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EXHIBIT 10.40
EXECUTION COPY
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$80,000,000
MULTICURRENCY CREDIT AGREEMENT
DATED AS OF JUNE 30, 1995
AMONG
SCHAWK, INC.,
FILTERTEK USA, INC.,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS AGENT,
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Interpretive Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1.3 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1.4 Currency Equivalents Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE II
THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.2 Loan Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.3 Procedure for Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.4 Conversion and Continuation Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.5 Utilization of Revolving Commitments in Offshore Currencies. . . . . . . . . . . . . . . . . . . . . 27
2.6 Reduction of Commitments; Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Scheduled Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(b) Voluntary Reductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.7 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.8 Currency Exchange Fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.9 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.10 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.11 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(a) Arrangement, Agency Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(b) Commitment Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.12 Computation of Fees and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.13 Payments by the Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.14 Payments by the Banks to the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.15 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.16 Amount and Terms of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(a) Letter of Credit Commitments; Terms of Letters of Credit . . . . . . . . . . . . . . . . . 35
(b) Procedure for Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . 36
(c) Draws upon Letters of Credit; Reimbursement Obligations . . . . . . . . . . . . . . . . . . 37
(d) Banks' Participation in Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 37
(e) Interest and Fees for Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(f) LC Obligations Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(g) Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(h) Stated Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . . . . . . . . . . . . . 42
3.1 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.2 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.3 Increased Costs and Reduction of Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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3.4 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.5 Inability to Determine Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.6 Certificates of Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3.7 Substitution of Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.8 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE IV
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . 46
4.1 Conditions of Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(a) Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(b) Resolutions; Incumbency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(c) Organization Documents; Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(d) Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(e) Payment of Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(f) Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(h) Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.2 Conditions to All Borrowings and Letter of Credit Issuances . . . . . . . . . . . . . . . . . . . . 48
(a) Notice of Borrowing or Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
(b) Continuation of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . 48
(c) No Existing Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE V
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 49
5.1 Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.2 Corporate Authorization; No Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.3 Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.4 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.6 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.7 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.8 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.9 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.11 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.13 Regulated Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.14 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.15 Copyrights, Patents, Trademarks and Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.16 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.18 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE VI
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AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . 53
6.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.2 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.4 Preservation of Corporate Existence, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.5 Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.7 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.8 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.9 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.10 Inspection of Property and Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.11 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.12 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.13 Additional Subsidiary Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VII
NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 58
7.1 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.2 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.3 Consolidations and Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.4 Loans and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.5 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.6 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.7 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.8 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.9 Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.10 Lease Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.11 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.13 Change in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.14 Accounting Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.15 Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.16 Limitation on Certain Restrictions on Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.17 Organization Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.18 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
(a) Maintenance of Consolidated Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . 67
(b) Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
(c) Funded Debt to EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
(e) Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE VIII
EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . 69
8.1 Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
(a) NonPayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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(b) Representation or Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
(c) Specific Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
(d) Other Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
(e) Cross-Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
(f) Insolvency; Voluntary Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
(g) Involuntary Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
(h) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
(i) Monetary Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(j) Non-Monetary Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(k) Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(l) Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(m) Unenforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.3 Rights Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE IX
THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.1 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.3 Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.6 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.7 Indemnification of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.8 Agent in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.10 Withholding Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE X
GUARANTEES OF COMPANY AND EACH BORROWER . . . . . . . . . . . . . . . . . . 78
10.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.2 Unconditional Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
10.3 Period In Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.5 Effect of Stay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.6 No Subrogation, Contribution, Reimbursement or Indemnity . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE XI
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 80
11.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.4 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.5 Borrowers Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
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11.6 Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
11.7 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.8 Assignments, Participations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.9 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.10 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.11 Automatic Debits of Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.12 Notification of Addresses, Lending Offices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.15 No Third Parties Benefited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.16 Governing Law and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.17 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.18 Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.19 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
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SCHEDULES
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Schedule 2.1 Commitments
Schedule 5.5 Litigation
Schedule 5.7 ERISA
Schedule 5.11 Permitted Liabilities
Schedule 5.12 Environmental Matters
Schedule 5.16 Subsidiaries and Minority Interests
Schedule 5.17 Insurance Matters
Schedule 7.1 Permitted Liens
Schedule 7.5 Permitted Indebtedness
Schedule 7.8 Contingent Obligations
Schedule 10.2 Lending Offices; Addresses for Notices
EXHIBITS
--------
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Borrower Counsel
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Promissory Note
Exhibit G Form of Intercompany Note Pledge Agreement
Exhibit H Form of Subsidiary Guarantee Agreement
Exhibit I Form of Intercreditor and Subordination Agreement
Exhibit J Form of Letter of Credit Request
vi
8
MULTICURRENCY CREDIT AGREEMENT
This MULTICURRENCY CREDIT AGREEMENT is entered into as of June 30,
1995, among Schawk, Inc., a Delaware corporation (the "Company"), Filtertek
USA, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company
("Filtertek"), the several financial institutions from time to time party to
this Agreement (collectively, the "Banks"; individually, a "Bank"), and Bank of
America National Trust and Savings Association, as agent for the Banks. The
Company and Filtertek are referred to individually as a "Borrower" and
collectively as the "Borrowers".
WHEREAS, the Banks have agreed to make available to the Borrowers a
revolving multicurrency credit facility upon the terms and conditions set forth
in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms have the following
meanings:
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the
acquisition of in excess of 50% of the capital stock, partnership
interests, membership interests or equity of any Person, or otherwise
causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than
a Person that is a Subsidiary) provided that the Company or the
Subsidiary is the surviving entity.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. A Person shall be deemed to
control another Person if the controlling Person possesses, directly
or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, membership interests, by contract, or
otherwise.
"Agent" means BofA in its capacity as agent for the Banks
hereunder, and any successor agent arising under Section 9.9.
9
"Agent-Related Persons" means BofA and any successor agent
arising under Section 9.9, together with their respective Affiliates,
and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"Agent's Payment Office" means (i) in respect of payments in
Dollars, the address for payments set forth on Schedule 11.2 in
relation to the Agent or such other address as the Agent may from time
to time specify in accordance with Section 11.2, and, (ii) in the case
of payments in any Offshore Currency, the address for payments set
forth in Schedule 11.2 in relation to the Agent or such other address
as the Agent may from time to time specify in accordance with Section
11.2.
"Agreed Alternative Currency" has the meaning specified in
subsection 2.5(e).
"Agreement" means this Multicurrency Credit Agreement.
"Applicable Currency" means, as to any particular payment or
Loan, Dollars or the Offshore Currency in which it is denominated or
is payable.
"Applicable Margin" means at any date, the applicable
percentage amount set forth in the following table opposite the
applicable ratio of Funded Debt to EBITDA on a trailing four quarter
basis as shown in the Compliance Certificate then most recently
delivered to the Banks:
-------------------------------------------------------------------------------------------
Ratio of Funded Debt Applicable Margin
to EBITDA
-------------------------------------------------------------------------------------------
3.0 or more .875%
-------------------------------------------------------------------------------------------
less than 3.0 but .750%
more than or equal to 2.5
-------------------------------------------------------------------------------------------
less than 2.5 but .625%
more than or equal to 2.0
-------------------------------------------------------------------------------------------
less than 2.0 but more .500%
than or equal to 1.75
-------------------------------------------------------------------------------------------
less than 1.75 .400%
-------------------------------------------------------------------------------------------
provided, however that for the period from the date hereof to June 30,
1996, the Applicable Margin shall be deemed to be .625%; provided
further that, if the Company shall have failed to deliver to the Banks
by the date required hereunder its Compliance Certificate pursuant to
Section 6.2(b), then until such delivery the Applicable Margin shall
be deemed to be .875%. Each change in the Applicable Margin
2
10
shall take effect with respect to all outstanding Offshore Rate Loans
on the first day of the month immediately succeeding the month in
which such Compliance Certificate is received by Agent and the Banks.
Notwithstanding the foregoing, no reduction in the Applicable Margin
shall be effected if a Default shall have occurred and be continuing
on the date when such change would otherwise occur.
"Assignee" has the meaning specified in subsection 11.8(a).
"Attorney Costs" means and includes all fees and disbursements
of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
"Bank" has the meaning specified in the introductory clause
hereto.
"Banking Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City, Chicago or San
Francisco are authorized or required by law to close and (i) with
respect to disbursements and payments in Dollars, a day on which
dealings are carried on in the applicable offshore Dollar interbank
market, and (ii) with respect to any disbursements and payments in and
calculations pertaining to any Offshore Currency Loan, a day on which
commercial banks are open for foreign exchange business in London,
England, and on which dealings in the relevant Offshore Currency are
carried on in the applicable offshore foreign exchange interbank
market in which disbursement of or payment in such Offshore Currency
will be made or received hereunder.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C. Section 101, et seq.).
"Base Rate" means, for any day, the higher of:
(a) 0.50% per annum above the latest Federal
Funds Rate; and (b) the rate of interest in effect for such
day as publicly announced from time to time by BofA in San
Francisco, California, as its "reference rate." (The
"reference rate" is a rate set by BofA based upon various
factors including BofA's costs and desired return, general
economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced
at, above, or below such announced rate.)
Any change in the reference rate announced by BofA shall take
effect at the opening of business on the day specified in the public
announcement of such change.
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11
"Base Rate Loan" means a Loan that bears interest based on the
Base Rate.
"BofA" means Bank of America National Trust and Savings
Association, a national banking association.
"Borrower" and "Borrowers" have the meaning specified in the
introductory clause hereto.
"Borrowing" means a borrowing hereunder consisting of Loans of
the same Type and in the same Applicable Currency made to a Borrower
on the same day by the Banks under Article II, and, other than in the
case of Base Rate Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs
under Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City, Chicago or San
Francisco are authorized or required by law to close and, if the
applicable Business Day relates to any Offshore Rate Loan, means a
Banking Day.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Capital Expenditures" means, for any period and with respect
to any Person, the aggregate of all expenditures by such Person and
its Subsidiaries for the acquisition or leasing of fixed or capital
assets or additions to equipment (including replacements, capitalized
repairs and improvements during such period) which should be
capitalized under GAAP on a consolidated balance sheet of such Person
and its Subsidiaries, less net proceeds from sales of fixed or capital
assets received by such Person or any of its Subsidiaries during such
period. For the purpose of this definition, the purchase price of
equipment which is purchased simultaneously with the trade-in of
existing equipment owned by such Person or any of its Subsidiaries or
with insurance proceeds shall be included in Capital Expenditures only
to the extent of the gross amount of such purchase price less the
credit granted by the seller of such equipment for such equipment
being traded in at such time, or the amount of such proceeds, as the
case may be.
"Capital Lease" has the meaning specified in the definition of
"Capital Lease Obligations."
4
12
"Capital Lease Obligations" means all monetary obligations of
the Company or any of its Subsidiaries under any leasing or similar
arrangement which, in accordance with GAAP, is classified as a capital
lease ("Capital Lease").
"Change of Control" means any of the following: (i) the
Schawk Family shall cease to own, free and clear of all liens or other
encumbrances, at least 51% of the outstanding shares of voting stock
of the Company on a fully diluted basis; or (ii) during any period of
twelve consecutive calendar months, individuals who at the beginning
of such period constituted the Company's board of directors (together
with any new directors whose election by the Company's board of
directors or whose nomination for election by the Company's
stockholders 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 reasons other than death or
disability to constitute a majority of the directors then in office;
or (iii) the Company shall cease to own, free and clear of all liens
or other encumbrances, 100% of the outstanding shares of capital stock
of Filtertek.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations, rights in or other equivalents
(however designated) of such Person's capital stock and any rights
(other than debt securities convertible into or exchangeable for
capital stock), warrants or options exchangeable for or convertible
into such capital stock.
"Closing Date" means the date on which all conditions
precedent set forth in Section 4.1 are satisfied or waived by all
Banks (or, in the case of subsection 4.1(e), waived by the Person
entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"Commitment", as to each Bank, has the meaning specified in
Section 2.1.
"Company" has the meaning specified in the introductory clause
hereto.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit C.
"Computation Date" has the meaning specified in subsection
2.5(a).
5
13
"Consolidated Fixed Charges" means, for any period, for the
Company and its Subsidiaries, the sum of (without duplication) (i)
Consolidated Interest Expense, (ii) all scheduled payments of
principal on Indebtedness of the Company and its Subsidiaries
(including, without limitation, principal payments in respect of
Capital Leases and in the case of this Agreement, scheduled reductions
in the combined Commitment, but only to the extent that (a) the
average daily borrowed portion of the combined Commitment during such
period exceeds (b) the amount of the combined Commitment on the date
of determination), (iii) taxes paid in cash, (iv) payments under
operating leases, and (v) cash dividends paid by the Company as each
of the foregoing is made during such period of determination in
accordance with GAAP on a consolidated basis.
"Consolidated Interest Expense" means, for any period, the sum
of total interest expense (including that attributable to Capitalized
Leases in accordance with GAAP) of the Company and its Subsidiaries on
a consolidated basis with respect to all outstanding Indebtedness of
the Company and its Subsidiaries, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, but excluding,
however, any amortization of deferred financing costs, all as
determined on a consolidated basis for the Company and its
consolidated Subsidiaries in accordance with GAAP.
"Consolidated Net Income" and "Consolidated Net Loss" mean,
respectively, with respect to any period, the aggregate of the net
income (loss) of the Person in question for such period, determined in
accordance with GAAP on a consolidated basis, provided that (i) the
net income (loss) of any Person which is not a Subsidiary shall be
included only to the extent of the amount of cash dividends or
distributions paid to the Person in question or to a consolidated
Subsidiary of such Person and (ii) the net income (loss) of any Person
acquired in a pooling of interests transaction for any period prior to
the date of such acquisition shall be excluded. There shall be
excluded in computing Consolidated Net Income the excess (but not the
deficit), if any, of (i) any gain which must be treated as an
extraordinary item under GAAP or any gain realized upon the sale or
other disposition of any real property or equipment that is not sold
in the ordinary course of business or of any capital stock of the
Person or a Subsidiary of the Person over (ii) any loss which must be
treated as an extraordinary item under GAAP or any loss realized upon
the sale or other disposition of any real property or equipment that
is not sold in the ordinary course of business or of any capital stock
of the Person or a Subsidiary of the Person.
6
14
"Consolidated Tangible Net Worth" of a Person means, without
duplication, the sum of (i) total stockholders' equity (excluding
treasury stock) less (ii) the net book value of all assets of such
Person and its consolidated Subsidiaries which would be treated as
intangibles under GAAP, including, without limitation, deferred
charges, leasehold conversion costs, franchise rights, non-compete
agreements, research and development costs, goodwill, unamortized debt
discounts, patents, patent applications, trademarks, trade names,
copyrights and licenses.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person (i) to purchase, repurchase or otherwise
acquire such primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any such
primary obligation, or to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, or (iv) otherwise to
assure or hold harmless the holder of any such primary obligation
against loss in respect thereof (each, a "Guaranty Obligation"); (b)
with respect to any Surety Instrument issued for the account of that
Person or as to which that Person is otherwise liable for
reimbursement of drawings or payments; (c) to purchase any materials,
supplies or other property from, or to obtain the services of, another
Person if the relevant contract or other related document or
obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether
delivery of such materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered, or (d) in
respect of any Swap Contract. The amount of any Contingent Obligation
shall, in the case of Guaranty Obligations, be deemed equal to the
stated or determinable amount of the primary obligation in respect of
which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in
respect thereof, and in the case of other Contingent Obligations,
shall be equal to the maximum reasonably anticipated liability in
respect thereof.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed
7
15
of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under
Section 2.4, a Borrower (a) converts Loans of one Type to another
Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, Loans having Interest Periods expiring on such date.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
"Dollar Equivalent" means, at any time, (a) as to any amount
denominated in Dollars, the amount thereof at such time, and (b) as to
any amount denominated in an Offshore Currency, the equivalent amount
in Dollars as determined by the Agent at such time on the basis of the
Spot Rate for the purchase of Dollars with such Offshore Currency on
the most recent Computation Date provided for in subsection 2.5(a).
"Dollars", "dollars" and "$" each mean lawful money of the
United States.
"Domestic Subsidiary": any Subsidiary of the Company that is
not a Foreign Subsidiary.
"EBIT" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) Consolidated Net Income for such period plus (b)
all amounts treated as expenses for interest to the extent included in
the determination of such Consolidated Net Income plus (c) all accrued
taxes on or measured by income to the extent included in the
determination of such Consolidated Net Income; provided, however, that
Consolidated Net Income shall be computed for these purposes without
giving effect to extraordinary losses or extraordinary gains.
"EBITDA" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) EBIT plus (b) all amounts treated as expenses for
depreciation and the amortization of intangibles of any kind to the
extent included in the determination of Consolidated Net Income.
"Eligible Assignee" means (i) a commercial bank organized
under the laws of the United States, or any state thereof, and having
a combined capital and surplus of at least $200,000,000; (ii) a
commercial bank organized under the laws of any other country which is
a member of the Organization for Economic Cooperation and Development
(the
8
16
"OECD"), or a political subdivision of any such country, and having a
combined capital and surplus of at least $200,000,000 or its Dollar
Equivalent, provided that such bank is acting through a branch or
agency located in the United States; and (iii) a Person that is
primarily engaged in the business of commercial banking and that is
(A) a Subsidiary of a Bank, (B) a Subsidiary of a Person of which a
Bank is a Subsidiary, or (C) a Person of which a Bank is a Subsidiary.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters.
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning
of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of
the Code for purposes of provisions relating to Section 412 of the
Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by a Borrower or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in Section
4001(a)(2) of ERISA) or a cessation of operations which is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by a Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; or
(f) the imposition of any liability under Title IV of ERISA, other
than PBGC premiums due but not delinquent under Section 4007 of ERISA,
upon a Borrower or any ERISA Affiliate.
9
17
"Eurodollar Reserve Percentage" has the meaning specified in
the definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances
specified in Section 8.1.
"Exchange Act" means the Securities and Exchange Act of 1934,
and regulations promulgated thereunder.
"Existing Credit Agreements" means (i) that certain Credit
Agreement dated as of September 21, 1992 by and among the Company, The
First National Bank of Chicago, as agent and the financial
institutions party thereto, and (ii) that certain Credit Agreement
dated as of December 22, 1993 by and among Filtertek, Filtertek De
Puerto Rico, Inc. and The Northern Trust Company, as Agent, and the
lenders identified therein, in each case, as the same have been
thereafter amended or otherwise modified from time to time.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal
functions.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York (including any such successor, "H.15(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective)"; or, if
for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic
mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City
time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"Fee Letter" has the meaning specified in subsection 2.11(a).
"Filtertek" has the meaning specified in the introductory
clause hereto.
"Foreign Subsidiary" any Subsidiary of the Company that (A)
is incorporated under the laws of a jurisdiction other than any State
of the U.S., the District of Columbia or any territory, commonwealth
or possession of the U.S. and (B) maintains the major portion of its
assets outside the U.S.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"Funded Indebtedness" shall at any date mean:
10
18
(a) all outstanding principal under this Agreement
and the Indebtedness outstanding under the Short Term Revolving
Facility; and
(b) all Subordinated Indebtedness of the Company or any
of its Subsidiaries to any member of the Schawk Family to the extent
such Indebtedness is permitted pursuant to the terms hereof;
(c) all other Indebtedness (excluding any Indebtedness
included solely within clause (b) of the definition of Indebtedness)
of the Company or any of its Subsidiaries which by its terms
(i) matures more than one year from the date of
its creation, or
(ii) matures within one year from the date of its
creation but, at the Company's or such Subsidiary's election,
is renewable or extendible (whether or not theretofore renewed
or extended) under, or payable from the proceeds of any other
Indebtedness which may be incurred pursuant to the provisions
of, any revolving credit or similar agreement.
"FX Trading Office" means the Foreign Exchange Trading Center,
Chicago, Illinois, of BofA, or such other of BofA's offices as BofA
may designate from time to time.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date
of determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" has the meaning specified in the
definition of "Contingent Obligation."
"Indebtedness" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the
11
19
deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business on ordinary
terms); (c) all non-contingent reimbursement or payment obligations
with respect to Surety Instruments; (d) all obligations evidenced by
notes, bonds, debentures or similar instruments, including obligations
so evidenced incurred in connection with the acquisition of property,
assets or businesses; (e) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred
as financing, in either case with respect to property acquired by the
Person (even though the rights and remedies of the seller or bank
under such agreement in the event of default are limited to
repossession or sale of such property); (f) all Capital Lease
Obligations; (g) all net obligations with respect to Swap Contracts;
(h) all indebtedness referred to in clauses (a) through (g) above
secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien
upon or in property (including accounts and contracts rights) owned by
such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness; and (i) all Guaranty Obligations
in respect of indebtedness or obligations of others of the kinds
referred to in clauses (a) through (g) above.
"Indemnified Liabilities" has the meaning specified in Section
11.5.
"Indemnified Person" has the meaning specified in Section
11.5.
"Independent Auditor" has the meaning specified in subsection
6.1(a).
"Insolvency Proceeding" means (a) any case, action or
proceeding before any court or other Governmental Authority relating
to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding- up or relief of debtors, or (b) any general
assignment for the benefit of creditors, composition, marshalling of
assets for creditors, or other, similar arrangement in respect of its
creditors generally or any substantial portion of its creditors;
undertaken under U.S. Federal, state or foreign law, including the
Bankruptcy Code.
"Intercompany Note Pledge Agreement" means the Note Pledge
Agreement in substantially the form of Exhibit G hereto, dated as of
the date hereof, made by the Borrowers in favor of the beneficiaries
named therein, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms and the terms
hereof.
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20
"Intercreditor and Subordination Agreement" means the
Intercreditor and Subordination Agreement dated the date hereof, in
substantially the form of Exhibit I, by and among the Borrowers,
Xxxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx, and the
Agent for the benefit of the Banks.
"Interest Payment Date" means, as to any Loan other than a
Base Rate Loan, the last day of each Interest Period applicable to
such Loan and, as to any Base Rate Loan, the last Business Day of each
calendar quarter and each date such Loan is converted into another
Type of Loan; provided, however, that if any Interest Period for an
Offshore Rate Loan exceeds three months, the date that falls three
months after the beginning of such Interest Period and after each
Interest Payment Date thereafter is also an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter as selected by the applicable Borrower
in its Notice of Borrowing or Notice of Conversion/Continuation, as
selected by the applicable Borrower in its Notice of Borrowing or
Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless, in the case of
an Offshore Rate Loan, the result of such extension would be
to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the preceding
Business Day;
(ii) any Interest Period pertaining to an Offshore
Rate Loan that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period;
(iii) no Interest Period for any Revolving Loan
shall extend beyond the Revolving Termination Date; and
(iv) no Interest Period applicable to a Revolving
Loan or portion thereof shall extend beyond any date upon
which is due any scheduled principal payment in
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respect of the Revolving Loans unless the aggregate principal amount
of Revolving Loans represented by Base Rate Loans or Offshore Rate
Loans having Interest Periods that will expire on or before such date,
equals or exceeds the amount of such principal payment.
"Issuing Bank" has the meaning specified in Section 2.16(a).
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Joint Venture" means a single-purpose corporation,
partnership, limited liability company, joint venture or other similar
legal arrangement (whether created by contract or conducted through a
separate legal entity) now or hereafter formed by the Company or any
of its Subsidiaries with another Person in order to conduct a common
venture or enterprise with such Person.
"LC Commission" has the meaning specified in Section
2.16(e)(ii).
"LC Obligations" means, at any time, an amount equal to the
sum of (a) the aggregate Stated Amount of the outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of
Credit which have not then been reimbursed pursuant to Section
2.16(c). The LC Obligation of any Bank at any time shall mean the
amount equal to (x) the aggregate amount of LC Obligations outstanding
at such time times (y) such Bank's Pro Rata Share.
"Lending Office" means, as to any Bank, the office or offices
of such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, on Schedule
11.2, or such other office or offices as such Bank may from time to
time notify the Borrowers and the Agent.
"Letter of Credit" means any letter of credit issued
hereunder.
"Letter of Credit Cash Collateral Account" has the meaning
specified in Section 8.2.
"Letter of Credit Commitment Sublimit" means $10,000,000.
"Letter of Credit Payment" means, as applicable, (a) all
payments made by the Issuing Bank pursuant to either a draft or demand
for payment under a Letter of Credit or (b)
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all payments made by the Banks to the Issuing Bank in respect thereof.
"Letter of Credit Request" has the meaning specified in
Section 2.16(b).
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale
or other title retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any
financing statement naming the owner of the asset to which such lien
relates as debtor, under the Uniform Commercial Code or any comparable
law) and any contingent or other agreement to provide any of the
foregoing, but not including the interest of a lessor under an
operating lease.
"Loan" means an extension of credit by a Bank to a Borrower
under Article II, and may be a Base Rate Loan or an Offshore Rate Loan
(each, a "Type" of Loan).
"Loan Documents" means this Agreement, any Notes, the Fee
Letters and all other documents delivered to the Agent or any Bank in
connection herewith.
"Majority Banks" means at any time Banks then holding in
excess of 59% of the then aggregate unpaid principal amount of the
Loans, or, if no such principal amount is then outstanding, Banks then
having in excess of 59% of the Commitments.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means, with respect to any Person,
(a) a material adverse change in, or a material adverse effect upon,
the operations, business, properties, condition (financial or
otherwise) or prospects of such Person or such Person and its
Subsidiaries taken as a whole; (b) a material impairment of the
ability of the Company or any Subsidiary to perform under any Loan
Document and to avoid any Event of Default; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability
against the Company or any Subsidiary of any Loan Document.
"Minimum Tranche" means, in respect of Loans comprising part
of the same Borrowing, or to be converted or continued under Section
2.4, (a) in the case of Base Rate Loans, $500,000 or any multiple of
$100,000 in excess
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thereof, and (b) in the case of Offshore Rate Loans, the Dollar
Equivalent amount of $1,000,000 or any multiple of 500,000 units of
the Applicable Currency in excess thereof.
"Multiemployer Plan" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which a Borrower or any
ERISA Affiliate makes, is making, or is obligated to make
contributions or, during the preceding three calendar years, has made,
or been obligated to make, contributions.
"Note" means a promissory note executed by the Borrowers in
favor of a Bank pursuant to subsection 2.2(b), in substantially the
form of Exhibit F.
"Notice of Borrowing" means a notice in substantially the form
of Exhibit A.
"Notice of Conversion/Continuation" means a notice in
substantially the form of Exhibit B.
"Obligations" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document
owing by any Borrower to any Bank, the Agent, or any Indemnified
Person, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now
existing or hereafter arising.
"Offshore Currency" means at any time English pounds sterling,
Canadian dollars, French francs, German Deutsche Marks, Japanese yen
and any Agreed Alternative Currency.
"Offshore Currency Loan" means any Offshore Rate Loan
denominated in an Offshore Currency.
"Offshore Currency Loan Sublimit" means, at any time of
determination, as to all Offshore Currencies in the aggregate, the
Dollar Equivalent amount of 50% of the aggregate Commitments of the
Banks, and, as to any single Offshore Currency, the Dollar Equivalent
amount of 25% of the aggregate Commitments of Banks.
"Offshore Rate" means, for any Interest Period, with respect
to Offshore Rate Loans comprising part of the same Borrowing, the rate
of interest per annum (rounded upward to the next 1/16th of 1%)
determined by the Agent as follows:
Offshore Rate = IBOR
-----------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
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"Eurodollar Reserve Percentage" means for any day for
any Interest Period the maximum reserve percentage (expressed
as a decimal, rounded upward to the next 1/100th of 1%) in
effect on such day (whether or not applicable to any Bank)
under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"IBOR" means the rate of interest per annum
determined by the Agent as the rate at which deposits in the
Applicable Currency in the approximate amount of BofA's
Offshore Rate Loan for such Interest Period would be offered
by BofA's Grand Cayman Branch, Grand Cayman B.W.I. (or such
other office as may be designated for such purpose by BofA),
to major banks in the offshore currency interbank market at
their request at approximately 11:00 a.m. (New York City time)
two Business Days prior to the commencement of such Interest
Period.
The Offshore Rate shall be adjusted automatically as
to all Offshore Rate Loans then outstanding as of the
effective date of any change in the Eurodollar Reserve
Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on
the Offshore Rate, and may be an Offshore Currency Loan or a Loan
denominated in Dollars.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate
of determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement,
and all applicable resolutions of the board of directors (or any
committee thereof) of such corporation.
"Other Taxes" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents.
"Overnight Rate" means, for any day, the rate of interest per
annum at which overnight deposits in the Applicable Currency, in an
amount approximately equal to the amount with respect to which such
rate is being determined, would be offered for such day by BofA's
London Branch to major banks in the London or other applicable
offshore interbank market.
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"Participant" has the meaning specified in subsection 11.8(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which a Borrower sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as
described in Section 4064(a) of ERISA) has made contributions at any
time during the immediately preceding five (5) plan years.
"Permitted Liens" has the meaning specified in Section 7.1.
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which a Borrower sponsors or maintains or to which a
Borrower makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of such Bank's Commitment divided by the
combined Commitments of all Banks.
"Replacement Bank" has the meaning specified in Section 3.7.
"Reportable Event" means, any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has
been waived in regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority, in each case applicable
to or binding upon the Person or any of its property or to which the
Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, the
president or the executive vice-president of a Borrower, or any other
officer having substantially the same authority and responsibility;
or, with respect to
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compliance with financial covenants, the chief financial officer or
the treasurer of a Borrower, or any other officer having substantially
the same authority and responsibility.
"Revolving Loan" has the meaning specified in Section 2.1.
"Revolving Termination Date" means the earlier to occur of:
(a) June 30, 2000; and
(b) the date on which the Commitments terminate in
accordance with the provisions of this Agreement.
"Same Day Funds" means (i) with respect to disbursements and
payments in Dollars, immediately available funds, and (ii) with
respect to disbursements and payments in an Offshore Currency, same
day or other funds as may be determined by the Agent to be customary
in the place of disbursement or payment for the settlement of
international banking transactions in the relevant Offshore Currency.
"Schawk Family" means the persons set forth on Schedule 1.1
hereto, together with any children or grandchildren of such persons
and any grantor trust under which one of such persons shall be the
sole trustee or one of the co-trustees (and such person retains the
sole power to remove any Capital Stock held by such trust from such
trust).
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Short Term Revolving Loan Facility" means the 364 day
revolving loan facility in an initial total amount of $20,000,000
pursuant to that certain Multicurrency Short Term Credit Agreement
dated the date thereof and among the Borrowers, the Agent and the
Banks, as the same may be amended from time to time and any renewal,
modification or extension thereof.
"Spot Rate" for a currency means the rate quoted by BofA as
the spot rate for the purchase by BofA of such currency with another
currency through its FX Trading Office at approximately 10:30 a.m.
(Chicago time) on the date two Banking Days prior to the date as of
which the foreign exchange computation is made.
"Stated Amount" means the stated or face amount of a Letter of
Credit to the extent available at the time for drawing (subject to
presentment of all requested
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documents), as the same may be increased or decreased from time to
time in accordance with the terms of such Letter of Credit.
"Subordinated Indebtedness" means any Indebtedness of the
Company or Filtertek to Xxxxxxxx X. Xxxxxx constituting Subordinated
Indebtedness under the terms of the Intercreditor and Subordination
Agreement or the payment of which is otherwise fully and deeply
subordinated to payment of the Obligations to the written satisfaction
of the Agent and the Majority Banks including but not limited to: (i)
having a termination date after the Revolving Termination Date; (ii)
allowing no principal payments prior to the Revolving Termination Date
except to the extent expressly permitted by this Agreement; (iii)
accruing interest at a rate no greater than 2% per annum in excess of
the Base Rate; (iv) allowing no acceleration other than cross
acceleration to the acceleration of the Obligations; and (v) allowing
principal and accrued interest to be paid only to the extent that
after giving effect to the contemplated payment, no Default or Event
of Default exists or will exist.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other
business entity of which more than 50% of the voting stock, membership
interests or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the
Company.
"Subsidiary Guarantor" means, individually, each of the
Domestic Subsidiaries of the Company signatory to the Subsidiary
Guarantee Agreement and such other Subsidiaries from time to time
party to such Agreement and collectively, all of such Subsidiaries.
"Subsidiary Guarantee Agreement" means the Subsidiary
Guarantee Agreement in substantially the form of Exhibit H hereto,
dated as of the date hereof, made by the Subsidiary Guarantors in
favor of the beneficiaries named therein, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with its terms and the terms hereof.
"Surety Instruments" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments.
"Swap Contract" means any agreement (including any master
agreement and any agreement, whether or not in
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writing, relating to any single transaction) that is an interest rate
swap agreement, basis swap, forward rate agreement, commodity swap,
commodity option, equity or equity index swap or option, bond option,
interest rate option, forward foreign exchange agreement, rate cap,
collar or floor agreement, currency swap agreement, cross-currency
rate swap agreement, swaption, currency option or any other, similar
agreement (including any option to enter into any of the foregoing).
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Bank and the Agent,
such taxes (including income taxes or franchise taxes) as are imposed
on or measured by each Bank's or Agent's net income by the
jurisdiction (or any political subdivision thereof) under the laws of
which such Bank or the Agent, as the case may be, is organized or
maintains a lending office.
"Trade Letter of Credit" means a trade or commercial Letter of
Credit issued by the Issuing Bank pursuant to Section 2.16.
"Type" has the meaning specified in the definition of "Loan."
"Total Capitalization" means the sum of Funded Debt and total
stockholders' equity (excluding treasury stock) of the Company.
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.
"United States" and "U.S." each means the United States of
America.
"Wholly-Owned Subsidiary" means any Subsidiary in which (other
than directors' qualifying shares required by law) 100% of the capital
stock of each class having ordinary voting power, and 100% of the
capital stock of every other class, in each case, at the time as of
which any determination is being made, is owned, beneficially and of
record, by the Company, or by one or more of the other Wholly-Owned
Subsidiaries, or both.
1.2 Other Interpretive Provisions. (a) The meanings of defined
terms are equally applicable to the singular and plural forms of the defined
terms.
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(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices
and other writings, however evidenced.
(ii) The term "including" is not limiting and
means "including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and (ii)
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use
several different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are cumulative
and shall each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by counsel to the Agent,
the Borrowers and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Banks or the Agent merely
because of the Agent's or Banks' involvement in their preparation.
1.3 Accounting Principles. (a) Unless the context otherwise
clearly requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement shall
be made, in accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal
quarter" refer to such fiscal periods of the Company.
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1.4 Currency Equivalents Generally. For all purposes of
this Agreement (but not for purposes of the preparation of any financial
statements delivered pursuant hereto), the equivalent in any Offshore Currency
or other currency of an amount in Dollars, and the equivalent in Dollars of an
amount in any Offshore Currency or other currency, shall be determined at the
Spot Rate.
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments. Each Bank severally agrees,
on the terms and conditions set forth herein, to make loans to the Borrowers
(each such loan, a "Revolving Loan") and to participate in Letters of Credit
from time to time on any Business Day during the period from the Closing Date
to the Revolving Termination Date, in an aggregate principal Dollar Equivalent
amount not to exceed at any time outstanding the amount set forth opposite the
Bank's name in Schedule 2.1(b) under the heading "Commitment" (such amount as
the same may be reduced pursuant to Section 2.6 or as a result of one or more
assignments pursuant to Section 11.8, the Bank's "Commitment"); provided,
however, that, after giving effect to any Borrowing of Revolving Loans or
issuance of a Letter of Credit, the aggregate principal Dollar Equivalent
amount of all outstanding Revolving Loans plus the aggregate amount of
outstanding LC Obligations shall not exceed the combined Commitments; and
provided further that, after giving effect to any Borrowing of Offshore
Currency Loans, the aggregate principal Dollar Equivalent amount of all
outstanding Offshore Currency Loans shall not exceed the Offshore Currency Loan
Sublimit. Within the limits of each Bank's Commitment, and subject to the
other terms and conditions hereof, the Borrowers may borrow under this
subsection 2.1(b), prepay pursuant to Section 2.6 and reborrow pursuant to this
subsection 2.1(b).
2.2 Loan Accounts. (a) The Loans made by each Bank shall be
evidenced by one or more loan accounts or records maintained by such Bank in
the ordinary course of business. The loan accounts or records maintained by
the Agent and each Bank shall be presumptive evidence of the amount of the
Loans made by the Banks to the applicable Borrower and the interest and
payments thereon. Any failure so to record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrowers hereunder to
pay any amount owing with respect to the Loans.
(b) The Loans made by such Bank shall also be evidenced
by one or more Notes as provided herein. Each such Bank shall endorse on the
schedules annexed to its Note(s) the date, amount and maturity of each Loan
made by it and the amount and Applicable Currency of each payment of principal
made by the applicable Borrower with respect thereto. Each such Bank is
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irrevocably authorized by the Borrowers to endorse its Note(s) and each Bank's
record shall be conclusive absent manifest error; provided, however, that the
failure of a Bank to make, or an error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect the obligations of the
Borrowers hereunder or under any such Note to such Bank.
2.3 Procedure for Borrowing. (a) Each Borrowing shall be made
upon the applicable Borrower's irrevocable written notice in substantially the
form attached hereto as Exhibit 2.3 (or telephonic notice promptly confirmed in
writing) delivered to the Agent in the form of a Notice of Borrowing (which
notice must be received by the Agent prior to 10:30 a.m. (Chicago time) (i)
four Business Days prior to the requested Borrowing Date, in the case of
Offshore Currency Loans; (ii) two Business Days prior to the requested
Borrowing Date, in the case of Offshore Rate Loans denominated in Dollars; and
(iii) on the requested Borrowing Date, in the case of Base Rate Loans),
specifying:
(A) the applicable Borrower;
(B) the amount of the Borrowing, which
shall be in an aggregate amount not less than the Minimum
Tranche;
(C) the requested Borrowing Date, which
shall be a Business Day;
(D) the Type of Loans comprising the
Borrowing;
(E) the duration of the Interest Period
applicable to such Loans included in such notice. If the
Notice of Borrowing fails to specify the duration of the
Interest Period for any Borrowing comprised of Offshore Rate
Loans, such Interest Period shall be three months; and
(F) in the case of a Borrowing comprised
of Offshore Currency Loans, the Applicable Currency.
provided, however, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Agent not later than
10:30 a.m. (Chicago time) on the Closing Date and such Borrowing will consist
of Base Rate Loans or, Offshore Rate Loan in Dollars if the applicable Borrower
has notified the Agent and the Banks at least three Business Days prior to the
Closing Date and at such time has agreed to pay losses and expenses, in the
same manner as required by Section 3.4 in the event the initial Borrowing does
not occur in accordance with such request.
(b) The Dollar Equivalent amount of any Borrowing in an
Offshore Currency will be determined by the Agent for such Borrowing on the
Computation Date therefor in accordance with
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subsection 2.5(a). Upon receipt of the Notice of Borrowing, the Agent will
promptly notify each Bank thereof and of the amount of such Bank's Pro Rata
Share of the Borrowing. In the case of a Borrowing comprised of Offshore
Currency Loans, the Agent will, upon the determination of the Dollar Equivalent
amount of the Borrowing as specified in the Notice of Borrowing, promptly
notify each Bank of such Dollar Equivalent amount.
(c) Each Bank will make the amount of its Pro Rata Share
of each Borrowing available to the Agent for the account of the Borrower at the
Agent's Payment Office on the Borrowing Date requested by such Borrower in the
Same Day Funds and in the requested currency (i) in the case of a Borrowing
comprised of Loans in Dollars, by 12:00 noon (Chicago time), (ii) in the case
of a Borrowing comprised of Offshore Currency Loans, by such time, on or after
12:00 noon (local time at the place of funding) as the Agent may specify. The
proceeds of all such Loans will then be made available to the applicable
Borrower by the Agent at such office by crediting the account of the applicable
Borrower on the books of BofA with the aggregate of the amounts made available
to the Agent by the Banks and in or by wire transfer in accordance with written
instructions provided to the Agent by the applicable Borrower of like funds as
received by the Agent.
(d) After giving effect to any Borrowing, there may not
be more than eight different Interest Periods in effect.
2.4 Conversion and Continuation Elections. (a) The applicable
Borrower may, upon irrevocable written notice to the Agent in accordance with
subsection 2.4(b):
(i) elect, as of any Business Day, in the case of
Base Rate Loans, or as of the last day of the applicable Interest
Period, in the case of any other Type of Loans denominated in Dollars,
to convert any such Loans (or any part thereof in an amount not less
than the Minimum Tranche) into Loans in Dollars of any other Type; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any Loans having Interest Periods
expiring on such day (or any part thereof in an amount not less than
the Minimum Tranche);
provided, that if at any time the aggregate amount of Offshore Rate Loans
denominated in Dollars in respect of any Borrowing is reduced, by payment,
prepayment, or conversion of part thereof to be less than $1,000,000, such
Offshore Rate Loans denominated in Dollars shall automatically convert into
Base Rate Loans, and on and after such date the right of the applicable
Borrower to continue such Loans as, and convert such Loans into Offshore Rate
Loans shall terminate.
(b) The applicable Borrower shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later
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than 10:30 a.m. (Chicago time) (i) at least two Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or
continued as Offshore Rate Loans denominated in Dollars; (ii) at least four
Business Days in advance of the continuation date, if the Loans are to be
continued as Offshore Currency Loans; and (iii) on the Conversion/Continuation
Date, if the Loans are to be converted into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation
Date;
(B) the aggregate amount of Loans to be
converted or continued;
(C) the Type of Loans resulting from the
proposed conversion or continuation; and
(D) other than in the case of
conversions into Base Rate Loans, the duration of the
requested Interest Period.
(c) If upon the expiration of any Interest Period
applicable to Offshore Rate Loans in Dollars, the applicable Borrower has
failed to select timely a new Interest Period to be applicable to such Offshore
Rate Loans, as the case may be, or if any Default or Event of Default then
exists, the applicable Borrower shall be deemed to have elected to convert such
Offshore Rate Loans into Base Rate Loans effective as of the expiration date of
such Interest Period. If the applicable Borrower has failed to select a new
Interest Period to be applicable to Offshore Currency Loans prior to the fourth
Business Day in advance of the expiration date of the current Interest Period
applicable thereto as provided in subsection 2.4(b), or if any Default or Event
of Default shall then exist, subject to the provisions of subsection 2.5(d),
the applicable Borrower shall be deemed to have elected to continue such
Offshore Currency Loans on the basis of a one month Interest Period. The Agent
shall give the applicable Borrower prompt written notice of any such conversion
or continuation.
(d) The Agent will promptly notify each Bank of its
receipt of a Notice of Conversion/Continuation, or, if no timely notice is
provided by the applicable Borrower, the Agent will promptly notify each Bank
of the details of any automatic conversion. All conversions and continuations
shall be made ratably according to the respective outstanding principal amounts
of the Loans with respect to which the notice was given held by each Bank.
(e) Unless the Majority Banks otherwise agree, during the
existence of a Default or Event of Default, no Borrower may elect to have a
Loan in Dollars converted into or continued as an Offshore Rate Loan in Dollars
or an Offshore Currency Loan
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continued on the basis of an Interest Period exceeding one month.
(f) After giving effect to any conversion or continuation
of Loans, there may not be more than eight different Interest Periods in
effect.
2.5 Utilization of Revolving Commitments in Offshore Currencies.
(a) The Agent will determine the Dollar Equivalent
amount with respect to any (i) Borrowing comprised of Offshore
Currency Loans as of the requested Borrowing Date, (ii) outstanding Offshore
Currency Loans as of the last Banking Day of each month, and (iii) outstanding
Offshore Currency Loans as of any redenomination date pursuant to this Section
2.5 or Section 3.5 (each such date under clauses (i) through (iii) a
"Computation Date").
(b) In the case of a proposed Borrowing comprised of
Offshore Currency Loans, the Banks shall be under no obligation to make
Offshore Currency Loans in the requested Offshore Currency as part of such
Borrowing if the Agent has received notice from any of the Banks by 3:00 p.m.
(Chicago time) four Business Days prior to the day of such Borrowing that such
Bank cannot provide Loans in the requested Offshore Currency, in which event
the Agent will give notice to the applicable Borrower no later than 10:30 a.m.
(Chicago time) on the third Business Day prior to the date of such Borrowing
that the Borrowing in the requested Offshore Currency is not then available,
and notice thereof also will be given promptly by the Agent to the Banks. If
the Agent shall have so notified the applicable Borrower that any such
Borrowing in a requested Offshore Currency is not then available, the
applicable Borrower may, by notice to the Agent not later than 5:00 p.m.
(Chicago time) three Business Days prior to the requested date of such
Borrowing, withdraw the Notice of Borrowing relating to such requested
Borrowing. If the applicable Borrower does so withdraw such Notice of
Borrowing, the Borrowing requested therein shall not occur and the Agent will
promptly notify each Bank. If the applicable Borrower does not so withdraw
such Notice of Borrowing, the Agent will promptly notify each Bank and such
Notice of Borrowing shall be deemed to be a Notice of Borrowing that requests a
Borrowing comprised of Base Rate Loans in an aggregate amount equal to the
amount of the originally requested Borrowing as expressed in Dollars in the
Notice of Borrowing; and in such notice by the Agent to each Bank the Agent
will state such aggregate amount of such Borrowing in Dollars and such Bank's
Pro Rata Share thereof.
(c) In the case of a proposed continuation of Offshore
Currency Loans for an additional Interest Period pursuant to Section 2.4, the
Banks shall be under no obligation to continue such Offshore Currency Loans if
the Agent has received notice from any of the Banks by 3:00 p.m. (Chicago time)
four Business Days prior to the day of such continuation that such Bank cannot
continue to provide Loans in the relevant
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Offshore Currency, in which event the Agent will give notice to the applicable
Borrower not later than 10:30 a.m. (Chicago time) on the third Business Day
prior to the requested date of such continuation that the continuation of such
Offshore Currency Loans in the relevant Offshore Currency is not then
available, and notice thereof also will be given promptly by the Agent to the
Banks. If the Agent shall have so notified the applicable Borrower that any
such continuation of Offshore Currency Loans is not then available, any Notice
of Continuation/Conversion with respect thereto shall be deemed withdrawn and
such Offshore Currency Loans shall be redenominated into Base Rate Loans in
Dollars with effect from the last day of the Interest Period with respect to
any such Offshore Currency Loans. The Agent will promptly notify the
applicable Borrower and the Banks of any such redenomination and in such notice
by the Agent to each Bank the Agent will state the aggregate Dollar Equivalent
amount of the redenominated Offshore Currency Loans as of the Computation Date
with respect thereto and such Bank's Pro Rata Share thereof.
(d) Notwithstanding anything herein to the contrary,
during the existence of a Default or an Event of Default, upon the request of
the Majority Banks, all or any part of any outstanding Offshore Currency Loans
shall be redenominated and converted into Base Rate Loans in Dollars with
effect from the last day of the Interest Period with respect to any such
Offshore Currency Loans. The Agent will promptly notify the applicable
Borrower of any such redenomination and conversion request.
(e) The Borrowers shall be entitled to request that
Revolving Loans hereunder also be permitted to be made in any other lawful
currency constituting a eurocurrency (other than Dollars), in addition to the
eurocurrencies specified in the definition of "Offshore Currency" herein, that
in the opinion of the Agent and the Majority Banks is at such time freely
traded in the offshore interbank foreign exchange markets and is freely
transferable and freely convertible into Dollars (an "Agreed Alternative
Currency"). A Borrower shall deliver to the Agent any request for designation
of an Agreed Alternate Currency in accordance with Section 11.2, to be received
by the Agent not later than 10:30 a.m. (Chicago time) at least ten Business
Days in advance of the date of any Borrowing hereunder proposed to be made in
such Agreed Alternate Currency. Upon receipt of any such request the Agent
will promptly notify the Banks thereof, and each Bank will use its best efforts
to respond to such request within two Business Days of receipt thereof. Each
Bank may grant or accept such request in its sole discretion. The Agent will
promptly notify the applicable Borrower of the acceptance or rejection of any
such request.
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2.6 Reduction of Commitments; Mandatory Prepayments.
(a) Scheduled Reductions. The combined Commitments shall
be automatically and permanently reduced by the amounts and on the dates set
forth below:
Date Amount of Reduction
---- to combined Commitments
-----------------------
December 31, 1996 $7,500,000
December 31, 1997 $7,500,000
December 31, 1998 $7,500,000
December 31, 1999 $7,500,000
Revolving Termination Date Balance
Each reduction of the Commitments shall be applied to each Bank according to
its Pro Rata Share. The Borrowers agree that they will, on or before the date
of any scheduled reduction pursuant to the above table, make a mandatory
prepayment to the Agent in the amount necessary to reduce the sum of (i) the
Dollar Equivalent of the aggregate principal amount of the outstanding
Revolving Loans plus (ii) the LC Obligations to an amount which is less than or
equal to the combined Commitments after giving effect to such scheduled
reduction.
(b) Voluntary Reductions. The Borrowers may, upon not
less than five Business Days' prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an aggregate minimum
Dollar Equivalent amount of $2,000,000 or any Dollar Equivalent multiple of
$1,000,000 in excess thereof; unless, after giving effect thereto and to any
prepayments of Loans made on the effective date thereof, the sum of the
then-outstanding principal Dollar Equivalent amount of the Loans plus the LC
Obligations would exceed the amount of the combined Commitments then in effect.
Once reduced in accordance with this Section, the Commitments may not be
increased. Any reduction of the Commitments shall be applied to each Bank
according to its Pro Rata Share. All accrued commitment fees to, but not
including the effective date of any reduction or termination of Commitments,
shall be paid on the effective date of such reduction or termination.
2.7 Optional Prepayments. Subject to Section 3.4, any Borrower
may, at any time or from time to time, upon not less than 5 Business Days'
irrevocable notice to the Agent, ratably prepay Loans in whole or in part, in
minimum Dollar Equivalent amounts of $1,000,000 or any multiple of 500,000
units of the Applicable Currency in excess thereof. The applicable Borrower
shall deliver a notice of prepayment in accordance with Section 11.2 to be
received by the Agent not later than 10:30 a.m. (Chicago time) (i) at least
four Business Days in advance of the
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prepayment date if the Loans to be prepaid are Offshore Currency Loan or at
least two Business Days in advance of the prepayment date if the Loans to be
prepaid are Offshore Rate Loans in Dollars, and (iii) on the prepayment date if
the Loans to be prepaid are Base Rate Loans. Such notice of prepayment shall
specify the date and amount of such prepayment, the applicable Borrower and
whether such prepayment is of Base Rate Loans, or Offshore Rate Loans, or any
combination thereof, and the Applicable Currency. Such notice shall not
thereafter be revocable by the applicable Borrower and the Agent will promptly
notify each Bank thereof and of such Bank's Pro Rata Share of such prepayment.
If such notice is given by a Borrower, such Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein, together with accrued interest to each such date on the
amount prepaid and any amounts required pursuant to Section 3.4.
2.8 Currency Exchange Fluctuations. Subject to Section 3.4, if on
any Computation Date the Agent shall have determined that the aggregate Dollar
Equivalent principal amount of all Loans then outstanding plus the aggregate
amount of outstanding LC Obligations exceeds the combined Commitments of the
Banks by more than $500,000, due to a change in applicable rates of exchange
between Dollars and Offshore Currencies, then the Agent shall give notice to
the Borrowers that a prepayment is required under this Section, and the
Borrowers, jointly and severally agree thereupon to make prepayments of Loans
such that, after giving effect to such prepayment the aggregate Dollar
Equivalent amount of all Loans plus the aggregate amount of outstanding LC
Obligations does not exceed the combined Commitments.
2.9 Repayment. The Borrowers, jointly and severally, agree to
repay to the Banks on the Revolving Termination Date the aggregate principal
amount of Revolving Loans and all other unpaid Obligations then due and
outstanding on such date.
2.10 Interest. (a) Each Loan shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to the Offshore Rate plus the Applicable Margin or the
Base Rate, as the case may be (and subject to the Borrower's right to convert
to other Types of Loans under Section 2.4).
(b) The applicable Borrower shall pay interest on each
Loan made to it in arrears on each Interest Payment Date. Interest shall also
be paid by the applicable Borrower on the date of any prepayment of Loans under
Section 2.7 or 2.8 for the portion of the Loans so prepaid and upon payment
(including prepayment) in full thereof and, during the existence of any Event
of Default, interest shall be paid by the applicable Borrower on demand of the
Agent at the request or with the consent of the Majority Banks.
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(c) Notwithstanding subsection (a) of this Section, while
any Event of Default exists or after acceleration, the applicable Borrower
shall pay interest (after as well as before entry of judgment thereon to the
extent permitted by law) on the principal amount of all outstanding
Obligations, at a rate per annum which is determined by adding 2% per annum to
the sum of the rate then in effect for such Loans plus the Applicable Margin
and, in the case of Obligations not subject to an Applicable Margin, at a rate
per annum equal to the Base Rate plus 2%; provided, however, that, on and after
the expiration of any Interest Period applicable to any Offshore Rate Loan
outstanding on the date of occurrence of such Event of Default or acceleration,
the principal amount of such Loan shall, during the continuation of such Event
of Default or after acceleration, bear interest at a rate per annum equal to
the Base Rate plus 2%.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Borrowers to any Bank hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank would be contrary
to the provisions of any law applicable to such Bank limiting the highest rate
of interest that may be lawfully contracted for, charged or received by such
Bank, and in such event the Borrowers shall pay such Bank interest at the
highest rate permitted by applicable law.
2.11 Fees. (a) Arrangement, Agency Fees. The Borrowers shall pay
the fees to the Agent for the Agent's own account, as required by the letter
agreement ("Fee Letter") between the Borrowers and the Agent dated June 23,
1995.
(b) Commitment Fees. Filtertek agrees to pay to the
Agent for the account of each Bank a commitment fee on the average daily unused
portion of such Bank's Commitment, computed on a quarterly basis in arrears on
the last Business Day of each calendar quarter based upon the daily utilization
for that quarter as calculated by the Agent, equal to .20% per annum. Such
commitment fee shall accrue from the Closing Date to the Revolving Termination
Date and shall be due and payable quarterly in arrears on the last Business Day
of each calendar quarter commencing on June 30, 1995 through the Revolving
Termination Date, with the final payment to be made on the Revolving
Termination Date; provided that, in connection with any reduction or
termination of Commitments under Section 2.6 or Section 2.8, the accrued
commitment fee calculated for the period ending on such date shall also be paid
on the date of such reduction or termination, with the following quarterly
payment being calculated on the basis of the period from such reduction or
termination date to such quarterly payment date. The commitment fees provided
in this subsection shall accrue at all times after the above-mentioned
commencement date, including
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at any time during which one or more conditions in Article IV are not met.
2.12 Computation of Fees and Interest. (a) All computations of
interest for Base Rate Loans when the Base Rate is determined by BofA's
"reference rate" shall be made on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). Interest and fees shall accrue during each period during which
interest or such fees are computed from the first day thereof to the last day
thereof.
(b) For purposes of determining utilization of each
Bank's Commitment in order to calculate the commitment fee due under Section
2.11(b), the amount of any outstanding Offshore Currency Loan on any date shall
be determined based upon the Dollar Equivalent amount as of the most recent
Computation Date with respect to such Offshore Currency Loan.
(c) Each determination of an interest rate or a Dollar
Equivalent amount by the Agent shall be conclusive and binding on the Borrowers
and the Banks in the absence of manifest error. The Agent will, at the request
of a Borrower or any Bank, deliver to such Borrower or the Bank, as the case
may be, a statement showing the quotations used by the Agent in determining any
interest rate or Dollar Equivalent amount.
2.13 Payments by the Borrowers. (a) All payments to be made by the
Borrowers shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Borrowers shall be
made to the Agent for the account of the Banks at the Agent's Payment Office,
and, with respect to principal of, interest on, and any other amounts relating
to, any Offshore Currency Loan, shall be made in the Offshore Currency in which
such Loan is denominated or payable, and, with respect to all other amounts
payable hereunder, shall be made in Dollars. Such payments shall be made in
Same Day Funds, and (i) in the case of Offshore Currency payments, no later
than such time on the dates specified herein as may be determined by the Agent
to be necessary for such payment to be credited on such date in accordance with
normal banking procedures in the place of payment, and (ii) in the case of any
Dollar payments, no later than 12:00 noon (Chicago time) on the date specified
herein. The Agent will promptly distribute to each Bank its Pro Rata Share (or
other applicable share as expressly provided herein) of such principal,
interest, fees or other amounts, in like funds as received. Any payment which
is received by the Agent later than 12:00 noon (Chicago time), or later than
the time specified by the Agent as provided in clause (i) above (in the case of
Offshore Currency payments), shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue.
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(b) Subject to the provisions set forth in the definition
of "Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Agent receives notice from the applicable
Borrower prior to the date on which any payment is due to the Banks that the
applicable Borrower will not make such payment in full as and when required,
the Agent may assume that the applicable Borrower has made such payment in full
to the Agent on such date in Same Day Funds and the Agent may (but shall not be
so required), in reliance upon such assumption, distribute to each Bank on such
due date an amount equal to the amount then due such Bank. If and to the
extent the Borrower has not made such payment in full to the Agent, each Bank
shall repay to the Agent on demand such amount distributed to such Bank,
together with interest thereon at the Federal Funds Rate or, in the case of a
payment in an Offshore Currency, the Overnight Rate, for each day from the date
such amount is distributed to such Bank until the date repaid.
(d) All payments on account of or with respect to any
Note and the principal of, and interest on, the Loans, the Letters of Credit
and all other amounts payable under this Agreement by any Borrower to the
Agent, any Issuing Bank or any Bank shall be made in the Applicable Currency,
without set-off or counterclaim and free and clear of and without reduction by
reason of all present and future income, stamp and other taxes and levies,
imposts, duties, deductions, charges, compulsory loans and withholdings
whatsoever imposed, assessed, levied or collected by the U.S., any state or
local government, any foreign government, any territory or possession of the
U.S. or any political subdivision of taxing authority thereof or therein,
together with interest thereon and penalties with respect thereto, if any, on
or in respect of this Agreement, the Loans, any Note, any Letter of Credit, the
registration, notarization or other formalization of any thereof, and any
payments of principal, interest, charges, fees or other amounts made on, under
or in respect thereof, other than any tax on or measured by the overall net
income of a Bank pursuant to the income tax laws of the United States or the
jurisdictions where such Bank's principal or lending offices are located
(hereinafter called "Taxes"), all of which will be paid by such Borrower, for
its own account, prior to the date on which any interest or penalties attach
thereto.
(e) Each Borrower will indemnify the Agent and each Bank
against, and reimburse the Agent and each Bank on demand for, any Taxes and any
loss, liability, claim, or expense including interest, penalties, and legal
fees which the Agent or the Bank may incur at any time arising out of or in
connection with any failure of such Borrower to make any payments of Taxes when
due.
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(f) In the event that any Borrower is required by
applicable law, decree or regulation to deduct or withhold Taxes from any
amounts payable on, under or in respect of this Agreement, under any Note or
Letter of Credit, such Borrower shall pay in United States Dollars such
additional amount as may be required, after the deduction or withholding of
Taxes, to enable the Agent or the Issuing Banks, as the case may be, to receive
from such Borrower an amount equal to the amount stated to be payable under or
with respect to this Agreement, any Note or Letter of Credit.
(g) Each Borrower shall promptly furnish to the Agent
original tax receipts in respect of any withholding of Taxes required under
this Section 3.9 and any other information, documents and receipts that the
Agent may, in its sole discretion from time to time, require to establish to
its satisfaction that full and timely payment has been made of all Taxes
required to be paid under this Section 3.9.
(h) The covenants and agreements of the Borrowers under
this Section 2.13 shall survive the repayment of the Obligations and the Notes.
2.14 Payments by the Banks to the Agent. (a) Unless the Agent
receives notice from a Bank on or prior to the Closing Date or, with respect to
any Borrowing after the Closing Date, at least one Business Day prior to the
date of such Borrowing, that such Bank will not make available as and when
required hereunder to the Agent for the account of the Borrower the amount of
that Bank's Pro Rata Share of the Borrowing, the Agent may assume that each
Bank has made such amount available to the Agent in Same Day Funds on the
Borrowing Date and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent any Bank shall not have made its
full amount available to the Agent in Same Day Funds and the Agent in such
circumstances has made available to the Borrower such amount, that Bank shall
on the Business Day following such Borrowing Date make such amount available to
the Agent, together with interest at the Federal Funds Rate or, in the case of
any Borrowing consisting of Offshore Currency Loans, the Overnight Rate, for
each day during such period. A notice of the Agent submitted to any Bank with
respect to amounts owing under this subsection 2.14(a) shall be conclusive,
absent manifest error. If such amount is so made available, such payment to
the Agent shall constitute such Bank's Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available to the Agent
on the Business Day following the Borrowing Date, the Agent will notify the
Borrowers of such failure to fund and, upon demand by the Agent, the Borrowers,
jointly and severally, agree to pay such amount to the Agent for the Agent's
account, together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate applicable at
the time to the Loans comprising such Borrowing.
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(b) The failure of any Bank to make any Loan on any
Borrowing Date shall not relieve any other Bank of any obligation hereunder to
make a Loan on such Borrowing Date, but no Bank shall be responsible for the
failure of any other Bank to make the Loan to be made by such other Bank on any
Borrowing Date.
2.15 Sharing of Payments, Etc. If, other than as expressly
provided elsewhere herein, any Bank shall obtain on account of the Loans made
by it any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its Pro Rata Share, such Bank
shall immediately (a) notify the Agent of such fact, and (b) purchase from the
other Banks such participations in the Loans made by them as shall be necessary
to cause such purchasing Bank to share the excess payment pro rata with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with an amount equal to such paying
Bank's ratable share (according to the proportion of (i) the amount of such
paying Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Borrowers
agree that any Bank so purchasing a participation from another Bank may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 11.9) with respect to such
participation as fully as if such Bank were the direct creditor of the Borrower
in the amount of such participation. The Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks following
any such purchases or repayments.
2.16 Amount and Terms of Letters of Credit.
(a) Letter of Credit Commitments; Terms of Letters of Credit.
(i) Subject to and upon the terms and conditions herein
set forth, at any time and from time to time on or after the date
hereof and to but not including a date which is thirty (30) days prior
to the Revolving Termination Date, each Bank selected by a Borrower
which is reasonably acceptable to the Agent (and which agrees to
perform the services of a fronting bank) agrees to issue (in such
capacity, an "Issuing Bank") in its own name or through an Affiliate,
one or more Letters of Credit for the account of the applicable
Borrower in an aggregate Stated Amount in Dollars at any one time
that, together with the aggregate Stated Amount of all other Letters
of Credit issued pursuant hereto, does not exceed the Letter of Credit
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Commitment Sublimit; provided, however, that no Issuing Bank
shall issue or extend the expiration of any Letter of Credit if,
immediately after giving effect to such issuance or extension, (A) the
aggregate LC Obligations in respect of Letters of Credit at such time
would exceed the Letter of Credit Commitment Sublimit or (B) the
Commitment of any Bank would be exceeded or (C) the Agent has not
approved such issuance. Each Bank severally, but not jointly, agrees
to participate in each such Letter of Credit issued by an Issuing Bank
ratably according to its Pro Rata Share and to make available to such
Issuing Bank such Bank's Pro Rata Share of any payment made to the
beneficiary of such Letter of Credit to the extent not reimbursed by
the applicable Borrower; provided, however, that no Bank shall be
required to participate in any Letter of Credit to the extent that its
participation therein would exceed such Bank's Commitment then in
effect. No Bank's obligation to participate in any Letter of Credit
or to make available to an Issuing Bank such Bank's Pro Rata Share of
any Letter of Credit Payment made by the Issuing Bank shall be
affected by any other Bank's failure to participate in the same or any
other Letter of Credit or by any other Bank's failure to make
available to the relevant Issuing Bank such other Bank's Pro Rata
Share of any Letter of Credit Payment.
No Standby Letter of Credit or renewal thereof shall be dated
to expire later than the Revolving Termination Date and no Trade
Letter of Credit or renewal thereof shall be stated to expire later
than the day thirty (30) days prior to the Revolving Termination Date.
(b) Procedure for Issuance of Letters of Credit. Whenever a
Borrower desires the issuance of a Letter of Credit hereunder, it shall give
the relevant Issuing Bank (with a copy to the Agent) at least five (5) Business
Days' prior written notice specifying the requested day of issuance thereof
(which day shall be a Business Day), such notice to be given prior to 10:00
a.m. (Chicago time) on the date specified for the giving of such notice. Each
such notice (each, a "Letter of Credit Request") shall be in the form of
Exhibit J hereto and shall specify (A) the name of the Bank which the
applicable Borrower would like to act as the Issuing Bank, (B) the proposed
issuance date and expiration date of the requested Letter of Credit, (C) the
name and address of the beneficiary (which Person shall be reasonably
acceptable to the Issuing Bank), (D) the Stated Amount of such Letter of
Credit, (E) the purpose of such Letter of Credit (which shall be acceptable to
the Issuing Bank), and (F) such other information as the Agent or the Issuing
Bank may reasonably request. The Agent shall notify the Banks as to issuance
of Letters of Credit hereunder. In addition, each Letter of Credit Request
shall contain a description of the terms and conditions to be included in the
proposed Letter of Credit (all of which terms and conditions shall be
acceptable to the Issuing Bank). No Letter of Credit shall contain any
provision for payment thereunder at any time earlier than 2:00
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p.m. (Chicago time) on the first Business Day after the presentation of all
drafts, demands for payment and all other documents, if any, required to be
presented pursuant to such Letter of Credit. Unless otherwise specified, all
Letters of Credit will be governed by the Uniform Customs and Practice for
Documentary Credits of the International Chamber of Commerce as in effect on
the date of issuance of such Letter of Credit. On the Business Day specified
by the applicable Borrower and upon fulfillment or waiver of the applicable
conditions set forth in Article IV, the Issuing Bank will issue the requested
Letter of Credit to the applicable beneficiary.
(c) Draws upon Letters of Credit; Reimbursement Obligations. In
the event of any request for drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Bank shall give telephonic notice to the
applicable Borrower and the Agent (x) confirming receipt of such request and
(y) of the date on or before which the Issuing Bank intends to honor such
drawing, and the applicable Borrower shall reimburse the Agent for the account
of the Issuing Bank on the day on which such drawing is honored in an amount in
Dollars in same day funds equal to the amount of such drawing; provided,
however, that, anything contained in this Agreement to the contrary
notwithstanding, (i) unless the applicable Borrower shall have notified the
Agent and the Issuing Bank prior to 10:00 a.m. (Chicago time) on the Business
Day of such drawing that the applicable Borrower intends to reimburse the Agent
for the account of the Issuing Bank for the amount of such drawing with funds
other than the proceeds of Loans, the applicable Borrower shall be deemed to
have timely given a Notice of Borrowing to the Agent requesting each Bank to
make Loans on the date on which such drawing is honored in an amount equal to
the amount of such drawing and (ii) subject to satisfaction or waiver of the
conditions specified in Section 4.2, each such Bank shall, on the date of such
drawing, make Base Rate Loans in the amount of its Pro Rata Share of such
drawing, the proceeds of which shall be applied directly by the Agent to
reimburse the Issuing Bank for the amount of such drawing; provided, further,
that, if for any reason, proceeds of Base Rate Loans are not received by the
Issuing Bank on such date in an amount equal to the amount of such drawing, the
applicable Borrower shall reimburse the Issuing Bank, on the Business Day
immediately following the date of such drawing, in an amount in Same Day Funds
equal to the excess of the amount of such drawing over the amount of such Base
Rate Loans, if any, which are so received, plus accrued interest on such amount
at the Base Rate.
(d) Banks' Participation in Letters of Credit. In the event that
the Borrowers shall fail to reimburse the Agent for the account of the Issuing
Bank as provided in Section 2.16(c) in an amount equal to the amount of any
drawing honored by the Issuing Bank under a Letter of Credit issued by it in
accordance with the terms hereof, the Agent shall promptly notify each Bank of
the unreimbursed amount of such drawing and of such Bank's respective
participation therein. Each such Bank shall make
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available to the Agent for the account of the Issuing Bank an amount equal to
its Pro Rata Share of such drawing in same day funds, together with interest
thereon at the Federal Funds Rate for the period from the date of funding of
such drawing to the date of payment by such Bank, at the office of the Agent
specified in such notice, not later than 1:00 p.m. (Chicago time) on the
Business Day after the date such Bank is notified by the Agent. In the event
that any such Bank fails to make available to the Agent for the account of the
Issuing Bank the amount of such Bank's participation in such Letter of Credit
as provided in this Section 2.16(d), the Agent shall be entitled to recover
such amount for the benefit of the Issuing Bank on demand from such Bank
together with interest at the Federal Funds Rate for two Business Days and
thereafter at the Base Rate. Nothing in this Section 2.16(d) shall be deemed
to prejudice the right of any Bank to recover from the Issuing Bank any amounts
made available by such Bank to the Issuing Bank pursuant to this Section
2.16(d) in the event that it is determined by a court of competent jurisdiction
that the payment with respect to a Letter of Credit by the Issuing Bank in
respect of which payment was made by such Bank constituted gross negligence or
willful misconduct on the part of the Issuing Bank. The Issuing Bank shall
distribute to the Agent for the account of each Bank which has paid all amounts
payable by it under this Section 2.16(d) with respect to any Letter of Credit
issued by such Issuing Bank such Bank's Pro Rata Share of all payments received
by such Issuing Bank from the applicable Borrower in reimbursement of drawings
honored by such Issuing Bank under such Letter of Credit when such payments are
received and shall promptly notify the Agent of such payment.
(e) Interest and Fees for Letters of Credit.
(i) Issuing Bank Fees. The applicable Borrower agrees to
pay the following amount to the Agent for the account of each Issuing
Bank with respect to Letters of Credit issued for the account of such
Borrower:
(A) with respect to drawings made under any
Letter of Credit, interest, payable on demand, on the amount
paid by such Issuing Bank in respect of each such drawing from
the date of the drawing through the date such amount is
reimbursed by the Borrowers (including any such reimbursement
out of the proceeds of Loans pursuant to Section 2.16(c)) or
the Banks at a rate which is at all times equal to 2% per
annum in excess of the Base Rate; and
(B) with respect to the issuance or amendment of
each Letter of Credit and each drawing made thereunder,
issuance, documentary and processing charges in accordance
with the Issuing Bank's agreement with the Borrower for such
charges in effect at the time of such issuance, amendment,
transfer or drawing, as the case may be; and
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(ii) Participating Bank Fees. The applicable Borrower
shall pay to the Agent, for the ratable account of the Lenders, based
upon the Lenders' respective Pro Rata Shares, a fee (the "LC
Commission") with respect to each (i) Letter of Credit that is a
Standby Letter of Credit, for the period from the Issuance Date
thereof to but including the final expiration date thereof, in an
amount equal to the product of (A) the average daily undrawn amount of
such Letter of Credit times (B) .75% per annum where such Letter of
Credit has a term of 1 year or more or .625% in any other case and
(ii) Letter of Credit that is a Trade Letter of Credit, in an amount
equal to the greater of $150 or .50% of the face amount of such Letter
of Credit. The LC Commission (i) relating to any Standby Letter of
Credit shall be due and payable in arrears on the last Business Day of
each calendar quarter, to the extent any such fees are then due and
unpaid, on the Revolving Termination Date and (ii) relating to any
Trade Letter of Credit shall be due and payable on the Issuance Date.
The Agent shall promptly remit such LC Commission, when paid, to the
other Lenders in accordance with their Pro Rata Share thereof.
Promptly upon receipt by the Agent of any amount described in clause
(i)(A) of this Section 2.16(e), the Agent shall distribute to each Bank that
has reimbursed the Agent for the account of the Issuing Bank in accordance with
Section 2.16(d) its Pro Rata Share of such amount. Amounts payable under
clauses (i)(B) of this Section 2.16(e) shall be payable directly to the Agent
for the account of the Issuing Bank.
(f) LC Obligations Unconditional. Subject to the last paragraph
of Section 2.16(g), the obligation of the Borrowers to reimburse the Agent for
the account of the Issuing Bank for drawings made under any Letter of Credit
issued by such Issuing Bank and the obligations of each Bank under Section
2.16(d) with respect thereto shall be unconditional and irrevocable and shall
be paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following circumstances:
(i) any lack of validity or enforceability of such Letter
of Credit;
(ii) the existence of any claim, setoff, defense or other
right which the Borrowers or any of their Affiliates may have at any
time against a beneficiary or any transferee of such Letter of Credit
(or any Persons for which any such beneficiary or transferee may be
acting), the Issuing Bank, any Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction
between a Borrower or one of its Subsidiaries and the beneficiary of
such Letter of Credit);
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(iii) any draft, demand, certificate or any other document
presented under such 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) payment by the Issuing Bank under such Letter of
Credit against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of
Credit;
(v) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(vi) the fact that an Event of Default or a Default shall
have occurred and be continuing.
(g) Indemnification. In addition to amounts payable as elsewhere
provided in this Agreement, the Borrowers, jointly and severally hereby agree
to indemnify and hold harmless, the Issuing Bank from and against any and all
actions, suits, proceedings, liabilities, damages, or other claims of any kind
or nature whatsoever which may be made by or asserted against the Issuing Bank
as a result of (i) the issuance of the Letters of Credit, other than as a
result of the gross negligence or willful misconduct of the Issuing Bank or
(ii) the failure of the Issuing Bank to honor a drawing under any Letter of
Credit as a result of any act or omissions, whether rightful or wrongful, of
any present or future de jure or de facto government or Governmental Authority
(all such acts or omissions herein called "Government Acts"). As between the
Borrowers and the Issuing Bank, the Borrowers assume all risks of the acts and
omissions of, or misuse of the Letters of Credit issued by the Issuing Bank by,
the respective beneficiaries of such Letters of Credit. In furtherance and not
in limitation of the foregoing, the Issuing Bank shall not be responsible: (i)
for the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for and
issuance of or any drawing under such Letters of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter
of Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason; (iii) for
failure of the beneficiary of any such Letter of Credit to comply fully with
conditions required in order to draw upon such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher, (v) for errors in interpretation of technical terms; (vi) for any
loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any such
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Letter of Credit or of the proceeds thereof; (vii) for the misapplication by
the beneficiary of any such Letter of Credit or the proceeds of any drawing
under such Letter of Credit; and (viii) for any consequences arising from
causes beyond the control of the Issuing Bank (including any Government Acts).
None of the above shall affect, impair, or prevent the vesting of any of the
Issuing Bank's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Bank under or in connection with the Letters of Credit issued by it or the
related certificates, if taken or omitted in good faith, shall not put the
Issuing Bank under any resulting liability to the Borrowers. Notwithstanding
anything to the contrary contained in this Agreement, the Borrowers shall have
no obligation to indemnify the Issuing Bank in respect of any liability
incurred by the Issuing Bank arising solely out of the gross negligence or
willful misconduct of the Issuing Bank. The right of indemnification in the
first paragraph of this Section 2.16(g) shall not prejudice any rights that the
Borrowers may otherwise have against the Issuing Bank with respect to a Letter
of Credit issued hereunder.
(h) Stated Amount. The Stated Amount of each Letter of Credit
shall be such amount as the applicable Borrower and the Issuing Bank have
agreed to. For purposes of calculating the Stated Amount of any Letter of
Credit at any time:
(i) any increase in the Stated Amount of any Letter of
Credit by reason of any amendment to any Letter of Credit shall be
deemed effective under this Agreement as of the date the Issuing Bank
actually issues an amendment purporting to increase the Stated Amount
of such Letter of Credit in accordance with the terms hereof, whether
or not the Issuing Bank receives the consent of the Letter of Credit
beneficiary or beneficiaries to the amendment, provided that any
amendment which increases or renews such Letter of Credit shall be
subject to the requirements of Section 2.16(b) as if it where a new
issuance; and
(ii) any reduction in the Stated Amount of any Letter of
Credit by reason of any amendment to any Letter of Credit shall be
deemed effective under this Agreement as of the later of (x) the date
the Issuing Bank actually issues an amendment purporting to reduce the
Stated Amount of such Letter of Credit, whether or not the amendment
provides that the reduction be given effect as of an earlier date, or
(y) the date the Issuing Bank receives the written consent (including
by telex or facsimile transmission) of the Letter of Credit
beneficiary or beneficiaries to such reduction, which written consent
must be dated on or after the date of the amendment issued by the
Issuing Bank purporting to effect such reduction.
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ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes. (a) Any and all payments by any Borrower to each Bank
or the Agent under this Agreement and any other Loan Document shall be made
free and clear of, and without deduction or withholding for any Taxes. In
addition, the Borrowers shall pay all Other Taxes.
(b) The Borrowers, jointly and severally agree to
indemnify and hold harmless each Bank and the Agent for the full amount of
Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section) paid by the Bank or the
Agent and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date the Bank or the
Agent makes written demand therefor.
(c) If any Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Bank or the Agent, then:
(i) the sum payable shall be increased as
necessary so that after making all required deductions and
withholdings (including deductions and withholdings applicable to
additional sums payable under this Section) such Bank or the Agent, as
the case may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made;
(ii) the applicable Borrower shall make such
deductions and withholdings;
(iii) the applicable Borrower shall pay the full
amount deducted or withheld to the relevant taxing authority or other
authority in accordance with applicable law; and
(iv) the applicable Borrower shall also pay to
each Bank or the Agent for the account of such Bank, at the time
interest is paid, all additional amounts which the respective Bank
specifies in writing in reasonable detail as necessary to preserve the
after-tax yield the Bank would have received if such Taxes or Other
Taxes had not been imposed.
(d) Within 30 days after the date of any payment by a
Borrower of Taxes or Other Taxes, such Borrower shall furnish
the Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to the
Agent.
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(e) If a Borrower is required to pay additional amounts
to any Bank or the Agent pursuant to subsection (c) of this Section, then such
Bank shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by such Borrower which may thereafter
accrue, if such change in the judgment of such Bank is not otherwise
disadvantageous to such Bank or take such other non-disadvantageous action, if
any, which, in its sole discretion, it may deem appropriate to eliminate any
such additional payment.
3.2 Illegality. (a) If any Bank determines that the introduction
of any Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans (including Offshore Rate Loans in any Applicable Currency),
then, on notice thereof by the Bank to the Borrowers through the Agent, any
obligation of that Bank to make Offshore Rate Loans shall be suspended until
the Bank notifies the Agent and the Borrowers that the circumstances giving
rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain
any Offshore Rate Loan, the Borrowers shall, upon receipt of notice of such
fact and demand from such Bank (with a copy to the Agent), prepay in full such
Offshore Rate Loans of that Bank then outstanding, together with interest
accrued thereon and amounts required under Section 3.4, either on the last day
of the Interest Period thereof, if the Bank may lawfully continue to maintain
such Offshore Rate Loans to such day, or immediately, if the Bank may not
lawfully continue to maintain such Offshore Rate Loan. If any Borrower is
required to so prepay any Offshore Rate Loan, then concurrently with such
prepayment, such Borrower shall borrow from the affected Bank, in the amount of
such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain
Offshore Rate Loans has been so terminated or suspended, the Borrowers may
elect, by giving notice to the Bank through the Agent that all Loans which
would otherwise be made by the Bank as Offshore Rate Loans shall be instead
Base Rate Loans.
(d) Before giving any notice to the Agent under this
Section, the affected Bank shall designate a different Lending Office with
respect to its Offshore Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in the judgment of the
Bank, be illegal or otherwise disadvantageous to the Bank.
3.3 Increased Costs and Reduction of Return. (a) If any Bank
determines that, due to either (i) the introduction of or any change (other
than any change by way of imposition of or
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increase in reserve requirements included in the calculation of the Offshore
Rate or in respect of the assessment rate payable by any Bank to the FDIC for
insuring U.S. deposits) in or in the interpretation of any law or regulation or
(ii) the compliance by that Bank with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law),
there shall be any increase in the cost to such Bank of agreeing to make or
making, funding or maintaining any Offshore Rate Loans, then the Borrowers
shall be liable for, and shall from time to time, upon demand (with a copy of
such demand to be sent to the Agent), pay to the Agent for the account of such
Bank, additional amounts as are sufficient to compensate such Bank for such
increased costs.
(b) If any Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration
of any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by the Bank (or its Lending Office) or any corporation controlling
the Bank with any Capital Adequacy Regulation, affects or would affect the
amount of capital required or expected to be maintained by the Bank or any
corporation controlling the Bank and (taking into consideration such Bank's or
such corporation's policies with respect to capital adequacy and such Bank's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitment[s], loans, credits or obligations
under this Agreement, then, upon demand of such Bank to the Borrowers through
the Agent, the Borrowers shall pay to the Bank, from time to time as specified
by the Bank, additional amounts sufficient to compensate the Bank for such
increase.
3.4 Funding Losses. The Borrowers shall reimburse each Bank and
hold each Bank harmless from any loss or expense which the Bank may sustain or
incur as a consequence of:
(a) the failure of any Borrower to make on a timely basis
any payment of principal of any Offshore Rate Loan;
(b) the failure of any Borrower to borrow, continue or
convert a Loan after such Borrower has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Conversion/ Continuation;
(c) the failure of any Borrower to make any prepayment in
accordance with any notice delivered under Section 2.7;
(d) the prepayment (including pursuant to Section 2.7 or
2.8) or other payment (including after acceleration thereof) of an Offshore
Rate Loan on a day that is not the last day of the relevant Interest Period; or
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(e) the automatic conversion under Section 2.4 of any
Offshore Rate Loan to a Base Rate Loan on a day that is not the last day of the
relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees
payable to terminate the deposits from which such funds were obtained or from
charges relating to any Offshore Currency Loans. For purposes of calculating
amounts payable by a Borrower to the Banks under this Section and under
subsection 3.3(a), each Offshore Rate Loan made by a Bank (and each related
reserve, special deposit or similar requirement) shall be conclusively deemed
to have been funded at the IBOR used in determining the Offshore Rate for such
Offshore Rate Loan by a matching deposit or other borrowing in the interbank
offshore market for a comparable amount and for a comparable period, whether or
not such Offshore Rate Loan is in fact so funded.
3.5 Inability to Determine Rates. If the Agent determines that
for any reason adequate and reasonable means do not exist for determining the
Offshore Rate for any requested Interest Period with respect to a proposed
Offshore Rate Loan, or that the Offshore Rate applicable pursuant to subsection
2.9(a) for any requested Interest Period with respect to a proposed Offshore
Rate Loan does not adequately and fairly reflect the cost to the Banks of
funding such Loan, the Agent will promptly so notify the Borrowers and each
Bank. Thereafter, the obligation of the Banks to make or maintain Offshore
Rate Loans, as the case may be, hereunder shall be suspended until the Agent
upon the instruction of the Majority Banks revokes such notice in writing.
Upon receipt of such notice, any Borrower may revoke any Notice of Borrowing or
Notice of Conversion/ Continuation then submitted by it. If the applicable
Borrower does not revoke such Notice, the Banks shall make, convert or continue
the Loans, as proposed by such Borrower, in the amount specified in the
applicable notice submitted by such Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of Offshore Rate Loans. In
the case of any Offshore Currency Loans, the Borrowing or continuation shall be
in an aggregate amount equal to the Dollar Equivalent amount of the originally
requested Borrowing or continuation in the Offshore Currency, and to that end
any outstanding Offshore Currency Loans which are the subject of any
continuation shall be redenominated and converted into Base Rate Loans in
Dollars with effect from the last day of the Interest Period with respect to
any such Offshore Currency Loans.
3.6 Certificates of Banks. Any Bank claiming reimbursement or
compensation under this Article III shall deliver to the Borrowers (with a copy
to the Agent) a certificate setting forth in reasonable detail the amount
payable to the Bank hereunder and such certificate shall be conclusive and
binding on the Borrowers in the absence of manifest error.
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3.7 Substitution of Banks. Upon the receipt by a Borrower from
any Bank (an "Affected Bank") of a claim for compensation under Section 3.3,
such Borrower may: (i) request the Affected Bank to use its best efforts to
obtain a replacement bank or financial institution satisfactory to the
Borrowers to acquire and assume all or a ratable part of all of such Affected
Bank's Loans and Commitment (a "Replacement Bank"); (ii) request one more of
the other Banks to acquire and assume all or part of such Affected Bank's Loans
and Commitment; or (iii) designate a Replacement Bank. Any such designation of
a Replacement Bank under clause (i) or (iii) shall be subject to the prior
written consent of the Agent (which consent shall not be unreasonably
withheld).
3.8 Survival. The agreements and obligations of the Borrowers in
this Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions of Initial Loans. The obligation of each Bank to
make its initial Loan or participate in its initial Letter of Credit hereunder
is subject to the condition that the Agent have received on or before the
Closing Date all of the following, in form and substance satisfactory to the
Agent and each Bank, and in sufficient copies for each Bank:
(a) Loan Documents.
(i) this Agreement, executed and delivered by a
duly authorized officer of the Company and of Filtertek;
(ii) for the account of each Bank, a Note
conforming to the requirements hereof and executed by a duly
authorized officer of the Company and of Filtertek;
(iii) the Intercompany Note Pledge Agreement executed
and delivered by a duly authorized officer of the Company and each
Domestic Subsidiary in favor of the Agent for the benefit of the
Banks; and
(iv) the Subsidiary Guarantee Agreement, executed
and delivered by a duly authorized officer of each of the Subsidiary
Guarantors party thereto; and
(v) the Intercreditor and Subordination Agreement
in substantially the form of Exhibit I executed and delivered by
Xxxxxxxx X. Xxxxxx, and a duly authorized officer of each of the
Borrowers.
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(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of
directors of the Company, Filtertek and each Subsidiary Guarantor
authorizing the transactions contemplated hereby, certified as of the
Closing Date by the Secretary or an Assistant Secretary of the
Company, Filtertek or each Subsidiary Guarantor, as the case may be;
and
(ii) A certificate of the Secretary or Assistant
Secretary of the Company, Filtertek and each Subsidiary Guarantor
certifying the names and true signatures of the officers of the
Company, Filtertek or such Subsidiary authorized to execute, deliver
and perform, as applicable, this Agreement, and all other Loan
Documents to be delivered by it hereunder;
(c) Organization Documents; Good Standing. Each of the
following documents:
(i) the articles or certificate of incorporation
and the bylaws of the Company, Filtertek and each Subsidiary Guarantor
as in effect on the Closing Date, certified by the Secretary or
Assistant Secretary of such person as of the Closing Date; and
(ii) a good standing certificate for the Company,
Filtertek and each Subsidiary Guarantor from the Secretary of State
(or similar, applicable Governmental Authority) of its state of
incorporation and each state where the Company, Filtertek or such
Subsidiary is qualified to do business as a foreign corporation as of
a recent date, together with bring-down certificates by facsimile,
dated the Closing Date;
(d) Legal Opinion. An opinion of Xxxxxx Price Xxxxxxx &
Kammholz, counsel to the Company, Filtertek and the Subsidiary Guarantors and
addressed to the Agent and the Banks, substantially in the form of Exhibit D;
(e) Payment of Fees. Evidence of payment by the
Borrowers of all accrued and unpaid fees, costs and expenses to the extent then
due and payable on the Closing Date, together with Attorney Costs of BofA to
the extent invoiced prior to or on the Closing Date, plus such additional
amounts of Attorney Costs as shall constitute BofA's reasonable estimate of
Attorney Costs incurred or to be incurred by it through the closing proceedings
(provided that such estimate shall not thereafter preclude final settling of
accounts between the Borrowers and BofA); including any such costs, fees and
expenses arising under or referenced in Sections 2.10 and 11.4;
(f) Certificate. A certificate signed by a Responsible
Officer, dated as of the Closing Date, stating that:
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(i) the representations and warranties contained
in Article V are true and correct on and as of such date, as though
made on and as of such date;
(ii) no Default or Event of Default exists or
would result from the initial Borrowing; and
(iii) there has occurred since December 31, 1994,
no event or circumstance that has resulted or could reasonably be
expected to result in a Material Adverse Effect;
(g) Termination of Existing Credit Agreements. On or
prior to the date of the Initial Loan, the total commitments under each of the
Existing Credit Agreements shall have been terminated, all loans thereunder
shall have been repaid in full, together with interest thereon, all letters of
credit, if any, issued thereunder shall have been terminated and all other
amounts owing pursuant to the Existing Credit Agreement shall have been
terminated on terms and conditions satisfactory to Agent and the Banks and be
of no further force or effect.
(h) Other Documents. Such other approvals, opinions,
documents or materials as the Agent or any Bank may request.
4.2 Conditions to All Borrowings and Letter of Credit Issuances.
The obligation of each Bank to make any Loan to be made by it (including its
initial Loan) and of any Issuing Bank to issue, and of each Bank to participate
in, a Letter of Credit is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date:
(a) Notice of Borrowing or Issuance. The Agent shall
have received a Notice of Borrowing or in the case of any Letter of Credit
issuance, the Agent and the Issuing Bank shall have received a Letter of Credit
Request;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article V shall be true and correct on and as
of such Borrowing Date with the same effect as if made on and as of such
Borrowing Date (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and
correct as of such earlier date); and
(c) No Existing Default. No Default or Event of Default
shall exist or shall result from such Borrowing or issuance of such Letter of
Credit.
Each Notice of Borrowing and Letter of Credit Request submitted by a Borrower
hereunder shall constitute a representation and warranty by the Borrowers
hereunder, as of the date of each such notice and as of each Borrowing Date or
date of issuance, as the case may be, that the conditions in Section 4.2 are
satisfied.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrowers, jointly and severally represent and warrant to the
Agent and each Bank that:
5.1 Corporate Existence and Power. The Company and each of its
Subsidiaries:
(a) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental
licenses, authorizations, consents and approvals to own its assets, carry on
its business and to execute, deliver, and perform its obligations under the
Loan Documents;
(c) is duly qualified as a foreign corporation and is
licensed and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification or license except where the failure to be so
qualified would not have a Material Adverse Effect; and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clause (c) or clause (d), to the extent
that the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
5.2 Corporate Authorization; No Contravention. The execution,
delivery and performance by the Borrowers of this Agreement and each other Loan
Document to which any Borrower is party, have been duly authorized by all
necessary corporate action, and do not and will not:
(a) contravene the terms of any of the Company's or its
Subsidiaries' Organization Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any document evidencing
any Contractual Obligation to which the Company or any of its Subsidiaries is a
party or any order, injunction, writ or decree of any Governmental Authority to
which the Company or its Subsidiaries or their property is subject; or
(c) violate any Requirement of Law.
5.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or
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enforcement against, the Company or any of its Subsidiaries of the Agreement or
any other Loan Document.
5.4 Binding Effect. This Agreement and each other Loan Document
to which a Borrower is a party constitute the legal, valid and binding
obligations of such Borrower, enforceable against such Borrower in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability.
5.5 Litigation. Except as specifically disclosed in Schedule 5.5,
there are no actions, suits, proceedings, claims or disputes pending, or to the
best knowledge of any Borrower, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, against the Company, or
its Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or thereby;
or
(b) if determined adversely to the Company or its
Subsidiaries, would reasonably be expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin
or restrain the execution, delivery or performance of this Agreement or any
other Loan Document, or directing that the transactions provided for herein or
therein not be consummated as herein or therein provided.
5.6 No Default. No Default or Event of Default exists or would
result from the incurring of any Obligations by the Borrowers. As of the
Closing Date, neither the Company nor any Subsidiary is in default under or
with respect to any Contractual Obligation in any respect which, individually
or together with all such defaults, could reasonably be expected to have a
Material Adverse Effect, or that would, if such default had occurred after the
Closing Date, create an Event of Default under subsection 8.1(e).
5.7 ERISA Compliance. Except as specifically disclosed in
Schedule 5.7:
(a) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or state
law. Each Plan which is intended to qualify under Section 401(a) of the Code
has received a favorable determination letter from the IRS and to the best
knowledge of the Borrowers, nothing has occurred which would cause the loss of
such qualification. Each of the Borrowers and each ERISA Affiliate has made
all required contributions to any Plan subject to Section 412 of the Code, and
no application
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for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of
Borrowers, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect. There has been
no prohibited transaction or violation of the fiduciary responsibility rules
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither the Company, Filtertek nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with respect
to any Pension Plan (other than premiums due and not delinquent under Section
4007 of ERISA); (iv) neither the Company, Filtertek nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither the Company, Filtertek nor any ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.
5.8 Use of Proceeds; Margin Regulations. The proceeds of the
Loans are to be used solely for the purposes set forth in and permitted by
Section 6.12 and Section 7.7. Neither the Company nor any Subsidiary is
generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
5.9 Title to Properties. The Company and each Subsidiary have
good record and marketable title in fee simple to, or valid leasehold interests
in, all real property necessary or used in the ordinary conduct of their
respective businesses, except for such defects in title as could not,
individually or in the aggregate, have a Material Adverse Effect. As of the
Closing Date, the property of the Company and its Subsidiaries is subject to no
Liens, other than Permitted Liens.
5.10 Taxes. The Company and its Subsidiaries have filed all
Federal and other material tax returns and reports required to be filed, and
have paid all Federal and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
the Company or any Subsidiary that would, if made, have a Material Adverse
Effect.
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5.11 Financial Condition. (a) The audited consolidated financial
statements of the Company and its Subsidiaries dated December 31, 1994 and the
unaudited consolidated financial statements of the Company and its Subsidiaries
dated March 31, 1995, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for the fiscal period ended on
such dates:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein and except, in the case of interim
statements, for normal year-end adjustments;
(ii) fairly present the financial condition of the
Company and its Subsidiaries as of the date thereof and results of
operations for the period covered thereby; and
(iii) except as specifically disclosed in Schedule
5.11, show all material indebtedness and other liabilities, direct or
contingent, of the Company and its consolidated Subsidiaries as of the
date thereof, including liabilities for taxes, material commitments
and Contingent Obligations.
(b) Since March 31, 1995, there has been no Material
Adverse Effect.
5.12 Environmental Matters. Each Borrower conducts in the ordinary
course of business a review of the effect of existing Environmental Laws and
existing Environmental Claims on its business, operations and properties, and
as a result thereof the Borrowers have reasonably concluded that, except as
specifically disclosed in Schedule 5.12, such Environmental Laws and
Environmental Claims could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.13 Regulated Entities. None of the Company, any Person
controlling the Company, or any Subsidiary, is an "Investment Company" within
the meaning of the Investment Company Act of 1940. None of the Borrowers is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public utilities
code, or any other Federal or state statute or regulation limiting its ability
to incur Indebtedness.
5.14 No Burdensome Restrictions. Neither the Company nor any
Subsidiary is a party to or bound by any Contractual Obligation, or subject to
any restriction in any Organization Document, or any Requirement of Law, which
could reasonably be expected to have a Material Adverse Effect.
5.15 Copyrights, Patents, Trademarks and Licenses, etc. The
Company or its Subsidiaries own or are licensed or otherwise have the right to
use all of the patents, trademarks, service
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marks, trade names, copyrights, contractual franchises, authorizations and
other rights that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other Person.
To the best knowledge of the Borrowers, no slogan or other advertising device,
product, process, method, substance, part or other material now employed, or
now contemplated to be employed, by the Company or any Subsidiary infringes
upon any rights held by any other Person. Except as specifically disclosed in
Schedule 5.5, no claim or litigation regarding any of the foregoing is pending
or threatened, and no patent, invention, device, application, principle or any
statute, law, rule, regulation, standard or code is pending or, to the
knowledge of the Borrowers, proposed, which, in either case, could reasonably
be expected to have a Material Adverse Effect.
5.16 Subsidiaries. As of the Closing Date, the Borrowers have no
Subsidiaries other than those specifically disclosed in part (a) of Schedule
5.16 hereto and has no equity investments in any other corporation or entity
other than those specifically disclosed in part (b) of Schedule 5.16.
5.17 Insurance. Except as specifically disclosed in Schedule 5.17,
the properties of the Company and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Company, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar
properties in localities where the Company or such Subsidiary operates.
5.18 Full Disclosure. None of the representations or warranties
made by the Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Subsidiary in connection with the Loan
Documents , contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, unless the Majority
Banks waive compliance in writing:
6.1 Financial Statements. The Company shall deliver to the Agent,
in form and detail satisfactory to the Agent and the Majority Banks, with
sufficient copies for each Bank:
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(a) as soon as available, but not later than 90 days
after the end of each fiscal year (commencing with the fiscal year ended
December 31, 1995), a copy of the audited consolidated balance sheet of the
Company and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of Ernst & Young,
LLP or another nationally-recognized independent public accounting firm
("Independent Auditor") which report shall state that such consolidated
financial statements present fairly the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years. Such opinion shall not be qualified or limited in any respect,
including any reason relating to a restricted or limited examination by the
Independent Auditor of any material portion of the Company's or any
Subsidiary's records and shall be delivered to the Agent pursuant to a reliance
agreement between the Agent and Banks and such Independent Auditor in form and
substance satisfactory to the Agent;
(b) as soon as available, but not later than 45 days
after the end of each of the first three fiscal quarters of each fiscal year
(commencing with the fiscal quarter ended June 30, 1995), a copy of the
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
the end of such quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, and certified by a Responsible
Officer as fairly presenting, in accordance with GAAP (subject to ordinary,
good faith year-end audit adjustments), the financial position and the results
of operations of the Company and the Subsidiaries;
(c) as soon as available, but not later than 90 days
after the end of each fiscal year (commencing with the fiscal year ended
December 31, 1995), a copy of an unaudited consolidating balance sheet of the
Company and its Subsidiaries as at the end of such year and the related
consolidating statement of income, shareholders' equity and cash flows for such
year, certified by a Responsible Officer as having been developed and used in
connection with the preparation of the financial statements referred to in
subsection 6.1(a);
(d) as soon as available, but not later than 45 days
after the end of each of the first three fiscal quarters of each fiscal year
(commencing with the fiscal quarter ended June 30, 1995), a copy of the
unaudited consolidating balance sheets of the Company and its Subsidiaries, and
the related consolidating statements of income, shareholders' equity and cash
flows for such quarter, all certified by a Responsible Officer as having been
developed and used in connection with the preparation of the financial
statements referred to in subsection 6.1(b).
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6.2 Certificates; Other Information. The Company shall furnish to
the Agent, with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial
statements referred to in subsection 6.1(a), a certificate of the Independent
Auditor stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 6.1(a) and (b), a Compliance Certificate
executed by a Responsible Officer;
(c) promptly, copies of all financial statements and
reports that the Company sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms 10K, 10Q
and 8K) that the Company or any Subsidiary may make to, or file with, the SEC;
(d) as soon as available, but in any event within 60 days
after the beginning of each fiscal year of the Company, a copy of the plan and
forecast (including a projected consolidated and consolidating balance sheet,
income statement and funds flow statement) of the Company for such fiscal year;
and
(e) promptly, such additional information regarding the
business, financial or corporate affairs of the Company or any Subsidiary as
the Agent, at the request of any Bank, may from time to time request.
6.3 Notices. The Borrowers shall promptly notify the Agent and
each Bank:
(a) of the occurrence of any Default or Event of Default,
and of the occurrence or existence of any event or circumstance that
foreseeably will become a Default or Event of Default;
(b) of any matter that has resulted or may result in a
Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Company or any Subsidiary; (ii)
any dispute, litigation, investigation, proceeding or suspension between the
Company or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Company or any Subsidiary; including pursuant to any applicable
Environmental Laws;
(c) of the occurrence of any of the following events
affecting the Company, Filtertek or any ERISA Affiliate (but in no event more
than 10 days after such event), and deliver to the Agent and each Bank a copy
of any notice with respect to such event that is filed with a Governmental
Authority and any notice
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delivered by a Governmental Authority to the Company, Filtertek or any ERISA
Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code by the
Company, Filtertek or any ERISA Affiliate; or
(iv) the adoption of any amendment to a Plan
subject to Section 412 of the Code, if such amendment results in a
material increase in contributions or Unfunded Pension Liability.
(d) of any material change in accounting policies or
financial reporting practices by the Company or any of its consolidated
Subsidiaries.
Each notice under this Section shall be accompanied by a
written statement by a Responsible Officer setting forth details of the
occurrence referred to therein, and stating what action the Company or any
affected Subsidiary proposes to take with respect thereto and at what time.
Each notice under subsection 6.3(a) shall describe with particularity any and
all clauses or provisions of this Agreement or other Loan Document that have
been (or foreseeably will be) breached or violated.
6.4 Preservation of Corporate Existence, Etc. The Borrowers
shall, and shall cause each of their Subsidiaries to:
(a) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state or
jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business except
in connection with transactions permitted by Section 7.3 and sales of assets
permitted by Section 7.2;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property. The Borrowers shall maintain, and
shall cause each of their Subsidiaries to
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maintain, and preserve all its equipment and facilities which is used or useful
in its business in good working order and condition, ordinary wear and tear
excepted and make all necessary repairs thereto and renewals and replacements
thereof except where, in either case, the failure to do so could not reasonably
be expected to have a Material Adverse Effect, except as permitted by Section
7.2. The Company and each Subsidiary shall use the standard of care typical in
the industry in the operation and maintenance of its facilities.
6.6 Insurance. The Borrowers shall maintain, and shall cause each
of their Subsidiaries to maintain, with financially sound and reputable
independent insurers, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons.
6.7 Payment of Obligations. The Borrowers shall, and shall cause
each of their Subsidiaries to, pay and discharge as the same shall become due
and payable, all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the same are
being contested in good faith by appropriate proceedings and adequate reserves
in accordance with GAAP are being maintained by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law
become a Lien upon its property; provided, however, that the Company or any
Subsidiary shall have the right to contest such claims in good faith and by
appropriate proceedings; and
(c) all indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness.
6.8 Compliance with Laws. The Borrowers shall comply, and shall
cause each of their Subsidiaries to comply, in all material respects with all
Requirements of Law of any Governmental Authority having jurisdiction over it
or its business (including the Federal Fair Labor Standards Act), except such
as may be contested in good faith or as to which a bona fide dispute may exist.
6.9 Compliance with ERISA. The Borrowers shall, and shall cause
each of their ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; and (c) make all required
contributions to any Plan subject to Section 412 of the Code.
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6.10 Inspection of Property and Books and Records. The Borrowers
shall maintain and shall cause each of their Subsidiaries to maintain proper
books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Company and
such Subsidiary. The Borrowers shall permit, and shall cause each of their
Subsidiaries to permit, representatives and independent contractors of the
Agent or any Bank to visit and inspect any of their respective properties, to
examine their respective corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective directors, officers, and
independent public accountants, all at the expense of the Borrowers and at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to the applicable Borrower; provided,
however, when an Event of Default exists the Agent or any Bank may do any of
the foregoing at the expense of the Borrowers at any time during normal
business hours and without advance notice.
6.11 Environmental Laws. The Borrowers shall, and shall cause each
of their Subsidiaries to, conduct its operations and keep and maintain its
property in compliance with all Environmental Laws.
6.12 Use of Proceeds. The Borrowers shall use the proceeds of the
Loans for working capital and other general corporate purposes not in
contravention of any Requirement of Law or of any Loan Document.
6.13 Additional Subsidiary Guarantors. In the event any Person
shall hereafter become a Domestic Subsidiary, the Borrowers shall promptly
notify the Agent and the Banks and the Borrowers shall, upon the request of
Agent or Majority Banks, cause such Domestic Subsidiary to become a party to
the Subsidiary Guarantee Agreement.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, unless the Majority
Banks waive compliance in writing:
7.1 Limitation on Liens. The Borrowers shall not, and shall not
suffer or permit any of their Subsidiaries to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its property, whether now owned or hereafter acquired, other than the
following ("Permitted Liens"):
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(a) any Lien existing on property of the Company or any
Subsidiary on the Closing Date and set forth in Schedule 7.1 securing
Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other
governmental charges which are not delinquent or remain payable without
penalty, or to the extent that non-payment thereof is permitted by Section 6.7,
provided that no notice of lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary
course of business which are not delinquent or remain payable without penalty
or which are being contested in good faith and by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale of the
property subject thereto;
(e) Liens (other than any Lien imposed by ERISA)
consisting of pledges or deposits required in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
social security legislation;
(f) Liens on the property of the Company or its
Subsidiary securing (i) the non-delinquent performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, (ii) contingent
obligations on surety and appeal bonds, and (iii) other non-delinquent
obligations of a like nature; in each case, incurred in the ordinary course of
business, provided all such Liens in the aggregate would not (even if enforced)
cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial attachment
liens, provided that the enforcement of such Liens is effectively stayed and
all such liens in the aggregate at any time outstanding for the Company and its
Subsidiaries do not exceed $500,000;
(h) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its
Subsidiaries;
(i) Liens on assets of corporations which become
Subsidiaries after the date of this Agreement, provided, however, that(i) such
Liens existed at the time the respective corporations became Subsidiaries and
were not created in anticipation thereof and (ii) the principal amount of the
Indebtedness secured by such Liens shall not at any time exceed, together with
Indebtedness permitted under Subsection 7.5(d), $7,500,000.
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(j) purchase money security interests on equipment or
real property acquired or held by the Company or its Subsidiaries in the
ordinary course of business, securing Indebtedness incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such property;
provided that (i) any such Lien attaches to such property concurrently with or
within 20 days after the acquisition thereof, (ii) such Lien attaches solely to
the property so acquired in such transaction, (iii) the principal amount of the
debt secured thereby does not exceed 100% of the cost of such property, and
(iv) the principal amount of the Indebtedness secured by any and all such
purchase money security interests shall not at any time exceed, together with
Indebtedness permitted under subsection 7.5(d), $7,500,000;
(k) Liens securing obligations in respect of Capital
Leases on assets subject to such leases, provided that such Capital Leases are
otherwise permitted hereunder; and
(l) Liens arising solely by virtue of any statutory or
common law provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided that (i) such deposit account is not
a dedicated cash collateral account and is not subject to restrictions against
access by the Company or any Subsidiary in excess of those set forth by
regulations promulgated by the FRB, and (ii) such deposit account is not
intended by the Company or any Subsidiary to provide collateral to the
depository institution.
7.2 Disposition of Assets. The Borrowers shall not, and shall not
suffer or permit any of their Subsidiaries to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one or a
series of transactions) any property (including accounts and notes receivable,
with or without recourse) or enter into any agreement to do any of the
foregoing, except:
(a) dispositions of inventory, or used, worn-out or
surplus equipment, all in the ordinary course of business;
(b) the sale of equipment to the extent that such
equipment is exchanged for credit against the purchase price of similar
replacement equipment, or the proceeds of such sale are reasonably promptly
applied to the purchase price of such replacement equipment; and
(c) Sale-leaseback transactions not prohibited by Section
7.15; and
(d) dispositions of assets other than accounts receivable
not otherwise permitted hereunder which are made for fair market value;
provided, that (i) at the time of any disposition, no Event of Default shall
exist or shall result from such
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disposition, (ii) the aggregate sales price from such disposition shall be paid
in cash, and (iii) the aggregate value of all assets so sold by the Company and
its Subsidiaries, together, shall not exceed in any fiscal year more than
$7,500,000 as of the date of disposition.
7.3 Consolidations and Mergers. The Company shall not, and shall
not suffer or permit any Subsidiary to, merge, consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:
(a) any Subsidiary may merge with the Company, provided
that the Company shall be the continuing or surviving corporation, or with any
one or more Subsidiaries, provided that if any transaction shall be between a
Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be
the continuing or surviving corporation and if the transaction shall be between
a Subsidiary and a Subsidiary Guarantor, the Subsidiary Guarantor shall be the
continuing or surviving corporation; and
(b) any Subsidiary may sell all or substantially all of
its assets (upon voluntary liquidation or otherwise), to the Company or another
Wholly-Owned Subsidiary that is a Subsidiary Guarantor.
(c) The Company or any Subsidiary may consummate a merger
in connection with an Acquisition permitted by Section 7.4(j) provided that the
Company or such Subsidiary is the surviving person in such merger.
7.4 Loans and Investments. No Borrower shall purchase or acquire,
or suffer or permit any of their Subsidiaries to purchase or acquire, or make
any commitment therefor, any capital stock, equity interest, or any obligations
or other securities of, or any interest in, any Person, or make or commit to
make any Acquisitions, or make or commit to make any advance, loan, extension
of credit or capital contribution to or any other investment in, any Person
including any Affiliate of the Company, except for:
(a) short-term obligations of, or fully guaranteed by,
the United States of America;
(b) commercial paper rated A-1 or better by Standard and
Poor's Corporation ("S&P") or P-1 or better by Xxxxx'x Investors Service, Inc.
("Moody's");
(c) demand deposit accounts maintained in the ordinary
course of business;
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(d) certificates of deposit issued by and time deposits
with commercial banks (whether domestic or foreign) having capital and surplus
in excess of $100,000,000;
(e) common stock of companies publicly traded on a
national exchange; provided, that the aggregate cost of such common stock does
not at any time exceed $1,000,000;
(f) existing investments in Subsidiaries and other
investments in existence on the date hereof and described in Schedule 5.16
hereto and additional investments by a Foreign Subsidiary in another Foreign
Subsidiary;
(g) adjustable rate preferred stock and preferred stock
of companies listed on the S&P 500 and having a long-term debt rating of A or
better by S&P or A2 or better by Moody's, and loan participations, so long as
the underlying obligor has a short-term debt rating of A-2 or better by S&P or
P-2 or better by Moody's; provided, that the aggregate cost of such investments
does not at any time exceed $2,000,000;
(h) extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale or lease of goods or
services in the ordinary course of business;
(i) extensions of credit by a Borrower to any of its
Wholly-Owned Subsidiaries or by any of its Wholly-Owned Subsidiaries to another
of its Wholly-Owned Subsidiaries provided that in the event of any extension of
credit to a Wholly-Owned Subsidiary which is not a Borrower or a Subsidiary
Guarantor, such extension of credit shall be evidenced by promissory notes
payable to such Borrower or such Subsidiary, as the case may be, in form and
substance as set forth on Exhibit A to the Intercompany Note Pledge Agreement,
which promissory notes shall be delivered and pledged to Agent pursuant to the
Intercompany Note Pledge Agreement;
(j) investments incurred in order to consummate
Acquisitions otherwise permitted herein, provided that (i) immediately
following such Acquisition the Company will have the ability to borrow not less
than five percent (5%) of the aggregate Revolving Commitment of the Banks
hereunder and under the Short Term Revolving Loan Facility, (ii) such
Acquisitions are undertaken in accordance with all applicable Requirements of
Law; (iii) the prior, effective written consent or approval to such Acquisition
of the board of directors or equivalent governing body of the acquiree is
obtained; and (iv) on a pro forma basis after giving effect to such Acquisition
(including any Indebtedness to be incurred in connection therewith), no Default
or Event of Default will exist; and
(k) extensions of credit to employees of the Company or
its Subsidiaries in the ordinary course of business consistent with past
practice and in an aggregate amount at any one time outstanding not to exceed
$1,000,000, provided that the
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Company or its Subsidiaries may not extend credit to Xxxxxxxx X. Xxxxxx or
Xxxxx X. Xxxxxx.
7.5 Limitation on Indebtedness. The Borrowers shall not, and
shall not suffer or permit any of their Subsidiaries to, create, incur, assume,
suffer to exist, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement or
the Short Term Revolving Loan Facility;
(b) Indebtedness consisting of Contingent Obligations
permitted pursuant to Section 7.8;
(c) Indebtedness existing on the Closing Date and set
forth in Schedule 7.5;
(d) Indebtedness secured by Liens permitted by subsection
7.1(i) and (j) or other unsecured Indebtedness incurred to finance an
Acquisition if such Acquisition is permitted pursuant to Section 7.4 in an
aggregate amount (for all such secured and unsecured Indebtedness) outstanding
not to exceed $7,500,000 at any time;
(e) Indebtedness incurred in connection with leases
permitted pursuant to Section 7.10;
(f) Subordinated Indebtedness to a member of the Schawk
Family meeting the requirements set forth in the definition thereof in Section
1.1 hereof;
(g) Indebtedness permitted by Section 7.4(i);
(h) Unsecured Indebtedness in an aggregate principal
amount at any one time outstanding not to exceed $5,000,000 provided that such
Indebtedness is repaid not later than five Business Days after the date of its
incurrence and provided further that the principal amount of such Indebtedness
together with the principal amount of Loans and the face amount of Letters of
Credit hereunder and under the Short Term Revolving Loan Facility does not, at
any time, exceed $100,000,000; and
(i) Indebtedness to a member of the Schawk Family (other
than Xxxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, or Xxxxx X. Xxxxxx) not in excess
of $1,200,000 incurred solely with respect to federal, state and local income
tax obligations of such member of the Schawk Family arising with respect to
income of Schawk, Inc. allocable to such member of the Schawk Family.
7.6 Transactions with Affiliates. The Borrowers shall not, and
shall not suffer or permit any of their Subsidiaries to, enter into any
transaction with any Affiliate of the Company (other than a Borrower or a
Subsidiary Guarantor), except upon fair and reasonable terms no less favorable
to the Company or
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such Subsidiary than would obtain in a comparable arm's-length transaction with
a Person not an Affiliate of the Company or such Subsidiary.
7.7 Use of Proceeds. The Borrowers shall not, and shall not
suffer or permit any of their Subsidiaries to, use any portion of the Loan
proceeds, directly or indirectly, (i) to purchase or carry Margin Stock, (ii)
to repay or otherwise refinance indebtedness of the Borrowers or others
incurred to purchase or carry Margin Stock, (iii) to extend credit for the
purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any
security in any transaction that is subject to Section 13 or 14 of the Exchange
Act.
7.8 Contingent Obligations. The Borrowers shall not, and shall
not suffer or permit any of their Subsidiaries to, create, incur, assume or
suffer to exist any Contingent Obligations except:
(a) endorsements for collection or deposit in the
ordinary course of business;
(b) Swap Contracts entered into in the ordinary course of
business as bona fide hedging transactions;
(c) Contingent Obligations of the Company and its
Subsidiaries existing as of the Closing Date and listed in Schedule 7.8;
(d) Contingent Obligations of the Company or any
Subsidiary arising from the guaranty by the Company or any Subsidiary of an
obligation or liability of any Wholly-Owned Subsidiary of the Company, if the
underlying obligation or liability is permitted by the terms hereof;
(e) Contingent Obligations consisting of Letters of
Credit under this Agreement; and
(f) Contingent Obligations which, in the aggregate, do
not exceed at any point in time, $1,000,000.
7.9 Joint Ventures. The Borrowers shall not, and shall not suffer
or permit any of their Subsidiaries to enter into any Joint Venture, other than
in the ordinary course of business.
7.10 Lease Obligations. The Borrowers shall not, and shall not
suffer or permit any of their Subsidiaries to, create or suffer to exist any
obligations for the payment of rent for any property under lease or agreement
to lease, except for:
(a) operating leases entered into by the Company or any
Subsidiary in the ordinary course of business provided that the aggregate
annual rental payments for all such operating leases shall not exceed in any
fiscal year $3,600,000;
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(b) leases entered into by the Company or any Subsidiary
after the Closing Date pursuant to sale- leaseback transactions permitted under
Section 7.15;
(c) Capital Leases other than those permitted under
clause (b) of this Section, entered into by the Company or any Subsidiary to
finance the acquisition of equipment; provided that the aggregate annual rental
payments for all such Capital Leases shall not exceed in any fiscal year
$3,600,000.
7.11 Restricted Payments. The Borrowers shall not, and shall not
suffer or permit any of their Subsidiaries to, declare or make any dividend
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account of any shares of any class of its capital stock, or
purchase, redeem or otherwise acquire for value any shares of its capital stock
or any warrants, rights or options to acquire such shares, now or hereafter
outstanding or repay, repurchase or otherwise acquire any Subordinated
Indebtedness owed to any Person in the Schawk Family; except that:
(a) the Company or any Wholly-Owed Subsidiary may declare
and make dividend payments or other distributions payable solely in its common
stock;
(b) the Company or any Wholly-Owed Subsidiary may
purchase, redeem or otherwise acquire shares of its common stock or warrants or
options to acquire any such shares with the proceeds received from the
substantially concurrent issue of new shares of its common stock;
(c) Filtertek may declare or pay cash dividends to the
Company; and the Company may declare or pay cash dividends to its stockholders
in an amount not in excess of $0.26 per common share (as the same may be
adjusted to take into account stock splits) per fiscal year through June 30,
1996 and thereafter the Company may declare or pay cash dividends to its
stockholders and purchase, redeem or otherwise acquire shares of its capital
stock or warrants, rights or options to acquire any such shares for cash solely
out of 50% of Consolidated Net Income of the Company accrued during the period
(treated as an accounting period) beginning July 1, 1996 to the end of the most
recent fiscal quarter ending at least 45 days prior to the date of such
payment, provided, that, immediately after giving effect to such proposed
action, no Default or Event of Default would exist;
(d) the Company may declare or pay cash dividends on
preferred stock to the extent required by the terms of such preferred stock in
an amount not to exceed $2,000,000 in any fiscal year;
(e) the Company or any Wholly-Owed Subsidiary may
purchase, redeem or otherwise acquire shares of its common stock or warrants or
options to acquire such shares if after giving
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effect to any such purchase, redemption or acquisition there is no Default or
Event of Default and if the aggregate amount of all such purchases, redemptions
or acquisitions by the Company and its Subsidiaries within any one fiscal year
does not exceed $2,500,000; and
(f) the Company or any Wholly-Owed Subsidiary may repay,
repurchase or otherwise acquire Subordinated Indebtedness owed as of the date
hereof to any person in the Schawk Family in an aggregate amount not to exceed
$4,500,000, provided that no Default or Event of Default exists before such
payment or would exist immediately thereafter.
7.12 ERISA. The Borrowers shall not, and shall not suffer or
permit any of their ERISA Affiliates to: (a) engage in a prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably expected to result in liability
of any Borrower in an aggregate amount in excess of $500,000; or (b) engage in
a transaction that could be subject to Section 4069 or 4212(c) of ERISA.
7.13 Change in Business. The Borrowers shall not, and shall not
suffer or permit any of their Subsidiaries to, engage in any material line of
business substantially different from those lines of business carried on by the
Company and its Subsidiaries on the date hereof.
7.14 Accounting Changes. The Borrowers shall not, and shall not
suffer or permit any of their Subsidiaries to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year of the Company or of any Subsidiary.
7.15 Sale and Leaseback. The Borrowers will not, nor will they
permit any of their Subsidiaries to, sell or transfer any of its property in
order to concurrently or subsequently lease as lessee such or similar property
(a "Sale/Leaseback Transaction"), except for Sale/Leaseback Transactions to the
extent that the fair market value of all such Sale/Leaseback Transactions does
not, in the aggregate, exceed $5,000,000.
7.16 Limitation on Certain Restrictions on Subsidiaries. The
Borrowers will not, nor will they permit any of their Subsidiaries to create or
otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any of their Subsidiaries or (i)
pay dividends or make any other distributions on its Capital Stock or pay and
Indebtedness or other obligation owed to the Company or any of its other
Subsidiaries, (ii) make any loans or advances to the Company or any of its
other Subsidiaries, or (iii) transfer any of its property or assets to the
Company or any of its other Subsidiaries, except:
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(a) any encumbrance or restriction pursuant hereto or to
an agreement in effect at or entered into on the Closing Date and reflected on
Schedule 7.16 hereto;
(b) any encumbrance or restriction with respect to a
Subsidiary of the Company pursuant to an agreement relating to any Indebtedness
issued by such Subsidiary on or prior to the date on which such Subsidiary
became a Subsidiary of the Company or was acquired by the Company (other than
Indebtedness issued as consideration in, or to provide all or any portion of
the funds utilized to consummate, the transaction or series of related
transactions pursuant to which such Subsidiary became a Subsidiary or was
acquired by the Company) and outstanding on such date;
(c) any such encumbrance or restriction consisting of
customary non-assignment provisions in leases governing leasehold interests to
the extent such provisions restrict the transfer of the lease; and
(d) in the case of clause (iii) above, Permitted Liens or
other restrictions contained in security agreements securing Indebtedness
permitted hereby to the extent such restrictions restrict the transfer of the
property subject to such security agreements.
7.17 Organization Documents. The Borrowers shall not, nor will
they permit any of their Subsidiaries to amend, modify or waive, or permit any
amendment, modification or waiver as to its Organization Documents if such
amendment, modification or waiver could reasonably be expected to adversely
affect the interests of Agent or the Banks.
7.18 Financial Covenants
(a) Maintenance of Consolidated Tangible Net Worth. The
Borrowers shall not permit Consolidated Tangible Net Worth of the Company at
any time to be less than the sum of (i) $15,000,000 plus (ii) as of the end of
each fiscal quarter, the amount equal to 40% of the aggregate Consolidated Net
Income of the Company since December 31, 1994; provided, however, that in the
event that the Company has a Consolidated Net Loss for any fiscal quarter,
Consolidated Net Income for purposes only of this Section 7.15(a) shall be
deemed to be zero for such fiscal quarter.
(b) Leverage Ratio. The Borrowers shall not permit the
ratio of (a) Funded Debt to (b) Total Capitalization of the Company at any time
to exceed the percentage set forth below for the applicable period:
==================================================================================================================
PERIOD MAXIMUM RATIO
------------------------------------------------------------------------------------------------------------------
Closing - 12/30/96 58%
------------------------------------------------------------------------------------------------------------------
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------------------------------------------------------------------------------------------------------------------
12/31/96 - 12/30/97 55%
------------------------------------------------------------------------------------------------------------------
12/31/97 - maturity 50%
==================================================================================================================
(c) Funded Debt to EBITDA. The Borrowers shall not
permit the ratio of Funded Debt as of the last day of any fiscal quarter to
EBITDA of the Company for the period of four consecutive fiscal quarters ending
on the last day of such fiscal quarter to exceed 3.5 to 1.0.
(d) Interest Coverage Ratio. For each period of one
fiscal quarter ending on the last day of each fiscal quarter ending within the
periods set forth below the Borrowers shall not permit the ratio of (i) the
amount equal to EBIT for such period to (ii) Consolidated Interest Expense for
such period to be less than the ratio set forth below:
==================================================================================================================
PERIOD MINIMUM RATIO
------------------------------------------------------------------------------------------------------------------
4/1/95 - 6/30/96 2.25 to 1.0
------------------------------------------------------------------------------------------------------------------
7/1/96 - 9/30/97 2.50 to 1.0
==================================================================================================================
and beginning 12/31/97 and thereafter, the Company shall not permit the ratio
of (i) an amount equal to EBIT for the period of four consecutive fiscal
quarters ending on the last day of any fiscal quarter to (ii) Consolidated
Interest Expense for such period to be less than 3.0 to 1.0.
(e) Fixed Charge Coverage Ratio. For each period of one
fiscal quarter ending on the last day of each fiscal quarter ending within the
periods set forth below, the Borrowers shall not permit the ratio of (i) EBIT
of the Company for such period plus payments under operating leases for such
period to (ii) Consolidated Fixed Charges of the Company for such period to be
less than the ratio set forth below:
==================================================================================================================
PERIOD MAXIMUM RATIO
------------------------------------------------------------------------------------------------------------------
4/1/95 - 6/30/96 0.8 to 1.0
------------------------------------------------------------------------------------------------------------------
7/1/96 - 9/30/97 0.9 to 1.0
==================================================================================================================
and the Borrowers shall not permit the ratio of (i) EBIT for the period of four
consecutive fiscal quarters ending on the last day of each fiscal quarter
ending within the periods set forth below to (ii) Consolidated Fixed Charges of
the Company for such period to exceed the ratio set forth below for the
applicable period:
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==================================================================================================================
FOUR QUARTER PERIOD ENDING
ON THE LAST DAY OF EACH
FISCAL QUARTER ENDING WITHIN MAXIMUM RATIO
------------------------------------------------------------------------------------------------------------------
7/1/97 - 6/30/98 1.0 to 1.0
------------------------------------------------------------------------------------------------------------------
7/1/98 - 6/30/99 1.10 to 1.0
------------------------------------------------------------------------------------------------------------------
7/1/99 - maturity 1.20 to 1.0
==================================================================================================================
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Event of Default. Any of the following shall constitute an
"Event of Default":
(a) Non-Payment. Any Borrower fails to pay, (i) when and
as required to be paid herein, any amount of principal of any Loan, or (ii)
within 3 Business Days after the same becomes due, any interest, fee or any
other amount payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or
warranty by a Borrower or any Subsidiary made or deemed made herein, in any
other Loan Document, or which is contained in any certificate, document or
financial or other statement by a Borrower, any Subsidiary, or any Responsible
Officer, furnished at any time under this Agreement, or in or under any other
Loan Document, is incorrect in any material respect on or as of the date made
or deemed made; or
(c) Specific Defaults. Any Borrower fails to perform or
observe any term, covenant or agreement contained in any of Section 6.1, 6.2,
6.3 or 6.9 or in Article VII; or
(d) Other Defaults. Any Borrower fails to perform or
observe any other term or covenant contained in this Agreement or any other
Loan Document, and such default shall continue unremedied for a period of 30
days after the date upon which written notice thereof is given to the Borrowers
by the Agent or any Bank; or
(e) Cross-Default. Any Borrower or any Subsidiary (i)
fails to make any payment in respect of any Indebtedness or Contingent
Obligation having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $500,000 when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) and such failure continues after the applicable grace or notice
period, if any, specified in the relevant
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document on the date of such failure; or (ii) fails to perform or observe any
other condition or covenant, or any other event shall occur or condition exist,
under any agreement or instrument relating to any such Indebtedness or
Contingent Obligation, and such failure continues after the applicable grace or
notice period, if any, specified in the relevant document on the date of such
failure if the effect of such failure, event or condition is to cause, or to
permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness
to be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof
to be demanded; or
(f) Insolvency; Voluntary Proceedings. The Company or
any Subsidiary (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject
to applicable grace periods, if any, whether at stated maturity or otherwise;
(ii) voluntarily ceases to conduct its business in the ordinary course (other
than a Subsidiary not a Borrower with assets of less than $100,000); (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary
Insolvency Proceeding is commenced or filed against the Company or any
Subsidiary, or any writ, judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of the Company's or any
Subsidiary's properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) the Company or any Subsidiary admits the
material allegations of a petition against it in any Insolvency Proceeding, or
an order for relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) the Company or any Subsidiary acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect
to a Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of a Borrower under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess
of $500,000; (ii) the aggregate amount of Unfunded Pension Liability among all
Pension Plans at any time exceeds $500,000; or (iii) any Borrower or any ERISA
Affiliate shall fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
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under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount
in excess of $500,000; or
(i) Monetary Judgments. One or more non-interlocutory
judgments, non-interlocutory orders, decrees or arbitration awards is entered
against the Company or any Subsidiary involving in the aggregate a liability
(to the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of $500,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of the
lesser of 30 days or the applicable statutory appeal period after the entry
thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment,
order or decree is entered against the Company or any Subsidiary which does or
would reasonably be expected to have a Material Adverse Effect, and there shall
be any period of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) Change of Control. There occurs any Change of
Control; or
(l) Environmental Matters. The Company or any of its
Subsidiaries shall be the subject of any proceeding or investigation pertaining
to the release by the Company or any of its Subsidiaries, or any other Person
of any toxic or hazardous waste or substance into the environment, or any
violation of any Environmental Laws, which, in either case, could reasonably be
expected to have a Material Adverse Effect; or
(m) Unenforceability. This Agreement or the Subsidiary
Guarantee Agreement shall cease for any reason to be in full force and effect
(other than by reason of the satisfaction of all the Company's or any of its
Subsidiaries' obligations thereunder) or the Company or any of its Subsidiaries
or any other Person (other than the Banks or the Agent) shall disavow its
obligations under any provision hereof or thereof, or shall deny that it has
any or further obligations under any provision thereof, or shall contest the
validity or enforceability of any provision thereof.
8.2 Remedies. If any Event of Default occurs, the Agent shall, at
the request of, or may, with the consent of, the Majority Banks,
(a) declare the commitment of each Bank to make Loans to
be terminated, whereupon such commitments shall be terminated;
(b) declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and
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all other amounts owing or payable hereunder or under any other Loan Document
to be immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrowers; and
(c) exercise on behalf of itself and the Banks all rights
and remedies available to it and the Banks under the Loan Documents or
applicable law;
provided, however, that upon the occurrence of any event specified in
subsection (f) or (g) of Section 8.1 (in the case of clause (i) of subsection
(g) upon the expiration of the 60-day period mentioned therein), the obligation
of each Bank to make Loans shall automatically terminate and the unpaid
principal amount of all outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable without further act of the
Agent or any Bank.
In addition to the foregoing, following the occurrence and during the
continuance of an Event of Default, so long as any Letter of Credit has not
been fully drawn and has not been cancelled or expired by its terms, upon
demand by the Agent, the Borrowers shall deposit in an account (the "Letter of
Credit Cash Collateral Account") maintained with BofA in the name of the Agent,
for the ratable benefit of the Banks and the Agent, cash in an amount equal to
the aggregate undrawn face amount of all outstanding Letters of Credit and all
fees and other amounts due or which may become due with respect thereto. The
Borrowers shall have no control over funds in the Letter of Credit Cash
Collateral Account, which funds shall be invested by the Agent from time to
time in certificates of deposit of BofA having a maturity not exceeding thirty
days or in other short term funds as the Agent may in its sole judgment
determine. Such funds shall be promptly applied by the Agent to reimburse the
Issuing Bank for drafts drawn from time to time under such Letters of Credit,
and if there are insufficient funds available to reimburse the Issuing Bank for
all such drafts, then such funds shall be applied ratably in accordance with
the Stated Amounts of the related Letters of Credit. Such funds, if any,
remaining in the Letter of Credit Cash Collateral Account following the payment
of all Obligations in full or the earlier termination of all Events of Default
shall, unless the Agent is otherwise directed by a court of competent
jurisdiction, be promptly paid over to the Borrowers.
8.3 Rights Not Exclusive. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or hereafter
arising.
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ARTICLE IX
THE AGENT
9.1 Appointment and Authorization. Each Bank hereby irrevocably
(subject to Section 9.9) appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
9.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.3 Liability of Agent. None of the Agent-Related Persons shall
(i) be liable to any other Bank for any action taken or omitted to be taken by
any of them under or in connection with this Agreement or any other Loan
Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (ii) be responsible in any manner to any
of the Banks for any recital, statement, representation or warranty made by the
Company or any Subsidiary or Affiliate of the Company, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of any Borrower or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Borrower or any of the Company's other Subsidiaries or
Affiliates.
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9.4 Reliance by Agent. (a) The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it
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
counsel to the Borrowers), independent accountants and other experts selected
by the Agent. The Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Majority Banks as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Banks 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 Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the Majority Banks and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Banks.
(b) For purposes of determining compliance with the
conditions specified in Section 4.1, each Bank that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by the Agent to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Bank.
9.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Agent for the account of the Banks, unless the Agent
shall have received written notice from a Bank or a Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Banks of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Majority Banks in
accordance with Article VIII; provided, however, that unless and until the
Agent has received any such request, the 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 or in the best interest
of the Banks.
9.6 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that
no act by the Agent hereinafter taken, including any review of the affairs of
the Company and its Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Bank. Each Bank
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represents to the Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Borrowers
hereunder. Each Bank also represents that it will, independently and without
reliance upon any Agent-Related Person 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 the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrowers.
Except for notices, reports and other documents expressly herein required to be
furnished to the Banks by the Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrowers which may come into the
possession of any of the Agent-Related Persons.
9.7 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent owed but not reimbursed by or on behalf of
the Borrowers and without limiting the obligation of the Borrowers to do so),
pro rata, from and against any and all Indemnified Liabilities; provided,
however, that no Bank shall be liable for the payment to the Agent-Related
Persons of any portion of such Indemnified Liabilities resulting solely from
such Person's gross negligence or willful misconduct. Without limitation of
the foregoing, each Bank shall reimburse the Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the
Agent is required to be but is not reimbursed for such expenses by or on behalf
of the Borrowers. The undertaking in this Section shall survive the payment of
all Obligations hereunder and the resignation or replacement of the Agent.
9.8 Agent in Individual Capacity. BofA and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with the Company and
its
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Subsidiaries and Affiliates as though BofA were not the Agent hereunder
and without notice to or consent of the Banks. The Banks acknowledge that,
pursuant to such activities, BofA or its Affiliates may receive information
regarding the Company or its Affiliates (including information that may be
subject to confidentiality obligations in favor of the Company or such
Subsidiary) and acknowledge that the Agent shall be under no obligation to
provide such information to them. With respect to its Loans, BofA shall have
the same rights and powers under this Agreement as any other Bank and may
exercise the same as though it were not the Agent, and the terms "Bank" and
"Banks" include BofA in its individual capacity.
9.9 Successor Agent. The Agent may, and at the request of the
Borrowers and the Majority Banks shall, resign as Agent upon 30 days' notice to
the Banks. If the Agent resigns under this Agreement, the Majority Banks shall
appoint from among the Banks a successor agent for the Banks which successor
agent shall be approved by the Borrowers. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Banks and the Borrowers, a successor agent
from among the Banks. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX and Sections 11.4 and 11.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent
by the date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Banks shall perform all of the duties of the Agent
hereunder until such time, if any, as the Majority Banks appoint a successor
agent as provided for above.
9.10 Withholding Tax. (a) If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Bank claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Bank agrees with and in favor of the Agent, to deliver
to the Agent:
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty,
properly completed IRS Forms 1001 and W-8 before the payment of any
interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which interest
may be paid under this Agreement;
(ii) if such Bank claims that interest paid under
this Agreement is exempt from United States withholding tax
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because it is effectively connected with a United States trade or
business of such Bank, two properly completed and executed copies of
IRS Form 4224 before the payment of any interest is due in the first
taxable year of such Bank and in each succeeding taxable year of such
Bank during which interest may be paid under this Agreement, and IRS
Form W-9; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Borrowers to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Borrowers to such Bank. To the extent
of such percentage amount, the Agent will treat such Bank's IRS Form 1001 as no
longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Borrowers to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the
applicable withholding tax, the Agent may withhold from any interest payment to
such Bank an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Bank not providing such forms or
other documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered, was not properly executed, or
because such Bank failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Bank shall indemnify the Agent fully for all amounts
paid, directly or indirectly, by the Agent as tax or otherwise, including
penalties and interest,
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and including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses (including
Attorney Costs). The obligation of the Banks under this subsection shall
survive the payment of all Obligations and the resignation or replacement of
the Agent.
ARTICLE X
GUARANTEES OF COMPANY AND EACH BORROWER
10.1 Guarantee. The Company and each Borrower, jointly and
severally, hereby unconditionally guarantees the due and punctual payment of
all Obligations of the Borrowers, including without limitation the due and
punctual payment of the principal of and interest on the Loans made to each
Borrower pursuant to this Agreement and the due and punctual payment of all
other amounts payable by each other Borrower under this Agreement or the other
Loan Documents. Upon failure by any Borrower to pay punctually any such
amount, upon demand by Agent, the Company or any other Borrower, as the case
may be, shall forthwith pay the amount not so paid at the place and in the
manner and with the effect specified in this Agreement. Notwithstanding
anything to the contrary contained in this Section 10.1 and elsewhere in the
Agreement to the extent this Agreement provides for joint and several
liability, the obligations and liabilities of each Borrower with respect to the
Loan and related Obligations of the other Borrower hereunder shall not at any
time exceed the "Limit of Liability" (as hereafter defined) of such Borrower.
The term "Limit of Liability", with respect to any Borrower, shall have the
meaning assigned to such term in the Subsidiary Guaranty Agreement provided
that, for purposes of this Section 10.1 all references to "Guarantor" therein
and in any other related terms shall be replaced with reference to such
Borrower.
10.2 Unconditional Obligations. The obligations of the Company and
each Borrower hereunder shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged or
otherwise affected by:
(i) any extension, renewal, settlement, compromise,
waiver or release in respect of any Obligation of any Borrower or any
collateral therefor under this Agreement or the other Loan Document;
(ii) any modification or amendment of or supplement to
this Agreement or the other Loan Documents;
(iii) any change in the corporate existence, structure or
ownership of any Borrower, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any other
Borrower or its collateral or its assets;
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(iv) the existence of any claim, set-off or other rights
which a Borrower may have at any time against the Company or any other
Borrower, the Agent or any other Person, whether in connection
herewith or any unrelated transactions, provided that nothing herein
shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(v) any validity or unenforceability relating to or
against the Company or any Borrower for any reason of any provision or
all of this Agreement or the other Loan Documents, or any provision of
applicable law or regulation purporting to prohibit the payment by the
Company or any Borrower of the principal of or interest on any loan or
any other amount payable by it under this Agreement or the other Loan
Documents; or
(vi) any other act or omission to act or delay of any kind
by the Company or any Borrower, the Agent or any other Person or any
other circumstance whatsoever which might, but for the provisions of
this paragraph, constitute a legal or equitable discharge of the
Company's or such Borrower's obligations under this Agreement or the
other Loan Documents.
10.3 Period In Force. The Company's and each Borrower's
Obligations under this Article 10 shall remain in full force and effect until
all Obligations shall have been paid in full and this Agreement and the other
Loan Documents shall have terminated in accordance with their terms. If at any
time any payment of the principal of or interest on any loan made to a Borrower
or any other amount payable the Company or by any Borrower under this Agreement
or the other Loan Documents is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of the Company or
such Borrower or otherwise, each of the Company's and such Borrower's
Obligations under this Section 10 with respect to such payment shall be revived
and continued in full force and effect.
10.4 Waiver. THE COMPANY AND EACH BORROWER 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 OTHER BORROWER OR ANY OTHER PERSON.
10.5 Effect of Stay. In the event that the demand for payment of
any amount payable by the Company or any Borrower under this Agreement or the
other Loan Documents is stayed upon the insolvency, bankruptcy or
reorganization of the Company or a Borrower, all such amounts otherwise subject
to acceleration under the terms of this Agreement or the other Loan Documents
shall nonetheless be payable by the Company or the other Borrowers hereunder
forthwith upon demand by Agent.
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10.6 No Subrogation, Contribution, Reimbursement or Indemnity.
Notwithstanding anything to the contrary in this Section 10 and this Agreement,
the Company and the Borrowers hereby irrevocably waive all rights which may
have arisen in connection with the guarantees made pursuant to this Section 10
to be subrogated to any of the rights (whether contractual, under the United
States Bankruptcy Code, as amended, including Section 509 thereof, under common
law or otherwise) of the Agent or any of the Lenders against the Company or the
Borrowers or against any collateral security or guaranty or right of offset
held by the Agent for the payment of the Obligations until such time as all
Obligations have been fully and indefinitely paid in full. The Company and the
Borrowers hereby further irrevocably waive all contractual, common law,
statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Company or the Borrowers
which may have arisen in connection with the guarantees made pursuant to this
Section 10 until such time as all Obligations have been fully and indefeasibly
paid in full. So long as any Obligations remain, if any amount shall be paid
by or on behalf of the Company or any Borrower to any of them on account of any
of the rights waived in this paragraph, such amount shall be held by such
Person in trust, segregated from other funds of such Person, and shall,
forthwith upon receipt, be turned over to the Agent (duly indorsed by such
Person to the Agent, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Agent may determine. The
provisions of this paragraph shall survive the term of this Agreement and the
payment in full of the Obligations.
ARTICLE XI
MISCELLANEOUS
11.1 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by the Borrowers therefrom, shall be effective unless
the same shall be in writing and signed by the Majority Banks (or by the Agent
at the written request of the Majority Banks) and the Borrowers and
acknowledged by the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such waiver, amendment, or consent shall,
unless in writing and signed by all the Banks and the Borrowers and
acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank (or
reinstate any Commitment terminated pursuant to Section 8.2);
(b) postpone or delay any date fixed by this Agreement or
any other Loan Document for any payment of principal, interest, fees or other
amounts due to the Banks (or any of them) hereunder or under any other Loan
Document;
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(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or (subject to clause (ii) below) any fees or
other amounts payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Banks
or any of them to take any action hereunder;
(e) extend the Termination Date or permit any Letter of
Credit to have an expiration date beyond the Revolving Termination Date;
(f) release any guarantor or release all or substantially
all of any collateral, if any, securing the Obligations; or
(g) amend this Section, or Section 2.14, or any provision
herein providing for consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the Agent in addition to the Majority Banks or all the
Banks, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document, and (ii) the Fee Letters may be amended,
or rights or privileges thereunder waived, in a writing executed by the parties
thereto.
11.2 Notices. (a) All notices, requests and other communications
shall be in writing (including, unless the context expressly otherwise
provides, by facsimile transmission, provided that any matter transmitted by
the Borrowers by facsimile (i) shall be immediately confirmed by a telephone
call to the recipient at the number specified on Schedule 11.2, and (ii) shall
be followed promptly by delivery of a hard copy original thereof) and mailed,
faxed or delivered, to the address or facsimile number specified for notices on
Schedule 11.2; or, as directed to the Borrowers or the Agent, to such other
address as shall be designated by such party in a written notice to the other
parties, and as directed to any other party, at such other address as shall be
designated by such party in a written notice to the Borrowers and the Agent.
(b) All such notices, requests and communications shall,
when transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II or IX shall not be effective until actually
received by the Agent.
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(c) Any agreement of the Agent and the Banks herein to
receive certain notices by telephone or facsimile is solely for the convenience
and at the request of the Borrowers. The Agent and the Banks shall be entitled
to rely on the authority of any Person purporting to be a Person authorized by
a Borrowers to give such notice and the Agent and the Banks shall not have any
liability to the or other Person on account of any action taken or not taken
by the Agent or the Banks in reliance upon such telephonic or facsimile notice.
The obligation of the Borrowers to repay the Loans shall not be affected in any
way or to any extent by any failure by the Agent and the Banks to receive
written confirmation of any telephonic or facsimile notice or the receipt by
the Agent and the Banks of a confirmation which is at variance with the terms
understood by the Agent and the Banks to be contained in the telephonic or
facsimile notice.
(d) Any Notice given by the Agent or any Bank and
addressed to a Borrower shall be deemed to constitute notice hereunder of such
event, circumstance, requirement or other matter for all Borrowers hereunder.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
11.4 Costs and Expenses. The Borrowers shall:
(a) whether or not the transactions contemplated hereby
are consummated, pay or reimburse BofA (including in its capacity as Agent)
within ten Business Days after demand (subject to subsection 4.1(f)) for all
costs and expenses incurred by BofA (including in its capacity as Agent) in
connection with the development, preparation, delivery, administration and
execution of, and any amendment, supplement, waiver or modification to (in each
case, whether or not consummated), this Agreement, any Loan Document and any
other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including
reasonable Attorney Costs incurred by BofA (including in its capacity as Agent)
with respect thereto; and
(b) pay or reimburse the Agent and each Bank within five
Business Days after demand (subject to subsection 4.1(f)) for all costs and
expenses (including Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an
Event of Default or after acceleration of the Loans (including in connection
with any "workout" or restructuring
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regarding the Loans, and including in any Insolvency Proceeding or appellate
proceeding); and
(c) the provisions of Section 11.4(a) notwithstanding,
the Borrower's obligations to reimburse Agent for attorneys' fees and expenses
incurred in connection with the preparation of this Agreement shall not exceed
$40,000.
11.5 Borrowers Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Borrowers shall indemnify and hold the
Agent-Related Persons, and each Bank and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Bank) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement or the Loans
or the use of the proceeds thereof, or related to any Offshore Currency
transactions entered into in connection herewith, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Borrowers shall have no
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting solely from the gross negligence or willful misconduct of
such Indemnified Person. The agreements in this Section shall survive payment
of all other Obligations.
11.6 Payments Set Aside. To the extent that a Borrower makes a
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or such Bank in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any Insolvency
Proceeding or otherwise, then (a) to the extent of such recovery the obligation
or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such
set-off had not occurred, and (b) each Bank severally agrees to pay to the
Agent upon demand its pro rata share of any amount so recovered from or repaid
by the Agent.
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11.7 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that no Borrower may assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agent and each Bank.
11.8 Assignments, Participations, etc. (a) Any Bank may, with the
written consent of the Borrowers at all times other than during the existence
of an Event of Default and the Agent, which consents shall not be unreasonably
withheld, at any time assign and delegate to one or more Eligible Assignees
(provided that no written consent of the Borrowers or the Agent shall be
required in connection with any assignment and delegation by a Bank to an
Eligible Assignee that is an Affiliate of such Bank) (each an "Assignee") all,
or any ratable part of all, of the Loans, its Pro Rata Share of all LC
Obligations, the Commitments and the other rights and obligations of such Bank
hereunder, in a minimum amount of $5,000,000; provided, however, that the
Borrowers and the Agent may continue to deal solely and directly with such Bank
in connection with the interest so assigned to an Assignee until (i) written
notice of such assignment, together with payment instructions, addresses and
related information with respect to the Assignee, shall have been given to the
Borrowers and the Agent by such Bank and the Assignee; (ii) such Bank and its
Assignee shall have delivered to the Borrowers and the Agent an Assignment and
Acceptance in the form of Exhibit E ("Assignment and Acceptance") together with
subject to such assignment and (iii) the assignor Bank or Assignee has paid to
the Agent a processing fee in the amount of $2,500.
(b) From and after the date that the Agent notifies the
assignor Bank that it has received (and provided its consent with respect to)
an executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Bank under the Loan Documents, and (ii) the assignor Bank shall, to the extent
that rights and obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice
by the Agent that it has received an executed Assignment and Acceptance and
payment of the processing fee, (and provided that it consents to such
assignment in accordance with subsection 11.8(a)), the Borrowers shall execute
and deliver to the Agent, if requested by Assignee or assignor Bank new Notes
evidencing such Assignee's assigned Loans and Commitment and, if the assignor
Bank has retained a portion of its Loans and its Commitment, replacement Notes
in the principal amount of the Revolving Loans retained by the assignor Bank
(such Notes to be
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in exchange for, but not in payment of, the Notes held by such Bank).
Immediately upon each Assignee's making its processing fee payment under the
Assignment and Acceptance, this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of the
assigning Bank pro tanto.
(d) Any Bank may at any time sell to one or more
commercial banks or other Persons not Affiliates of the Company (a
"Participant") participating interests in any Loans, the Commitment of that
Bank and the other interests of that Bank (the "originating Bank") hereunder
and under the other Loan Documents; provided, however, that (i) the originating
Bank's obligations under this Agreement shall remain unchanged, (ii) the
originating Bank shall remain solely responsible for the performance of such
obligations, (iii) the Borrowers and the Agent shall continue to deal solely
and directly with the originating Bank in connection with the originating
Bank's rights and obligations under this Agreement and the other Loan
Documents, and (iv) no Bank shall transfer or grant any participating interest
under which the Participant has rights to approve any amendment to, or any
consent or waiver with respect to, this Agreement or any other Loan Document,
except to the extent such amendment, consent or waiver would require unanimous
consent of the Banks as described in the first proviso to Section 11.1. In the
case of any such participation, the Participant shall be entitled to the
benefit of Sections 3.1, 3.3 and 11.5 as though it were also a Bank hereunder,
and if amounts outstanding under this Agreement are due and unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision in this
Agreement, any Bank may at any time create a security interest in, or pledge,
all or any portion of its rights under and interest in this Agreement and the
Note held by it in favor of any Federal Reserve Bank in accordance with
Regulation A of the FRB or U.S. Treasury Regulation 31 CFR Section 203.14, and
such Federal Reserve Bank may enforce such pledge or security interest in any
manner permitted under applicable law.
11.9 Confidentiality. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by the Company or any Subsidiary and provided to it by the Company or
any Subsidiary, or by the Agent on such Company's or Subsidiary's behalf, under
this Agreement or any other Loan Document, and neither it nor any of its
Affiliates shall use any
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such information other than in connection with or in enforcement of this
Agreement and the other Loan Documents or in connection with other business now
or hereafter existing or contemplated with the Company or any Subsidiary;
except to the extent such information (i) was or becomes generally available to
the public other than as a result of disclosure by the Bank, or (ii) was or
becomes available on a non-confidential basis from a source other than the
Company or any Subsidiary, provided that such source is not bound by a
confidentiality agreement with the Company or any Subsidiary known to the Bank;
provided, however, that any Bank may disclose such information (A) at the
request or pursuant to any requirement of any Governmental Authority to which
the Bank is subject or in connection with an examination of such Bank by any
such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection with
any litigation or proceeding to which the Agent, any Bank or their respective
Affiliates may be party; (E) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Loan Document; (F)
to such Bank's independent auditors and other professional advisors; (G) to any
Participant or Assignee, actual or potential, provided that such Person agrees
in writing to keep such information confidential to the same extent required of
the Banks hereunder; (H) as to any Bank or its Affiliate, as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which the Company or any Subsidiary is party or is deemed
party with such Bank or such Affiliate; and (I) to its Affiliates.
11.10 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, without
prior notice to any Borrower, any such notice being waived by the Borrowers to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Bank to or for the credit or
the account of the Borrower against any and all Obligations owing to such Bank,
now or hereafter existing, irrespective of whether or not the Agent or such
Bank shall have made demand under this Agreement or any Loan Document and
although such Obligations may be contingent or unmatured. Each Bank agrees
promptly to notify the applicable Borrower and the Agent after any such set-off
and application made by such Bank; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
11.11 Automatic Debits of Fees. With respect to any commitment fee,
arrangement fee, or other fee, or any other cost or expense (including Attorney
Costs) due and payable to the Agent, BofA or the Arranger under the Loan
Documents, the Borrower hereby irrevocably authorizes BofA to debit any deposit
account of such Borrower with BofA in an amount such that the
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aggregate amount debited from all such deposit accounts does not exceed such
fee or other cost or expense. If there are insufficient funds in such deposit
accounts to cover the amount of the fee or other cost or expense then due, such
debits will be reversed (in whole or in part, in BofA's sole discretion) and
such amount not debited shall be deemed to be unpaid. No such debit under this
Section shall be deemed a set-off. BofA will provide the applicable Borrower
with prompt written notice of any such debit.
11.12 Notification of Addresses, Lending Offices, Etc. Each Bank
shall notify the Agent in writing of any changes in the address to which
notices to the Bank should be directed, of addresses of any Lending Office, of
payment instructions in respect of all payments to be made to it hereunder and
of such other administrative information as the Agent shall reasonably request.
11.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
11.14 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
11.15 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Borrowers, the Banks, the
Agent and the Agent-Related Persons, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary
of, or have any direct or indirect cause of action or claim in connection with,
this Agreement or any of the other Loan Documents.
11.16 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE
NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF ILLINOIS; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWERS, THE AGENT
AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWERS, THE AGENT
AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
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JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
BORROWERS, THE AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
ILLINOIS LAW.
11.17 Waiver of Jury Trial. THE BORROWERS, THE BANKS AND THE AGENT
EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE BORROWERS, THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
11.18 Judgment. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or any other Loan
Document in one currency into another currency, the rate of exchange used shall
be that at which in accordance with normal banking procedures the Agent could
purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of the
Borrowers in respect of any such sum due from it to the Agent hereunder or
under the other Loan Documents shall, notwithstanding any judgment in a
currency (the "Judgment Currency") other than that in which such sum is
denominated in accordance with the applicable provisions of this Agreement (the
"Agreement Currency"), be discharged only to the extent that on the Business
Day following receipt by the Agent of any sum adjudged to be so due in the
Judgment Currency, the Agent may in accordance with normal banking procedures
purchase the Agreement Currency with the Judgment Currency. If the amount of
the Agreement Currency so purchased is less than the sum originally due to the
Agent in the Agreement Currency, the Borrowers agree, as a separate obligation
and notwithstanding any such judgment, to indemnify the Agent or the Person to
whom such obligation was owing against such loss. If the amount of the
Agreement currency so purchased is greater than the sum originally due to the
Agent in such currency, the Agent agrees to return the amount of any excess to
the applicable Borrowers (or to any other Person who may be entitled thereto
under applicable law).
11.19 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and
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understanding among the Borrowers, the Banks and the Agent, and supersedes all
prior or contemporaneous agreements and understandings of such Persons, verbal
or written, relating to the subject matter hereof and thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in Chicago, Illinois by their proper and duly
authorized officers as of the day and year first above written.
SCHAWK, INC.
By:_______________________________
Title:____________________________
By:_______________________________
Title:____________________________
FILTERTEK USA, INC.
By:_______________________________
Title:____________________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By:_______________________________
Title:____________________________
BANK OF AMERICA ILLINOIS,
as a Bank
By:_______________________________
Title:____________________________
THE NORTHERN TRUST COMPANY,
as a Bank
By:_______________________________
Title:____________________________
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NBD BANK, as a Bank
By:_______________________________
Title:____________________________
THE FIRST NATIONAL
BANK OF CHICAGO, as a Bank
By:_______________________________
Title:____________________________
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SCHEDULE 2.1
------------
COMMITMENTS
-----------
AND PRO RATA SHARES
-------------------
Pro Rata
Bank Commitment Share
---- ---------- ------------
Bank of America Illinois $32,000,000 40.00000000%
The First National Bank
of Chicago $16,000,000 20.00000000%
NBD Bank $16,000,000 20.00000000%
The Northern Trust Company $16,000,000 20.00000000%
----------- ------------
TOTAL $80,000,000 100.00000000%
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SCHEDULE 11.2
LENDING OFFICES; ADDRESSES FOR NOTICES
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
Address for Notices:
Bank of America National Trust
and Savings Association
Agency Management Services - Illinois #69596
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Senior Agency Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
Address for Payments:
CURRENCY ACCOUNT
-------- -------
US Dollars Bank of America, San Francisco
Account No. 12333-14599
Ref: Schawk, Inc.
Pounds Sterling Bank of America, London
Account No. 00000000
Ref: Schawk, Inc.
Deutsche Marks Bank of America, Frankfurt
Account No. 00000000
Ref: Schawk, Inc.
Japanese Yen Bank of America, Tokyo
Account No. 00000000
Ref: Schawk, Inc.
French Francs Bank of America, Paris
Account No. 00000000
Ref: Schawk, Inc.
Canadian Dollars Bank of America, Toronto
Account No. 65067-226
Ref: Schawk, Inc.
ECU Bank of America, Brussels
Account No. 00000000
Ref: Schawk, Inc.
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BANK OF AMERICA ILLINOIS,
as a Bank
Address for Notices:
[Address]
THE NORTHERN TRUST COMPANY,
as a Bank
Address for Notices:
[Address]
NBD BANK,
as a Bank
Address for Notices:
[Address]
THE FIRST NATIONAL BANK OF CHICAGO,
as a Bank
Address for Notices:
[Address]
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