------------------------------------------------------------------------------------------------------
Prime Rate Loans One Month
_____, 20__
Eurodollar Loans $_________ Two Months
[Circle One of Three Months
Above]
Six Months
[Circle one of
above]
-----------------------------------------------------------------------------------------------------------------------------------
90
PROPOSED CONVERSION #2
[OF THE LOANS DESCRIBED IN THE FIRST TABLE BELOW
INTO LOANS DESCRIBED IN THE SECOND TABLE BELOW]
DATE AGGREGATE AMOUNT INTEREST PERIOD
OF TYPE OF LOANS OF LOANS IF LOANS ARE
LOANS EURODOLLAR LOANS
-----------------------------------------------------------------------------------------------------------------------------------
Prime Rate Loans One Month
_____, 20__
Eurodollar Loans $_________ Two Months
[Circle One of Three Months
Above]
Six Months
[Circle one of
above]
-----------------------------------------------------------------------------------------------------------------------------------
DATE AGGREGATE AMOUNT INTEREST PERIOD
OF TYPE OF LOANS OF LOANS IF LOANS ARE
LOANS EURODOLLAR LOANS
-----------------------------------------------------------------------------------------------------------------------------------
Prime Rate Loans One Month
_____, 20__
Eurodollar Loans $_________ Two Months
[Circle One of Three Months
Above]
Six Months
[Circle one of
above]
-----------------------------------------------------------------------------------------------------------------------------------
2
91
EXHIBIT B-3
LETTER OF CREDIT REQUEST
No. ______________(1)
Dated __________(2)
National City Bank,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
ATTENTION: METRO/OHIO DIVISION AND INTERNATIONAL DIVISION
RE: LETTER OF CREDIT REQUEST UNDER CREDIT AGREEMENT,
DATED AS OF MARCH 7, 2000, TO WHICH
ROYAL APPLIANCE MFG. CO. IS A PARTY
Ladies and Gentlemen:
The undersigned, Royal Appliance Mfg. Co. (the "BORROWER"), refers to
the Credit Agreement, dated as of March 7, 2000 (as amended, modified or
supplemented from time to time, the "CREDIT AGREEMENT", the capitalized terms
defined therein being used herein as therein defined), among the Borrower, the
financial institutions from time to time party thereto (the "LENDERS"), and
National City Bank, as Administrative Agent for such Lenders.
The Borrower hereby requests that _____________, as a Letter of Credit
Issuer, issue a Letter of Credit on _____________, 20__ (the "DATE OF
ISSUANCE") in the aggregate amount of [U.S.$__________ ] [amount in specified
Alternative Currency], for the account of ____________________.
The beneficiary of the requested Letter of Credit will be _________,(3)
and such Letter of Credit will be in support of ______________(4) and will have
a stated termination date of _______________.(5)
The Borrower hereby certifies that the following statements are true on
the date hereof, and will be true on the Date of Issuance:
(A) the representations and warranties of the Credit Parties
contained in the Credit Agreement and the other Credit Documents are
and will be true and correct in all material respects, before and after
giving effect to the issuance of the Letter of Credit requested hereby,
as though made on the Date of Issuance, except to the extent that such
representations and warranties expressly relate to an earlier specified
date, in which case
--------------------
(1) Letter of Request Number.
(2) Date of Letter of Request (at least three Business Days prior to the Date
of Issuance or such lesser number as may be agreed by the relevant Letter
of Credit Issuer).
(3) Insert name and address of beneficiary.
(4) Insert description of the supported obligations, name of agreement and/or
the commercial transaction to which this Letter of Credit Request relates.
(5) Insert last date upon which drafts may be presented (which may not be
beyond the 15th Business Day next preceding the Maturity Date).
92
such representations and warranties shall have been true and correct
in all material respects as of the date when made; and
(B) no Default or Event of Default has occurred and is
continuing, or would result after giving effect to the issuance of the
Letter of Credit requested hereby.
Copies of all documentation with respect to the supported transaction
are attached hereto.
Very truly yours,
ROYAL APPLIANCE MFG. CO.
By: ____________________________________
Title:
2
93
EXHIBIT C-1
----------------------------
FORM OF
SECURITY AGREEMENT
----------------------------
94
EXHIBIT C-2
----------------------------
FORM OF
COLLATERAL ASSIGNMENT OF PATENTS
----------------------------
95
EXHIBIT C-3
----------------------------
FORM OF
COLLATERAL ASSIGNMENT OF TRADEMARKS
----------------------------
96
EXHIBIT C-4
----------------------------
FORM OF
PLEDGE AGREEMENT
----------------------------
97
EXHIBIT D
----------------------------
FORM OF
SUBSIDIARY GUARANTY
----------------------------
98
EXHIBIT E
FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
March 8, 2000
To each of the Lenders and the
Administrative Agent
named in the Credit Agreement
referred to below
c/o National City Bank
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Metro/Ohio Division
RE: LOANS FROM NATIONAL CITY BANK ("NCB"), AND THE LENDERS REFERRED
TO IN THE CREDIT AGREEMENT, EFFECTIVE AS OF MARCH 7, 2000, IN THE
PRINCIPAL AMOUNT OF UP TO $80,000,000 (THE "LOANS") TO
ROYAL APPLIANCE MFG. CO., AN OHIO CORPORATION (THE "COMPANY").
Gentlemen:
We have acted as counsel to the Company in connection with the Loans
and have been requested to render our opinion respecting certain matters in
connection therewith. We have reviewed originals or copies of the following (the
"DOCUMENTS") (capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement):
1. Articles of Incorporation of the Company filed with the Ohio
Secretary of State on November 12, 1981 and Certificates of Amendment to
Articles of Incorporation of the Borrower filed with the Ohio Secretary of State
on December 11, 1981, December 11, 1986, June 13, 1988, June 11, 1990, August 7,
1991, May 4, 1992, and October 29, 1993 (collectively, the "ARTICLES OF
INCORPORATION");
2. Code of Regulations of the Company adopted by its shareholders on
November 13, 1981 and amended on July 28, 1989, and amended and restated on
August 7, 1991 and on May 4, 1992 (the "CODE OF REGULATIONS");
3. Resolutions of the Board of Directors of the Company adopted at a
meeting held on February 14, 2000, as certified by the secretary of the
Borrower;
4. Certificate of Good Standing for the Company from the Ohio Secretary
of State dated February 24, 2000;
5. Credit Agreement, dated as of March 7, 2000, among the Borrower and
the Lenders (the "CREDIT AGREEMENT");
6. Security Agreement, dated as of March 7, 2000, made by the Company
and certain of its Subsidiaries to NCB, in its capacity as Collateral Agent
under the Credit Agreement (the "SECURITY AGREEMENT");
7. Collateral Assignment of Patents and Security Agreement, dated as of
March 7, 2000, among the Company in favor of NCB, in its capacity as Collateral
Agent (the "PATENT ASSIGNMENT");
99
8. Collateral Assignment of Trademarks and Security Agreement, dated as
of March 7, 2000, among the Company in favor of NCB, in its capacity as
Collateral Agent (the "TRADEMARK ASSIGNMENT");
9. Pledge Agreement, dated as of March 7, 2000, among the Company in
favor of NCB, in its capacity as Collateral Agent (the "PLEDGE AGREEMENT");
10. Subsidiary Guaranty dated as of March 7, 2000 by the subsidiaries
of the Company named therein in favor of NCB, in its capacity as Collateral
Agent (the "SUBSIDIARY GUARANTY");
11. Revolving Notes of the Company in the aggregate face amount of
$80,000,000 issued to the Lenders as of March 7, 2000 pursuant to the Credit
Agreement;
12. Certificate of Fact from the Company to Kahn, Kleinman, Xxxxxxxx &
Xxxxxx Co., L.P.A., a copy of which is attached hereto and incorporated herein
by reference (the "CERTIFICATE").
Documents numbered 5 through 11 above are hereinafter collectively
referred to as the "LOAN DOCUMENTS".
Based on our review of the Documents and upon an investigation of such
questions of law as we have deemed necessary to enable us to render this
opinion, and assuming the accuracy of the Certificate, we are of the opinion
that:
1. The Company is a duly formed and validly existing Ohio corporation
in good standing as a domestic corporation under the laws of the State of Ohio.
2. To the best of our knowledge, based solely on the Certificate (and
without investigation, we are not aware that the Certificate is not true): (i)
Annex II to the Credit Agreement sets forth the name of each of Company's
subsidiaries and the jurisdiction in which each such subsidiary is incorporated;
and (ii) all of the issued and outstanding stock of each subsidiary set forth in
Annex II to the Credit Agreement is owned (directly or indirectly) by the
Company, free from any security interest, option, equity or other right of any
kind, except to the extent, if any, set forth in Annex II to the Credit
Agreement.
3. The Company has the requisite corporate power and authority to enter
into the Loan Documents to which it is a party and to perform its obligations
thereunder. The officers of the Company who have executed and delivered the Loan
Documents to which the Company is a party on behalf of the Company have been
duly authorized to do so. The Loan Documents to which the Company is a party are
valid and enforceable against the Company in accordance with their respective
terms.
4. To the best of our knowledge, based solely on the Certificate (and
without investigation, we are not aware that the Certificate is not true), no
order, consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any foreign or domestic
governmental or public body or authority, or any subdivision thereof, is
required to authorize or is required as a condition to: (i) the execution,
delivery and performance by the Company of any of the Loan Documents to which it
is a party, or (ii) the legality, validity, binding effect or enforceability of
any Loan Document to which the Company is a party, except the filing and
recording of financing statements and other documents necessary in order to
perfect the Liens created by the Loan Documents.
5. Neither the Company's execution, delivery and performance of the
Loan Documents to which it is a party nor compliance with the terms and
provisions thereof: (i) will, to the best of our knowledge, contravene any
provision of any law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality applicable to the Company or
its properties and assets, (ii) will, to the best of our knowledge, conflict
with or result in any breach of any of the terms, covenants, conditions or
provisions of , or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Company (other than the Liens provided for in the Loan
Documents) pursuant to the terms of any promissory note, bond, debenture,
indenture, mortgage, deed of trust, credit or loan agreement, or any other
material agreement or other instrument to which the Company is a party or by
which it or any of its property or assets are bound or to which it may be
subject, or (iii) will violate any provision of the Articles of Incorporation or
Code of Regulations of the Company.
2
100
6. To the best of our knowledge, based solely on the Certificate (and
without investigation we are not aware that the Certificate is not true), there
are no actions, suits or proceedings pending or threatened with respect to the
Company or any of its Subsidiaries: (i) that individually or in the aggregate
have, or are reasonably likely to have, a Material Adverse Effect, or (ii) which
question the validity or enforceability of any of the Loan Documents, or of any
action to be taken by the Company pursuant to the Loan Documents.
7. The Borrower is not subject to regulation with respect to the
creation or incurrence of indebtedness under the Investment Company Act of 1940,
as amended, the Interstate Commerce Act, as amended, the Federal Power Act, as
amended, the Public Utility Holding Company Act of 1935, as amended or any
applicable state public utility law.
This opinion is subject to the assumptions, exceptions and
qualifications which follow.
In rendering this opinion, we have assumed: (1) the genuineness of all
signatures on documents and instruments other than those executed by the
Company; (2) the due delivery of all documents and instruments other than those
delivered by the Company; (3) the legal capacity of all natural persons
executing documents and instruments; (4) the due authorization of all parties
executing documents and instruments, other than the Company, and that such
documents and instruments constitute the legal, valid and binding undertaking of
each such other party enforceable against each such other party in accordance
with their respective terms; (5) the authenticity of original documents and the
conformity of photostatic copies; (6) the Lenders and the Administrative Agent
will enforce their rights under the Loan Documents in a commercially reasonable
manner, consistent with good faith and fair dealing; and (7) no facts or
circumstances exist, including, without limitation, fraud or duress in the
transaction giving rise to the execution, acknowledgment and delivery of the
Loan Documents which would impair the enforceability of the Loan Documents.
This opinion is qualified to the extent that the binding effect and
enforceability of the agreements and instruments referred to above are subject
to: (1) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws in effect from time to time affecting the rights of creditors
generally; (2) application of general principles of equity; and (3) limitations
upon certain of the remedies provided for in the Loan Documents, but in our
opinion adequate remedies are available under applicable law for the practical
realization of the benefits and security purported to be provided by the Loan
Documents. This opinion is further qualified to the extent that the binding
effect and enforceability of the agreements and instruments referred to above
are assumed to be governed by the choice of law chosen by the parties thereto,
and that a court of competent jurisdiction will apply either the laws of the
State of Ohio or the Federal law of the United States of America.
We specifically note, and exclude from the scope of our opinion, any
opinion as to: (1) the validity or enforceability of any provisions in the Loan
Documents that the rights and remedies available to the Administrative Agent or
the Lenders thereunder are not exclusive, that every right or remedy is
cumulative and may be exercised in addition to or with any other remedy, or that
the election of some particular remedy or remedies does not preclude recourse to
one or more other remedies; and (2) the effect of any determination that the
foregoing provisions are unenforceable.
Our opinions concerning enforceability of the Loan Documents are
subject to the qualification that the availability of the remedy of specific
performance, or injunctive relief, or of any other equitable remedy, is subject
to the discretion of the court before which any proceedings therefore may be
brought.
This opinion is limited to the present laws of the State of Ohio and
the Federal laws of the United States of America, to present judicial
interpretations thereof, and to the facts as they presently exist. In rendering
this opinion, we assume no obligation to revise or supplement this opinion
should the present laws of any jurisdiction mentioned above be changed by
legislative action, judicial decision, or otherwise or should the facts as they
presently exist change.
Notwithstanding anything in the foregoing to the contrary, we express
no opinion whatsoever with respect to the enforcement of: (1) obligations for
the payment of attorneys' fees under any of the foregoing documents in
connection with the enforcement of any obligations thereunder; (2) increased
rates of interest or other charges payable upon default; (3) increased rates of
interest or other charges payable with respect to advances made for payment of
delinquent taxes or comparable items; (4) any "self-help" remedies exercised by
the Administrative Agent or one or more Lenders; (5) any EX PARTE judicial
proceedings brought by the Administrative Agent or one or more Lenders; (6)
waiver of any common law or statutory rights; (7) provisions permitting the
Administrative Agent or any Lender to act as attorney-in-fact for the
3
101
Company or any other person; and (8) provisions as to nonculpability for actions
taken by or on behalf of the Administrative Agent or any Lender.
The opinions expressed herein are qualified to the extent that the
validity, binding nature, and enforceability against Borrower of the Loan
Documents may be limited or otherwise affected by the unenforceability under
certain circumstances of provisions indemnifying or prospectively releasing a
party against liability for its own wrongful or negligent acts.
We express no opinion respecting compliance with, or the applicability
of, any state or federal securities or banking laws, rules, or regulations to
the transactions contemplated by the Loan Documents.
We express no opinion as to the title to, or ownership of, the personal
property contemplated as security by any of the Loan Documents, or the status of
any liens or encumbrances thereon, or the priority or perfection of the liens
and encumbrances which have been or may hereafter arise or be created pursuant
to the Loan Documents or any financing statements heretofore or hereafter
executed by the Company or any other person, or the accuracy or sufficiency of
the description of any property or the freedom of any property from any liens
and encumbrances.
References to our "knowledge" or "aware" mean the actual knowledge or
actual awareness of Xxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxx, the attorneys in
this firm who are directly involved in the representation of Borrower in
connection with the Loan.
We wish to advise you that certain attorneys in our Firm are
shareholders of Borrower.
We bring to your attention the fact that this letter and the opinions
set forth herein are expressions of professional judgment and are not a guaranty
of result.
The opinions contained herein are limited to those matters expressly
covered by Paragraphs 1 through 7 above; no opinion is to be implied with
respect to any other matter.
The opinions expressed herein are expressed solely to the
Administrative Agent and the Lenders named in the Credit Agreement, each of
which may rely hereon, and this opinion shall not be deemed to be extended to
any other person, firm or entity without the express prior written consent of
this Firm.
Very truly yours,
KAHN, KLEINMAN, XXXXXXXX & XXXXXX CO., L.P.A.
4
102
CERTIFICATE OF FACT
The undersigned, Royal Appliance Mfg. Co. (the "COMPANY"), in order to
induce Kahn, Kleinman, Xxxxxxxx & Xxxxxx Co., L.P.A. to issue its Opinion Letter
(the "OPINION") in connection with the loan transaction contemplated by the
Credit Agreement (the "CREDIT AGREEMENT") between the Borrower and National City
Bank, Administrative Agent for the Lenders, represents, warrants and covenants
that:
1. The Articles of Incorporation of the Company filed with the Ohio
Secretary of State on November 12, 1981 and Certificates of Amendment to
Articles of Incorporation filed with the Ohio Secretary of State on December 11,
1981, December 18, 1986, June 13, 1988, June 11, 1990, August 7, 1991 and May 4,
1992 have not been further amended, modified or superseded and remain in full
force.
2. The Code of Regulations of the Company, adopted by its shareholders
on November 13, 1981 and amended on July 28, 1989 and further amended on May 4,
1992, has not been further amended, modified or superseded and remains in full
force.
3. The authorizing resolutions adopted at a meeting of the Board of
Directors of the Company held on February 14, 2000 have not been amended,
modified or superseded and remain in full force.
4. Annex II to the Credit Agreement contains a true and complete list
of each of the Company's domestic and foreign subsidiaries, all of the issued
and outstanding capital stock of which is owned by the Company free and clear of
any security interest, option, equity or other right of any kind except to the
extent, if any, set forth in said Annex II.
5. No order, consent, approval, license, authorization, or validation
of or filing, recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required as a condition to (i) the execution,
delivery and performance by the Company of any Loan Documents to which it is a
party, or (ii) the legality, validity, binding effect or enforceability of any
Loan Document.
6. Neither the Company's execution, delivery and performance by the
Company of the Loan Documents to which it is a party nor compliance with the
terms and provisions thereof (i) will contravene any provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality applicable to the Company or its properties and
assets, or (ii) will conflict with or result in any breach of the terms,
covenants, conditions or provisions of, or constitute a default under or result
in the creation or imposition of (or the obligation to create or impose) any
Lien upon any of the property or assets of the Company (other than the Liens
provided for in the Loan Documents) pursuant to the terms of any promissory
note, bond, debenture, indenture, mortgage, deed of trust, credit or loan
agreement, or any other material agreement or other instrument to which the
Company is a party or by which it or any of its property or assets are bound or
to which it may be subject.
7. There are no actions, suits or proceedings pending or threatened
with respect to the Company or any of its Subsidiaries (i) that individually or
in the aggregate have, or are reasonably likely to have, a Material Adverse
Effect, or (ii) which question the validity or enforceability of any of the Loan
Documents, or of any action to be taken by the Company pursuant to the Loan
Documents.
8. The Company is not subject to regulation with respect to the
creation or incurrence of indebtedness under the Investment Company Act of 1940,
as amended, the Interstate Commerce Act, as amended, the Federal Power Act, as
amended, the Public Utility Holding Company Act of 1935, as amended or any
applicable state public utility law.
Terms not otherwise defined herein shall have the same meaning as in
the Opinion.
103
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Fact as of the date of the Opinion.
ROYAL APPLIANCE MFG. CO.
By:_________________________________
Xxxxxxx Xxxxx, Secretary
2
104
EXHIBIT F
----------------------------
FORM OF
ASSIGNMENT AGREEMENT
----------------------------
105
ASSIGNMENT AGREEMENT
DATE:_____________
Reference is made to the Credit Agreement described in Item 2 of Annex
I annexed hereto (as such Credit Agreement may hereafter be amended, modified or
supplemented from time to time, the "CREDIT AGREEMENT"). Unless defined in Annex
I attached hereto, terms defined in the Credit Agreement are used herein as
therein defined.
_____________ (the "ASSIGNOR") and ______________ (the "ASSIGNEE")
hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I (the "ASSIGNED SHARE") of all of
Assignor's outstanding rights and obligations under the Credit Agreement
indicated in Item 4 of Annex I, including, without limitation, all rights and
obligations with respect to the Assigned Share of the Assignor's Commitment and
of the Loans, Unpaid Drawings and the Notes held by the Assignor. After giving
effect to such sale and assignment, the Assignee's Commitment will be as set
forth in Item 4 of Annex I.
2. The Assignor (i) represents and warrants that it is duly authorized
to enter into and perform the terms of this Assignment Agreement, that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any liens or security interests; (ii)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or the other
Credit Documents or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly authorized
to enter into and perform the terms of this Assignment Agreement; (ii) confirms
that it has received a copy of the Credit Agreement and the other Credit
Documents, together with copies of the financial statements referred to therein
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment Agreement;
(iii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iv) appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Credit Documents as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; [and] (v) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Credit Agreement
are required to be performed by it as a Lender[; and (vi) to the extent legally
entitled to do so, attaches the forms described in section 5.4(b)(ii) of the
Credit Agreement(6).
4. Following the execution of this Assignment Agreement by the Assignor
and the Assignee, an executed original hereof (together with all attachments)
will be delivered to the Administrative Agent. The effective date of this
Assignment Agreement shall be the date of execution hereof by the Assignor, the
Assignee and the consent hereof by the Administrative Agent and the receipt by
the Administrative Agent of the administrative fee referred to in section
12.4(c) of the Credit Agreement, unless otherwise specified in Item 5 of Annex I
hereto (the "SETTLEMENT DATE").
(6) If the Assignee is organized under the laws of a jurisdiction outside the
United States.
106
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
Agreement, have the rights and obligations of a Lender thereunder and under the
other Credit Documents and (ii) the Assignor shall, to the extent provided in
this Assignment Agreement, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Credit Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee shall
be entitled to (x) all interest on the Assigned Share of the Loans at the rates
specified in Item 6 of Annex I, (y) all Commitment Fees (if applicable) on the
Assigned Share of the Commitment at the rate specified in Item 7 of Annex I, and
(z) all Letter of Credit Fees (if applicable) on the Assignee's participation in
all Letters of Credit at the rate specified in Item 8 of Annex I hereto, which,
in each case, accrue on and after the Settlement Date, such interest and, if
applicable, Commitment Fees and Letter of Credit Fees, to be paid by the
Administrative Agent, upon receipt thereof from the Borrower, directly to the
Assignee. It is further agreed that all payments of principal made by the
Borrower on the Assigned Share of the Loans which occur on and after the
Settlement Date will be paid directly by the Administrative Agent to the
Assignee. Upon the Settlement Date, the Assignee shall pay to the Assignor an
amount specified by the Assignor in writing which represents the Assigned Share
of the principal amount of the respective Loans made by the Assignor pursuant to
the Credit Agreement which are outstanding on the Settlement Date, net of any
closing costs, and which are being assigned hereunder. The Assignor and the
Assignee shall make all appropriate adjustments in payments under the Credit
Agreement for periods prior to the Settlement Date directly between themselves
on the Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By:_________________________________ By:_________________________________
Title: Title:
Acknowledged and Agreed:
NATIONAL CITY BANK,
as Administrative Agent
By: ________________________
Vice President
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107
ANNEX I
FOR
ASSIGNMENT AND ASSUMPTION AGREEMENT
1. The Borrower: ROYAL APPLIANCE MFG. CO.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of March 7, 2000, among Royal
Appliance Mfg. Co., the Lenders from time to time party thereto,
and National City Bank, as Administrative Agent.
3. Date of Assignment Agreement:
--------- ---, -----
4. Amounts (as of date of item #3 above):
LOANS COMMITMENTS
Aggregate Amount for $_____ $_____
all Lenders
Assigned Share _____% _____%
Amount of Assigned Share $_____ $_____
Amount Retained by Assignor $_____ $_____
5. Settlement Date:
--------- ---, ---
The administrative fee referred to in section 12.2(c) of the
Credit Agreement:
[ ] is payable by the Assignee
[ ] is waived by the Administrative Agent
[ ] is payable by _____% by the Assignee and ___% by
the Assignor
6. Rate of Interest
to the Assignee: As set forth in section 2.7 of the Credit Agreement
(unless otherwise agreed to by the Assignor and the
Assignee).(7)
_________________
(7) The Borrower and the Administrative Agent shall direct the entire amount of
the interest to the Assignee at the rate set forth in section 2.7 of the
Credit Agreement, with the Assignor and Assignee effecting any agreed upon
sharing of interest through payments by the Assignee to the Assignor.
108
7. Commitment
Fee: As set forth in section 4.1(a) of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee).(8)
8. Letter of
Credit Fees: As set forth in section 4.1(b) of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee).(9)
9. Notices:
-------------------------------------------------------------------------------
ASSIGNOR: ASSIGNEE:
Attention: Attention:
Telephone: Telephone:
Facsimile: Facsimile:
-------------------------------------------------------------------------------
10. Payment Instructions:
-------------------------------------------------------------------------------
ASSIGNOR: ASSIGNEE:
ABA No. ABA No.
Attention: Attention:
Telephone: Telephone:
Facsimile: Facsimile:
Ref.: Royal Appliance Mfg. Co. Ref.: Royal Appliance Mfg. Co.
-------------------------------------------------------------------------------
------------
(8) The Borrower and the Administrative Agent shall direct the entire amount of
the Commitment Fee to the Assignee at the rate set forth in section 4.1(a)
of the Credit Agreement, with the Assignor and the Assignee effecting any
agreed upon sharing of Commitment Fee through payment by the Assignee to
the Assignor.
(9) The Borrower and the Administrative Agent shall direct the entire amount of
the Letter of Credit Fees to the Assignee at the rate set forth in section
4.1(b) of the Credit Agreement, with the Assignor and the Assignee
effecting any agreed upon sharing of the Letter of Credit Fees through
payment by the Assignee to the Assignor.
2
109
EXHIBIT G
SECTION 5.4(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of March 7,
2000, among Royal Appliance Mfg. Co., the financial institutions party thereto
from time to time, and National City Bank, as Administrative Agent (the "CREDIT
AGREEMENT"). Pursuant to the provisions of section 5.4(b)(ii) of the Credit
Agreement, the undersigned hereby certifies that it is not a "bank" as such term
is used in section 881(c)(3)(A) of the Internal Revenue Code of 1986, as
amended.
[NAME OF LENDER]
By:_________________________________
Title:
Dated:__________
110
================================================================================
CREDIT AGREEMENT
DATED AS OF
MARCH 7, 2000
AMONG
ROYAL APPLIANCE MFG. CO.
AS BORROWER
THE LENDING INSTITUTIONS NAMED THEREIN
AS LENDERS
NATIONAL CITY BANK
AS ADMINISTRATIVE AGENT
================================================================================
================================================================================
111
TABLE OF CONTENTS
PAGE
----
SECTION 1. DEFINITIONS AND TERMS.........................................1
1.1. CERTAIN DEFINED TERMS.........................................1
1.2. COMPUTATION OF TIME PERIODS..................................16
1.3. ACCOUNTING TERMS.............................................17
1.4. TERMS GENERALLY..............................................17
1.5. CURRENCY EQUIVALENTS.........................................17
SECTION 2. AMOUNT AND TERMS OF LOANS....................................17
2.1. COMMITMENTS FOR LOANS........................................17
2.2. MINIMUM BORROWING AMOUNTS, ETC.; PRO RATA BORROWINGS.........18
2.3. NOTICE OF BORROWING..........................................18
2.4. DISBURSEMENT OF FUNDS........................................18
2.5. NOTES AND LOAN ACCOUNTS......................................19
2.6. CONVERSIONS..................................................20
2.7. INTEREST.....................................................20
2.8. SELECTION AND CONTINUATION OF INTEREST PERIODS...............22
2.9. INCREASED COSTS, ILLEGALITY, ETC.............................23
2.10. BREAKAGE COMPENSATION........................................25
2.11. CHANGE OF LENDING OFFICE; REPLACEMENT OF LENDERS.............25
SECTION 3. LETTERS OF CREDIT............................................25
3.1. LETTERS OF CREDIT............................................25
3.2. LETTER OF CREDIT REQUESTS: NOTICES OF ISSUANCE...............26
3.3. AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS.................27
3.4. LETTER OF CREDIT PARTICIPATIONS..............................27
3.5. INCREASED COSTS..............................................29
3.6. GUARANTY OF SUBSIDIARY LETTER OF CREDIT OBLIGATIONS..........29
SECTION 4. FEES; COMMITMENTS............................................31
4.1. FEES.........................................................31
4.2. VOLUNTARY TERMINATION/REDUCTION OF COMMITMENTS...............32
4.3. MANDATORY TERMINATION/REDUCTION OF COMMITMENTS, ETC..........33
SECTION 5. PAYMENTS.....................................................33
5.1. VOLUNTARY PREPAYMENTS........................................33
5.2. MANDATORY PREPAYMENTS........................................34
5.3. METHOD AND PLACE OF PAYMENT..................................36
5.4. NET PAYMENTS.................................................36
SECTION 6. CONDITIONS PRECEDENT.........................................37
6.1. CONDITIONS PRECEDENT AT CLOSING DATE.........................37
6.2. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS....................39
SECTION 7. REPRESENTATIONS AND WARRANTIES...............................39
7.1. CORPORATE STATUS, ETC........................................39
7.2. SUBSIDIARIES.................................................39
7.3. CORPORATE POWER AND AUTHORITY, ETC...........................39
7.4. NO VIOLATION.................................................40
7.5. GOVERNMENTAL APPROVALS.......................................40
7.6. LITIGATION...................................................40
7.7. USE OF PROCEEDS; MARGIN REGULATIONS..........................40
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7.8. FINANCIAL STATEMENTS, ETC....................................40
7.9. NO MATERIAL ADVERSE CHANGE...................................41
7.10. TAX RETURNS AND PAYMENTS.....................................41
7.11. TITLE TO PROPERTIES, ETC.....................................42
7.12. LAWFUL OPERATIONS, ETC.......................................42
7.13. ENVIRONMENTAL MATTERS........................................42
7.14. COMPLIANCE WITH ERISA........................................42
7.15. INTELLECTUAL PROPERTY, ETC...................................43
7.16. INVESTMENT COMPANY...........................................43
7.17. BURDENSOME CONTRACTS; LABOR RELATIONS........................43
7.18. EXISTING INDEBTEDNESS........................................43
7.19. YEAR 2000 COMPUTER MATTERS...................................43
7.20. SECURITY INTERESTS...........................................44
7.21. TRUE AND COMPLETE DISCLOSURE.................................44
SECTION 8. AFFIRMATIVE COVENANTS........................................44
8.1. REPORTING REQUIREMENTS.......................................44
8.2. BOOKS, RECORDS AND INSPECTIONS...............................47
8.3. INSURANCE....................................................47
8.4. PAYMENT OF TAXES AND CLAIMS..................................48
8.5. CORPORATE FRANCHISES.........................................48
8.6. GOOD REPAIR..................................................48
8.7. COMPLIANCE WITH STATUTES, ETC................................48
8.8. COMPLIANCE WITH ENVIRONMENTAL LAWS...........................48
8.9. FISCAL YEARS, FISCAL QUARTERS................................49
8.10. HEDGE AGREEMENTS, ETC........................................50
8.11. CERTAIN SUBSIDIARIES TO JOIN IN SUBSIDIARY GUARANTY..........50
8.12. ADDITIONAL SECURITY; FURTHER ASSURANCES......................50
8.13. CASUALTY AND CONDEMNATION....................................52
8.14. LANDLORD/MORTGAGEE WAIVERS; BAILEE LETTERS...................53
8.15. SENIOR DEBT..................................................53
SECTION 9. NEGATIVE COVENANTS...........................................53
9.1. CHANGES IN BUSINESS..........................................53
9.2. CONSOLIDATION, MERGER, ACQUISITIONS, SALE OF
ASSETS, ETC..................................................53
9.3. LIENS........................................................54
9.4. INDEBTEDNESS.................................................55
9.5. ADVANCES, INVESTMENTS, LOANS AND GUARANTY OBLIGATIONS........56
9.6. DIVIDENDS, ETC...............................................57
9.7. CONSOLIDATED TOTAL ADJUSTED DEBT/CONSOLIDATED EBITDA
RATIO........................................................58
9.8. FIXED CHARGE COVERAGE RATIO..................................58
9.9. MINIMUM CONSOLIDATED NET WORTH...............................58
9.10. CONSOLIDATED CAPITAL EXPENDITURES............................58
9.11. TRANSACTIONS WITH AFFILIATES.................................59
9.12. PREPAYMENTS AND REFINANCINGS OF OTHER DEBT, ETC..............59
9.13. LIMITATION ON CERTAIN RESTRICTIVE AGREEMENTS.................59
9.14. PLAN TERMINATIONS, MINIMUM FUNDING, ETC......................60
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SECTION 10. EVENTS OF DEFAULT............................................60
10.1. EVENTS OF DEFAULT............................................60
10.2. ACCELERATION, ETC............................................62
10.3. APPLICATION OF LIQUIDATION PROCEEDS..........................62
SECTION 11. THE ADMINISTRATIVE AGENT.....................................63
11.1. APPOINTMENT..................................................63
11.2. DELEGATION OF DUTIES.........................................63
11.3. EXCULPATORY PROVISIONS.......................................63
11.4. RELIANCE BY ADMINISTRATIVE AGENT.............................64
11.5. NOTICE OF DEFAULT............................................64
11.6. NON-RELIANCE.................................................64
11.7. INDEMNIFICATION..............................................64
11.8. THE ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY..............65
11.9. SUCCESSOR ADMINISTRATIVE AGENT...............................65
11.10. OTHER AGENTS.................................................65
SECTION 12. MISCELLANEOUS................................................65
12.1. PAYMENT OF EXPENSES ETC......................................65
12.2. RIGHT OF SETOFF..............................................67
12.3. NOTICES......................................................67
12.4. BENEFIT OF AGREEMENT.........................................67
12.5. NO WAIVER: REMEDIES CUMULATIVE...............................69
12.6. PAYMENTS PRO RATA............................................70
12.7. CALCULATIONS: COMPUTATIONS...................................70
12.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL.........................................70
12.9. COUNTERPARTS.................................................71
12.10. EFFECTIVENESS; INTEGRATION...................................71
12.11. HEADINGS DESCRIPTIVE.........................................71
12.12. AMENDMENT OR WAIVER..........................................71
12.13. SURVIVAL OF INDEMNITIES......................................72
12.14. DOMICILE OF LOANS............................................72
12.15. CONFIDENTIALITY..............................................73
12.16. LENDER REGISTER..............................................73
12.17. LIMITATIONS ON LIABILITY OF THE LETTER OF CREDIT
ISSUERS......................................................74
12.18. GENERAL LIMITATION OF LIABILITY..............................74
12.19. NO DUTY......................................................74
12.20. LENDERS AND AGENT NOT FIDUCIARY TO BORROWER, ETC.............74
12.21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES...................74
12.22. SEVERABILITY.................................................75
12.23. INDEPENDENCE OF COVENANTS....................................75
12.24. NO RELIANCE ON MARGIN STOCK..................................75
12.25. INTEREST RATE LIMITATION.....................................75
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ANNEX I - INFORMATION AS TO LENDERS
ANNEX II - INFORMATION AS TO SUBSIDIARIES
ANNEX III - DESCRIPTION OF EXISTING INDEBTEDNESS
ANNEX IV - DESCRIPTION OF EXISTING LIENS
ANNEX V - DESCRIPTION OF EXISTING ADVANCES, LOANS,
INVESTMENTS AND GUARANTEES
ANNEX VI - DESCRIPTION OF LETTERS OF CREDIT DEEMED ISSUED UNDER
THE CREDIT AGREEMENT
EXHIBIT A - FORM OF NOTE
EXHIBIT B-1 - FORM OF NOTICE OF BORROWING
EXHIBIT B-2 - FORM OF NOTICE OF CONVERSION
EXHIBIT B-3 - FORM OF LETTER OF CREDIT REQUEST
EXHIBIT C-1 - FORM OF SECURITY AGREEMENT
EXHIBIT C-2 - FORM OF COLLATERAL ASSIGNMENT OF PATENTS
EXHIBIT C-3 - FORM OF COLLATERAL ASSIGNMENT OF TRADEMARKS
EXHIBIT C-4 - FORM OF PLEDGE AGREEMENT
EXHIBIT D - FORM OF SUBSIDIARY GUARANTY
EXHIBIT E - FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
EXHIBIT F - FORM OF ASSIGNMENT AGREEMENT
EXHIBIT G - FORM OF SECTION 5.4(b)(ii) CERTIFICATE
