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EXHIBIT 10.1
CREDIT AGREEMENT
by and among
WINDMERE-DURABLE HOLDINGS, INC.
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION
as Agent and as Lender,
and
THE OTHER LENDERS PARTY HERETO FROM TIME TO TIME
June 26, 1998
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TABLE OF CONTENTS
Page
ARTICLE I Definitions and Terms...........................................................1
I.1. Definitions.......................................................................1
I.2. Rules of Interpretation..........................................................35
ARTICLE II The Term Loans................................................................37
II.1. Term Loans......................................................................37
II.2. Payment of Principal............................................................37
II.3. Payment of Interest.............................................................38
II.4. Manner of Payment...............................................................39
II.5. Optional Prepayments............................................................39
II.6. Mandatory Prepayments...........................................................40
II.7. Term Notes......................................................................42
II.8. Interest Periods................................................................42
II.9. Conversions and Elections of Subsequent Interest Periods........................42
II.10. Pro Rata Payments..............................................................43
II.11. Use of Proceeds................................................................43
ARTICLE III The Revolving Credit Facility................................................44
III.1. Revolving Loans................................................................44
III.2. Payment of Interest............................................................47
III.3. Payment of Principal...........................................................47
III.4. Manner of Payment..............................................................47
III.5. Revolving Notes and Swing Line Notes...........................................48
III.6. Pro Rata Payments..............................................................48
III.7. Optional Commitment Reductions.................................................48
III.8. Conversions and Elections of Subsequent Interest Periods.......................49
III.9. Increase and Decrease in Amounts...............................................49
III.10. Unused Fee....................................................................50
III.11. Deficiency Advances; Failure to Purchase Participations.......................50
III.12. Use of Proceeds...............................................................51
III.13. Swing Line....................................................................51
ARTICLE IV Letters of Credit.............................................................53
IV.1. Letters of Credit...............................................................53
IV.2. Reimbursement...................................................................53
IV.3. Letter of Credit Facility Fees..................................................57
IV.4. Administrative Fees.............................................................57
ARTICLE V Security.......................................................................58
V.1. Security Interest................................................................58
V.2. Stock Pledge.....................................................................58
V.3. Guaranty.........................................................................58
V.4. Mortgages........................................................................59
V.5. Intellectual Property............................................................59
V.6. Information Regarding Collateral.................................................59
V.7. Further Assurances...............................................................60
ARTICLE VI Change in Circumstances.......................................................61
VI.1. Increased Cost and Reduced Return...............................................61
VI.2. Limitation on Types of Loans....................................................62
VI.3. Illegality......................................................................63
VI.4. Treatment of Affected Loans.....................................................63
VI.5. Compensation....................................................................64
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VI.6. Taxes...........................................................................64
VI.7. Replacement Banks...............................................................66
ARTICLE VII Conditions to Making Loans and Issuing Letters of Credit.....................67
VII.1. Conditions of Initial Advance..................................................67
VII.2. Conditions of Loans and Letter of Credit.......................................71
ARTICLE VIII Representations and Warranties..............................................73
VIII.1. Organization and Authority....................................................73
VIII.2. Loan Documents................................................................73
VIII.3. Solvency......................................................................74
VIII.4. Subsidiaries and Shareholders.................................................74
VIII.5. Ownership Interests...........................................................74
VIII.6. Financial Condition...........................................................74
VIII.7. Title to Properties...........................................................75
VIII.8. Taxes.........................................................................76
VIII.9. Other Agreements..............................................................76
VIII.10. Litigation...................................................................76
VIII.11. Margin Stock.................................................................76
VIII.12. Investment Company...........................................................76
VIII.13. Intellectual Property........................................................77
VIII.14. No Untrue Statement..........................................................77
VIII.15. No Consents, Etc.............................................................77
VIII.16. Employee Benefit Plans.......................................................77
VIII.17. No Default...................................................................79
VIII.18. Hazardous Materials..........................................................79
VIII.19. Employment Matters...........................................................80
VIII.20. RICO.........................................................................80
VIII.21. Year 2000 Compliance.........................................................80
VIII.22. Transaction Agreement Representations........................................81
ARTICLE IX Affirmative Covenants.........................................................82
IX.1. Financial Reports, Etc..........................................................82
IX.2. Maintain Properties and Agreements..............................................84
IX.3. Existence, Qualification, Etc...................................................84
IX.4. Regulations and Taxes...........................................................84
IX.5. Insurance.......................................................................84
IX.6. True Books......................................................................84
IX.7. Right of Inspection.............................................................85
IX.8. Observe all Laws................................................................85
IX.9. Covenants Extending to Other Persons............................................85
IX.10. Officer's Knowledge of Default.................................................85
IX.11. Suits or Other Proceedings.....................................................85
IX.12. Notice of Discharge of Hazardous Material or Environmental Complaint...........85
IX.13. Environmental Compliance.......................................................86
IX.14. Indemnification................................................................86
IX.15. Further Assurances.............................................................86
IX.16. Employee Benefit Plans.........................................................86
IX.17. Termination Events.............................................................87
IX.18. ERISA Notices..................................................................87
IX.19. Continued Operations...........................................................87
IX.20. Use of Proceeds................................................................87
IX.21. New Subsidiaries; Minority Interests...........................................87
ARTICLE X Negative Covenants.............................................................90
X.1. Indebtedness.....................................................................90
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X.2. Liens...........................................................................91
X.3. Investments; Acquisitions.......................................................92
X.4. Merger or Transfer of Assets....................................................92
X.5. Transactions with Affiliates....................................................93
X.6. Compliance with ERISA...........................................................94
X.7. Fiscal Year.....................................................................94
X.8. Dissolution, etc................................................................94
X.9. Hedging Obligations.............................................................95
X.10. Dividends, Redemptions and Other Payments......................................95
X.11. Subordinated Debt..............................................................95
X.12. Defaults Under Other Agreements................................................95
X.13. Compensation; Reimbursement of Expenses........................................96
X.14. Change in Accountants..........................................................96
X.15. Limitations on Sales and Leasebacks............................................96
X.16. Negative Pledge Clauses........................................................96
X.17. Intellectual Property..........................................................96
X.18. Licenses.......................................................................96
X.19. Amendment of Documents.........................................................97
X.20. Limitations on Certain Restrictive Covenants...................................97
X.21. Limitations on Business Activities.............................................97
X.22. Financial Covenants............................................................97
ARTICLE XI Events of Default and Acceleration...........................................101
XI.1. Events of Default..............................................................101
XI.2. Agent to Act...................................................................105
XI.3. Cumulative Rights..............................................................105
XI.4. No Waiver......................................................................105
XI.5. Allocation of Proceeds.........................................................105
ARTICLE XII The Agent...................................................................107
XII.1. Appointment, Powers, and Immunities...........................................107
XII.2. Reliance by Agent.............................................................107
XII.3. Defaults......................................................................108
XII.4. Rights as Lender..............................................................108
XII.5. Indemnification...............................................................108
XII.6. Non-Reliance on Agent and Other Lenders.......................................109
XII.7. Resignation of Agent..........................................................109
XII.8. Fees..........................................................................109
ARTICLE XIII Miscellaneous..............................................................110
XIII.1. Assignments and Participations...............................................110
XIII.2. Notices......................................................................112
XIII.3. Right of Set-off; Adjustments................................................113
XIII.4. Survival.....................................................................114
XIII.5. Expenses; Indemnification....................................................114
XIII.6. Amendments and Waivers.......................................................115
XIII.7. Counterparts.................................................................116
XIII.8. Termination..................................................................116
XIII.9. Confidentiality..............................................................116
XIII.10. Severability................................................................117
XIII.11. Entire Agreement............................................................117
XIII.12. Agreement Controls..........................................................117
XIII.13. Usury Savings Clause........................................................117
XIII.14. GOVERNING LAW; WAIVER OF JURY TRIAL.........................................118
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 26, 1998 (the "Agreement"), is
made by and among WINDMERE-DURABLE HOLDINGS, INC., a Florida corporation having
its principal place of business in Miami Lakes, Florida (the "Borrower"),
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association organized and
existing under the laws of the United States, in its capacity as a Lender
("NationsBank"), and each other financial institution executing and delivering a
signature page hereto and each other financial institution which may hereafter
execute and deliver an instrument of assignment with respect to this Agreement
pursuant to Section 13.1 hereof (hereinafter such financial institutions may be
referred to individually as a "Lender" or collectively as the "Lenders"), and
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association organized and
existing under the laws of the United States, in its capacity as agent for the
Lenders (in such capacity, and together with any successor agent appointed in
accordance with the terms of Article XII, the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make available to
it credit facilities up to an aggregate amount of $345,000,000 consisting of (a)
a revolving credit facility in the maximum aggregate principal amount at any
time outstanding of $160,000,000, which shall include (i) a letter of credit
facility of $20,000,000 and (ii) a swing line facility of $10,000,000, and (b) a
term loan A facility in the maximum principal amount of $90,000,000, (c) a term
loan B facility in the maximum principal amount of $75,000,000 and (d) a term
loan C facility in the maximum principal amount of $20,000,000; and
WHEREAS, the Lenders are willing to make all such facilities available
to the Borrower upon the terms and conditions set forth herein;
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:
ARTICLE I
Definitions and Terms
I.1. Definitions. For the purposes of this Agreement, in addition
to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Acquisition" means the acquisition of (i) a controlling
equity interest in another Person (including the purchase of an option,
warrant or convertible or similar type security to acquire such a
controlling interest at the time it becomes exercisable by the
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holder thereof), whether by purchase of such equity interest or upon
exercise of an option or warrant for, or conversion of securities into,
such equity interest, or (ii) assets of another Person which constitute
any material part of the assets of such Person or of a line or lines of
business conducted by such Person.
"Advance" means a borrowing under the Revolving Credit
Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan or
the advance of any Term Loan on the Closing Date.
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is
under common control with the Borrower; or (ii) which beneficially owns
or holds 10% or more of any class of the outstanding voting stock of
the Borrower or 10% or more of any class of the outstanding voting
stock (or in the case of a Person which is not a corporation, 10% or
more of the equity interest) of which is beneficially owned or held by
the Borrower. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of
voting stock, by contract or otherwise.
"Applicable Commitment Percentage" means, with respect to each
Lender at any time, (i) with respect to the Revolving Credit Facility
and the Participations, a fraction, the numerator of which shall be
such Lender's Revolving Credit Commitment and the denominator of which
shall be the Total Revolving Credit Commitment, and (ii) with respect
to each of the Term Loan A Facility, Term Loan B Facility or Term Loan
C Facility, as the case may be, a fraction, the numerator of which
shall be such Lender's Term Loan A Commitment, Term Loan B Commitment
or Term Loan C Commitment, as applicable, and the denominator of which
shall be the Total Term Loan A Commitment, the Total Term Loan B
Commitment or the Total Term Loan C Commitment, as applicable, which
Applicable Commitment Percentage in each case for each Lender as of the
Closing Date is as set forth in Exhibit A hereto; provided that each
Applicable Commitment Percentage of each Lender shall be increased or
decreased to reflect any assignments to or by such Lender effected in
accordance with Section 13.1 hereof.
"Applicable Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an
affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or an
affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrower by written notice in accordance with the
terms hereof as the office by which its Loans of such Type are to be
made and maintained.
"Applicable Margin" means that percent per annum set forth
below, which shall be based upon the Consolidated Leverage Ratio for
the period of four consecutive fiscal quarters most recently ended as
specified below:
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Applicable Applicable Applicable Applicable
Margin for Margin for Margin for Margin for
Eurodollar Rate Eurodollar Rate Base Rate Base Rate
Loans that are Loans that are Loans that are Loans that are
Revolving Loans Segments of Revolving Loans Segments of
Consolidated or Segments of Term Loan B or Segments of Term Loan B
Tier Leverage Ratio Term Loan A and Term Loan C Term Loan A and Term Loan C
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I Equal to or less 1.75% 2.75% .75% 1.75%
than 4.00 to 1.00
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II Greater than 4.00 2.00% 2.75% 1.00% 1.75%
to 1.00 and less
than or equal to
4.50 to 1.00
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III Greater than 4.50 2.25% 3.00% 1.25% 2.00%
to 1.00 and less
than or equal to
5.00 to 1.00
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IV Greater than 5.00 2.50% 3.00% 1.50% 2.00%
to 1.00
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The Applicable Margin shall be established at the end of each fiscal
quarter of the Borrower (each, a "Determination Date"). Any change in
the Applicable Margin following each Determination Date shall be
determined based upon the computations set forth in the certificate
furnished to the Agent pursuant to Section 9.1(a) and (b) hereof,
subject to review and confirmation of such computations by the Agent,
and shall be effective (the "Effective Date") commencing on the first
Business Day next following the date such certificate is received (or,
if earlier, the date such certificate was required to be delivered)
until the first Business Day following the date on which a new
certificate is delivered or is required to be delivered, whichever
shall first occur; provided however, if the Borrower shall fail to
deliver any such certificate within the time period required by Section
9.1 hereof, then the Applicable Margin shall be Tier IV until the
appropriate certificate is so delivered. From the Closing Date to the
first Effective Date next following December 31, 1998 (the "Initial
Period"), the Applicable Margin shall be as set forth in Tier IV;
provided further, however, that if the Stock Offering is consummated
prior to the end of the Initial Period, the Applicable Margin shall be
as set forth in Tier III
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for the remainder of the Initial Period; and provided further, however,
that for the Determination Dates occurring December 31, 1998 and March
31, 1999 the calculation of Consolidated EBITDA for determining the
Consolidated Leverage Ratio (for the purposes of calculating the
Applicable Margin only) shall be made as if the HPG Acquisition were
consummated on January 1, 1998 and shall include such pro forma
adjustments as were permitted in the Registration Statement, all in
form satisfactory to the Agent.
"Applicable Period" means (i) for the fiscal quarter of the
Borrower and its Subsidiaries ending June 30, 1999 and each fiscal
quarter of the Borrower and its Subsidiaries thereafter, a Four-Quarter
Period, and (ii) for the fiscal quarters of the Borrower and its
Subsidiaries ending September 30, 1998, December 31, 1998, and March
31, 1999 the one, two and three fiscal quarter periods ending on such
dates. For purposes of determining the Consolidated Leverage Ratio, the
Consolidated Interest Coverage Ratio and the Consolidated Fixed Charge
Ratio for the one, two or three fiscal quarter periods of the Borrower
and its Subsidiaries ending September 30, 1998, December 31, 1998 and
March 31, 1999, Consolidated EBITDA, Consolidated Interest Expense and
Consolidated Fixed Charges shall be determined by multiplying the
Adjusted Consolidated Fixed Charges (other than required principal
payments) for such periods by four, two and four-thirds, respectively.
Commencing with the fiscal quarter ending June 30, 1999 and thereafter,
such ratios shall be calculated for a Four-Quarter Period.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of
Credit.
"Approved Receivables Insurance Program" means a receivables
insurance program with NationsBanc Commercial Credit approved in
writing by the Required Lenders.
"Approved Fund" means, with respect to any Lender that is a
fund that invests in commercial loans, any other fund that invests in
commercial loans, and is managed by the same investment advisor as such
Lender or by an Affiliate of such investment advisor.
"Approved Stock Option Plan" means (a) each stock option plan
(whether relating to employees or directors) or agreement pursuant to
which the options listed on Schedule 1.4 hereto are listed and (b) any
executive or employee stock option or incentive plan hereafter adopted
by the board of directors of the Borrower.
"Asheboro Facility" means the manufacturing facility of the
Seller leased by the Borrower and located at 0000 Xxxxxxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxx Xxxxxxxx 00000.
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"Asset Disposition" means any voluntary disposition, whether
by sale, lease or transfer, other than as permitted under Section 10.4
hereof, of (a) any or all of the assets, excluding cash and cash
equivalents, of the Borrower or its Subsidiaries, and (b) any of the
capital stock (including the Salton/Maxim Shares), or securities or
investments exchangeable, exercisable or convertible for or into, or
otherwise entitling the holder to receive any of the capital stock, of
any Person (other than a disposition to a Guarantor).
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B hereto (with blanks appropriately
filled in) delivered to the Agent in connection with an assignment of a
Lender's interest under this Agreement pursuant to Section 13.1 hereof.
"Authorized Representative" means any of the President or any
Vice President of the Borrower or, with respect to financial matters,
the chief financial officer of the Borrower, or any other Person
expressly designated by the Board of Directors of the Borrower (or the
appropriate committee thereof) as an Authorized Representative of the
Borrower, as set forth from time to time in a certificate in the form
of Exhibit C hereto.
"Base Rate" means, for any day, the sum of (a) higher of (i)
the Federal Funds Rate for such day plus one-half of one percent (0.5%)
and (ii) the Prime Rate for such day, plus (b) the Applicable Margin.
Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or Federal Funds Rate.
"Base Rate Loan" means a Revolving Loan or Segment of a Term
Loan for which the rate of interest is determined by reference to the
Base Rate.
"Base Rate Refunding Loan" means a Base Rate Loan made either
(i) to satisfy Reimbursement Obligations arising from a drawing under a
Letter of Credit or (ii) to pay NationsBank in respect of Swing Line
Outstandings.
"Base Rate Segment" means a Segment bearing interest or to
bear interest at the Base Rate.
"Black & Xxxxxx License Agreement" means that certain
Trademark License Agreement dated as of the date hereof among The Black
& Xxxxxx Corporation and the Borrower.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Borrower's Account" means a demand deposit account with the
Agent, which
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may be maintained at one or more offices of the Agent or an agent of
the Agent.
"Borrowing Base" means, as of the date of determination
thereof, (i) Eligible Receivables multiplied by 85% plus (ii) the
value, determined at the lower of cost or market value in accordance
with GAAP, of all Eligible Inventory multiplied by (a) for the period
from July 1 through December 31 of each year, 65% and (b) at all other
times, 50%, less (iii) 50% of the aggregate amount of all Indebtedness
of Foreign Subsidiaries permitted under Section 10.1(h) outstanding as
of such date of determination; provided, however, at no time shall the
amount of the Borrowing Base attributable to Eligible Inventory exceed
the amount of the Borrowing Base attributable to Eligible Receivables.
"Borrowing Base Certificate" means a certificate of an
Authorized Representative in the form attached hereto as Exhibit K
hereto.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility or a Swing Line Loan, in the forms of Exhibits D-1 and D-2,
respectively.
"Bridge Loan Agreement" means that certain Bridge Loan
Agreement dated as of the date hereof by and between the Borrower and
NationsBridge providing for the incurrence of the Subordinated Bridge
Debt.
"Bridge Loan Documents" means the Bridge Loan Agreement, the
executed version of each document attached thereto as an exhibit and
all other documents and agreements delivered or entered into in
connection with the transactions contemplated thereby.
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
States of New York and North Carolina are authorized or obligated by
law, executive order or governmental decree to be closed and, (ii) with
respect to any Eurodollar Rate Loan, any day which is a Business Day,
as described above, and on which the relevant international financial
markets are open for the transaction of business contemplated by this
Agreement in London, England, New York, New York and Charlotte, North
Carolina.
"Capital Expenditures" means, with respect to the Borrower and
its Subsidiaries, for any period the sum of (without duplication) (i)
all expenditures (whether paid in cash or accrued as liabilities) by
the Borrower or any Subsidiary during such period for items that would
be classified as "property, plant or equipment" or comparable items on
the consolidated balance sheet of the Borrower and its Subsidiaries,
including without limitation all transactional costs incurred in
connection with such expenditures provided the same have been
capitalized, and (ii) with respect to any Capital Lease entered into by
the Borrower or its Subsidiaries during such period, the present value
of the lease
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payments due under such Capital Lease over the term of such Capital
Lease applying a discount rate equal to the interest rate provided in
such lease (or in the absence of a stated interest rate, the rate used
in preparation of the financial statements described in Section 9.1(a))
all the foregoing in accordance with GAAP applied on a Consistent
Basis.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
"Closing Date" means the date as of which this Agreement is
executed by the Borrower, the Lenders and the Agent and on which the
conditions set forth in Section 7.1 hereof have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Collateral" means, collectively, all property of the
Borrower, any Subsidiary or any other Person in which the Agent or any
Lender is granted a Lien as security for all or any portion of the
Obligations under any Security Instrument.
"Collateral Assignment of Contracts" means that certain
Collateral Assignment of Contracts dated as of the date hereof by HP
Mexico in favor of the Agent pursuant to which HP Mexico has
collaterally assigned all of their rights and interests under certain
material contracts identified therein.
"Commitments" means the Revolving Credit Commitment, the Term
Loan A Commitment, the Term Loan B Commitment and the Term Loan C
Commitment.
"Company Securities" means common stock of the Borrower, par
value $.10 per share, issued in connection with the Permanent Junior
Financing in replacement of at least $100,000,000 in principal amount
of the Bridge Notes.
"Condemnation Award" means the cash proceeds received by the
Borrower or any Subsidiary from any condemnation or other taking (by
eminent domain or otherwise) of the whole or any part of the property
of the Borrower or any Subsidiary by any Governmental Authority.
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the preparation
of the audited financial statements of the Borrower referred to in
Section 8.6(a) hereof.
"Consolidated EBITDA" means, with respect to the Borrower and
its
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Subsidiaries, for the Applicable Period ending as of the date of
determination, the sum of, without duplication, (i) Consolidated Net
Income, (ii) Consolidated Interest Expense, (iii) taxes on income, (iv)
amortization and (v) depreciation, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis; provided,
however, that with respect to an Acquisition that is accounted for as a
"purchase", for the four fiscal quarters ending after the date of such
Acquisition, Consolidated EBITDA shall include the results of
operations of such acquired Person or assets, which amounts shall be
determined on a historical pro forma basis as if such Acquisition had
been consummated as a "pooling of interest".
"Consolidated Excess Cash Flow" means, with respect to the
Borrower and its Subsidiaries for any Fiscal Year, (i) Consolidated
EBITDA for such period (including therein any net gain or loss, as
applicable, of an extraordinary nature otherwise excluded from the
calculation thereof in the definition of "Consolidated Net Income")
minus (ii) the sum of, without duplication, for such period (A) Capital
Expenditures, plus (B) Consolidated Interest Expense, plus (C) required
principal payments on Consolidated Funded Indebtedness and optional
prepayments of the Term Loans, plus (D) accrued taxes on income, plus
(E) all cash paid as part of the cost of any Acquisition plus (F) all
amounts included in the calculation of Consolidated EBITDA for the
purposes of this definition to the extent such amounts are subject to
the mandatory prepayment provisions of Section 2.6(a), (b), (c) or (e)
hereof.
"Consolidated Fixed Charge Ratio" means, with respect to the
Borrower and its Subsidiaries for the Applicable Period, the ratio of
(i) Consolidated EBITDA for such period less Capital Expenditures for
such period to (ii) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" means, with respect to Borrower
and its Subsidiaries for the Applicable Period, the sum of, without
duplication, (i) Consolidated Interest Expense, during such period, and
(ii) the principal amount of Consolidated Funded Indebtedness due and
payable during such period, all determined in accordance with GAAP
applied on a Consistent Basis.
"Consolidated Funded Indebtedness" means at any time as of
which the amount thereof is to be determined, all Indebtedness of the
Borrower and its Subsidiaries, all determined on a consolidated basis
in accordance with GAAP applied on a Consistent Basis.
"Consolidated Interest Coverage Ratio" means, with respect to
the Borrower and its Subsidiaries, for the Applicable Period, the ratio
of (i) Consolidated EBITDA to (ii) Consolidated Interest Expense.
"Consolidated Interest Expense" means, with respect to any
period of
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computation thereof, the gross interest expense of the Borrower and its
Subsidiaries, including without limitation (i) the amortization of debt
discounts, (ii) the amortization of all fees payable in connection with
the incurrence of Indebtedness to the extent included in interest
expense, and (iii) the portion of any liabilities incurred in
connection with Capital Leases allocable to interest expense, all
determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Leverage Ratio" means, for any date for which
the computation thereof is being made, the ratio of (i) Consolidated
Funded Indebtedness (determined as at such date) to (ii) Consolidated
EBITDA for the Applicable Period ending on (or most recently ended
prior to) such date.
"Consolidated Net Income" means, for any period of computation
thereof, the gross revenues from operations of the Borrower and its
Subsidiaries less all operating and non-operating expenses (not related
to extraordinary events) of the Borrower and its Subsidiaries including
taxes on income, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis; but excluding (for all
purposes other than (x) compliance with Section 10.23(a) hereof and (y)
the computation of Consolidated EBITDA utilized to determine Excess
Cash Flow) in such calculation (1) the amount of any net gains on the
sale, conversion or other disposition of capital assets, (2) the amount
of any net gains on the acquisition, retirement, sale or other
disposition of capital stock and other securities of the Borrower or
its Subsidiaries, (3) the amount of any net gains on the collection of
proceeds of life insurance policies, (4) any write-up of any asset, (5)
any other net gain of an extraordinary nature and (6) dividends and
distributions in respect of minority investments in Persons other than
Subsidiaries, all as determined in accordance with GAAP applied on a
Consistent Basis; provided, however, that for the purposes of
determining compliance with Section 10.23(a) hereof, there shall be
disregarded any increase in Consolidated Net Income upon giving effect
to an Acquisition which results from the treatment of such Acquisition
as a "pooling of interest" although such Acquisition was a "purchase"
transaction for GAAP purposes.
"Consolidated Net Worth" means the total of Borrower's and its
Subsidiaries' shareholders' equity as determined in accordance with
GAAP on a Consistent Basis.
"Contingent Obligation" of any Person means all contingent
liabilities required (or which, upon the creation or incurring thereof,
would be required) to be included in the financial statements
(including footnotes) of such Person in accordance with GAAP applied on
a Consistent Basis, including Statement No. 5 of the Financial
Accounting Standards Board, and any obligation of such Person
guaranteeing or in effect guaranteeing any Indebtedness, dividend or
other obligation of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including obligations of such
Person however incurred:
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(1) to purchase such Indebtedness or other
obligation or any property or assets constituting security
therefor;
(2) to advance or supply funds in any manner (i)
for the purchase or payment of such Indebtedness or other
obligation, or (ii) to maintain a minimum working capital, net
worth or other balance sheet condition or any income statement
condition of the primary obligor;
(3) to grant or convey any lien, security
interest, pledge, charge or other encumbrance on any property
or assets of such Person to secure payment of such
Indebtedness or other obligation;
(4) to lease property or to purchase securities
or other property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(5) otherwise to assure the owner of the
Indebtedness or such obligation of the primary obligor against
loss in respect thereof.
Contingent Obligations shall be computed at the amount which,
in light of all the facts and circumstances existing at the time,
represent the amount which can reasonably be expected to become an
actual or matured liability of such Person.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.9 hereof of a Eurodollar Rate Loan
of one Type as a Eurodollar Rate Loan of the same Type from one
Interest Period to the next Interest Period.
"Control Subsidiary" means any entity not constituting a
Subsidiary hereunder but which would otherwise be included as a
subsidiary of the Borrower for consolidated financial reporting
purposes in accordance with GAAP.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 2.9 or 3.8 or Article VI hereof of one
Type of Loan into another Type of Loan.
"Core Business" means, with respect to the Borrower and its
Subsidiaries, the business of manufacturing and distributing of small
household and outdoor appliances, pet products and related items
consistent with past practices.
"Cost of Acquisition" means, with respect to any Acquisition,
as at the date of consummation of any such Acquisition, the sum of the
following (without duplication): (i) the value of the capital stock,
warrants or options to acquire capital stock of the Borrower or any
Subsidiary to be transferred in connection therewith, (ii) any cash or
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other property and the unpaid principal amount of any debt instrument
given as consideration, (iii) any Indebtedness assumed by the Borrower
or its Subsidiaries in connection with such Acquisition, and (iv) out
of pocket transaction costs for the services and expenses of attorneys,
accountants and other consultants incurred in effecting such a
transaction, and other similar transaction costs so incurred. For
purposes of determining the Cost of Acquisition for any transaction,
(A) the capital stock of the Borrower shall be valued (I) at its market
value as reported on the New York Stock Exchange with respect to shares
that are freely tradeable, and (II) with respect to shares that are not
freely tradeable, as determined by the Board of Directors of the
Borrower and, if requested by the Agent, determined to be a reasonable
valuation by the independent public accountants referred to in Section
9.1(a) hereof, (B) the capital stock of any Subsidiary shall be valued
as determined by the Board of Directors of the Borrower or such
Subsidiary and, if requested by the Agent, determined to be a
reasonable valuation by the independent public accountants referred to
in Section 9.1(a) hereof, and (C) with respect to any Acquisition
accomplished pursuant to the exercise of options or warrants or the
conversion of securities, the Cost of Acquisition shall include both
the cost of acquiring such option, warrant or convertible security as
well as the cost of exercise or conversion.
"Credit Party" means, collectively, the Borrower, each
Guarantor and each other Person providing Collateral pursuant to any
Security Instrument.
"Debt Offering" means a public or private offering of
Indebtedness (including, without limitation, any security constituting
Indebtedness which is exchangeable, exercisable or convertible for or
into, or otherwise entitling the holder to receive, equity securities)
of the Borrower or any Subsidiary (other than Indebtedness among the
Borrower and any Subsidiary or one Subsidiary and another Subsidiary);
provided, however, the term "Debt Offering" shall not include the
issuance of the Permanent Subordinated Notes.
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan, until the end of the Interest Period applicable thereto, a rate
of two percent (2%) above the Eurodollar Rate applicable to such Loan,
and thereafter at a rate of interest per annum which shall be two
percent (2%) above the Base Rate, (ii) with respect to Base Rate Loans,
Swing Line Loans and Reimbursement Obligations, at a rate of interest
per annum which shall be two percent (2%) above the Base Rate and (iii)
in any case, the maximum rate permitted by applicable law, if lower.
"Direct Foreign Control Subsidiary" means any Foreign Control
Subsidiary whose outstanding voting stock is owned by the Borrower or a
Domestic Subsidiary.
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"Direct Foreign Subsidiary" means any Foreign Subsidiary whose
outstanding voting stock is owned by the Borrower or a Domestic
Subsidiary.
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Domestic Control Subsidiary" means any Control Subsidiary
which is organized under the laws of one of the states comprising the
United States of America, any territory thereof or the District of
Columbia.
"Domestic Subsidiary" means any Subsidiary which is organized
under the laws of one of the states comprising the United States of
America, any territory thereof or the District of Columbia.
"Eligible Assignee" means (i) a Lender; (ii) an affiliate or
Approved Fund of a Lender; and (iii) any other Person approved by the
Agent and, unless an Event of Default has occurred and is continuing at
the time any assignment is effected in accordance with Section 13.1
hereof, the Borrower, such approval not to be unreasonably withheld or
delayed by the Borrower or the Agent and such approval to be deemed
given by the Borrower if no objection is received by the assigning
Lender and the Agent from the Borrower within five Business Days after
notice of such proposed assignment has been provided by the assigning
Lender to the Borrower; provided, however, that neither the Borrower
nor an affiliate of the Borrower shall qualify as an Eligible Assignee.
"Eligible Inventory" means that domestic, Canadian and Mexican
inventory owned by the Borrower or any Guarantor which is determined by
the Agent in the reasonable exercise of its discretion to be Eligible
Inventory; provided, however, that none of the following shall be
Eligible Inventory:
(i) inventory that is kept in any location other
than the warehouses identified on Schedule 1.2 hereto as owned
or leased warehouse locations;
(ii) inventory that is unfinished, damaged,
representing returned goods or is otherwise not readily
marketable;
(iii) inventory that is subject to any Lien or
otherwise not in conformity with any representation or
warranty contained in the Security Instruments; and
(iv) inventory upon which a security interest in
favor of the Agent for the benefit of the Lenders may not be
perfected.
"Eligible Receivables" means (a) all accounts receivable of
Subsidiaries owing from Foreign Account Debtors (as defined in clause
(iii) below) which are subject to an Approved Receivables Insurance
Program less any discount, reserve or similar offset or
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recourse to the Borrower or any Subsidiary applicable under such
Approved Receivables Insurance Program and (b) those trade accounts
receivable of the Borrower and each Domestic Subsidiary of the Borrower
which are determined by the Agent in the reasonable exercise of its
discretion to be an Eligible Receivable; provided, however, that none
of the following shall be Eligible Receivables:
(ii) intercompany receivables;
(iii) receivables owed by the United States
government or any of its states, departments, agencies or
instrumentalities of any thereof;
(iv) unless supported by a letter of credit
issued by a financial institution, other than NationsBank,
acceptable to the Agent, or payment of which is guaranteed or
insured in a manner acceptable to the Agent and as to which
there is a no recourse against the Borrower, receivables owed
by any Person not a United States or Canadian citizen or
corporation, partnership or other entity organized under the
laws of the United States or province of Canada or the
Commonwealth of Canada whose principal office is not located
within the United States or Canada (a "Foreign Account
Debtor");
(v) receivables of any customer more than 50% of
which receivables due the Borrower or any Domestic
Subsidiaries are more than 90 days past due;
(vi) receivables that are due or unpaid for more
than ninety (90) days from the original due date thereof;
(vii) the portion of any receivable which is
subject to any offset, deduction, defense, dispute or
counterclaim, so long as no contest or dispute exist and no
payment is being withheld with respect to the remainder of
such receivable; and
(viii) receivables of any customer with respect to
which any bankruptcy or insolvency proceeding has been
commenced or filed for and no court order exists directing
payment with respect to such receivable.
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Agent:
(ii) Government Securities;
(iii) obligations of any corporation organized
under the laws of any state of the United States of America or
under the laws of any other nation, payable in the United
States of America, expressed to mature not later than 180
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18
days following the date of issuance thereof and rated in an
investment grade rating category by S&P and Xxxxx'x;
(iv) interest bearing demand or time deposits
issued by any Lender or certificates of deposit maturing
within one year from the date of issuance thereof and issued
by a bank or trust company organized under the laws of the
United States or of any state thereof having capital surplus
and undivided profits aggregating at least $400,000,000 and
being rated "A-" or better by S&P or "A3" or better by
Xxxxx'x;
(v) Repurchase Agreements;
(vi) Municipal Obligations;
(vii) Pre-Refunded Municipal Obligations;
(viii) shares of mutual funds which invest in
obligations described in paragraphs (a) through (f) above, the
shares of which mutual funds are at all times rated "AAA" by
S&P;
(ix) tax-exempt or taxable adjustable rate
preferred stock issued by a Person having a rating of its long
term unsecured debt of "A" or better by S&P or "A-1" or better
by Xxxxx'x; and
(x) asset-backed remarketed certificates of
participation representing a fractional undivided interest in
the assets of a trust, which certificates are rated at least
"A-1" by S&P and "P-1" by Xxxxx'x.
"Employee Benefit Plan" means (i) any employee benefit plan,
including any Pension Plan, within the meaning of Section 3(3) of ERISA
which (A) is maintained for employees of the Borrower, any of its ERISA
Affiliates, or any Subsidiary or is assumed by the Borrower, any of its
ERISA Affiliates, or any Subsidiary in connection with any Acquisition
or (B) has at any time within the last six years been maintained for
the employees of the Borrower, any current or former ERISA Affiliate,
or any Subsidiary and (ii) any plan, arrangement, understanding or
scheme maintained by the Borrower or any Subsidiary that provides
retirement, deferred compensation, employee or retiree medical or life
insurance, severance benefits or any other benefit covering any
employee or former employee and which is administered under any Foreign
Benefit Law or regulated by any Governmental Authority other than the
United States of America.
"Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, the
Resource Conservation and Recovery
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Act, the Toxic Substances Control Act, as amended, the Clean Air Act,
as amended, the Clean Water Act, as amended, any other "Superfund" or
"Superlien" law or any other federal, or applicable state or local
statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct
concerning, any pollutant, contaminant, or hazardous, toxic or
dangerous waste, substance or material.
"Equity Offering" means a public or private offering of equity
securities (including, without limitation, any security or investment
not constituting Indebtedness exchangeable, exercisable or convertible
for or into, or otherwise entitling the holder to receive, equity
securities) of the Borrower or any Subsidiary (other than securities
issued to the Borrower or another Subsidiary); provided, however, the
term "Equity Offering" shall not include (i) any issuance of equity
securities whose aggregate market value when combined with all other
similar equity issuances, does not exceed $10,000,000 and which
issuance in connection with the exercise of stock options or warrants
granted to, or purchase of restricted stock by, eligible participants
under an Approved Stock Option Plan or (ii) the Stock Offering.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder.
"ERISA Affiliate" means any Person or trade or business which
is a member of a group which is under common control with the Borrower
who together with the Borrower, is treated as a single employer within
the meaning of Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Rate Loan" means a Revolving Loan or Segment of a
Term Loan for which the rate of interest is determined by reference to
the Eurodollar Rate.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
Rate -------------------------------- Margin
1- Eurodollar Reserve Percentage
"Eurodollar Rate Segment" means a Segment bearing interest or
to bear interest at the Eurodollar Rate.
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D or any successor regulation, as the maximum
reserve requirement (including any basic, supplemental, emergency,
special, or marginal reserves) applicable with respect to Eurocurrency
liabilities as that term is defined in Regulation D (or against any
other category of
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liabilities that includes deposits by reference to which the interest
rate of Eurodollar Rate Loans is determined), whether or not the Agent
or any Lender has any Eurocurrency liabilities subject to such
requirements, without benefits of credits or proration, exceptions or
offsets that may be available from time to time to the Agent or any
Lender. The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve
Percentage.
"Event of Default" means any of the occurrences set forth as
such in Section 11.1 hereof.
"Existing Letters of Credit" means the letters of credit
listed on Schedule 1.3 hereto issued by NationsBank in favor of
Windmere Corporation under the Credit Agreement dated October 11, 1996.
"Facilities" means the Revolving Credit Facilities and the
Term Loan Facilities.
"Facility Guaranty" means (i) the Guaranty Agreement dated as
of the date hereof between the Guarantors and the Agent for the benefit
of the Lenders, and (ii) any other Facility Guaranty otherwise
delivered pursuant to Section 9.21 hereof, each in the form of Exhibit
J hereto and each as the same may be amended, modified or supplemented.
"Facility Termination Date" means the date on which both the
Revolving Credit Termination Date and the Term Loan Termination Date
shall have occurred, no Letters of Credit shall remain outstanding or
all the Letters of Credit shall have been cash collateralized upon
terms satisfactory to the Agent, all Swap Agreements shall have been
terminated or cash collateralized upon terms satisfactory to the Agent
and the Borrowers shall have fully paid and satisfied in full all other
Obligations.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate
charged to the Agent (in its individual capacity) on such day on such
transactions as determined by the Agent.
"Fiscal Year" means the twelve month fiscal period of the
Borrower beginning January 1 of each calendar year and ending the
following December 31 of such calendar year.
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"Florida Office" means the land and buildings owned by the
Borrower located at 0000 Xxxxx Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxx.
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan.
"Foreign Control Subsidiary" means any Control Subsidiary
organized under the laws of any jurisdiction other than one of the
states comprising the United States of America, any territory thereof
or the District of Columbia.
"Foreign Subsidiary" means any Subsidiary organized under the
laws of any jurisdiction other than one of the states comprising the
United States of America, any territory thereof or the District of
Columbia.
"GAAP" or "Generally Accepted Accounting Principles" means
generally accepted accounting principles, being those principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board, the American Institute of Certified Public Accountants
or which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report.
"General Assignment and Acceptance Agreement" means that
certain General Assignment and Acceptance Agreement dated as of the
date hereof and effective immediately prior to the effectiveness of
this Agreement by and among the Existing Lenders, the Lenders, the
Agent and the Borrower.
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on which are
fully and unconditionally guaranteed by, the United States of America.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government, including but not limited to Malaysia,
Mexico and Canada.
"Guarantors" means the Domestic Subsidiaries.
"Hazardous Material" means and includes any pollutant,
contaminant, hazardous, toxic or dangerous waste, substance or material
(including petroleum products, asbestos-containing materials and lead),
the management, generation, handling, storage,
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transportation, disposal, treatment, release, discharge or emission of
which is subject to any Environmental Law.
"Hedging Obligations" means any and all obligations of the
Borrower, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under
(i) any and all agreements, devices or arrangements designed to protect
at least one of the parties thereto from the fluctuations of interest
rates, currency exchange rates or forward rates applicable to such
party's commodities, assets, liabilities or exchange transactions,
including, but not limited to, Dollar-denominated or cross-currency
interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward
rate currency or interest rate options, puts, warrants and those
commonly known as interest rate "swap" agreements, and forward
commodity price options, puts, warrants and those commonly known as
commodity "swap" agreements; and (ii) any and all cancellations,
buybacks, reversals, terminations or assignments of any of the
foregoing;
"HP Mexico" means Hosehold Products de Mexico, S.A. de C.V.
"HPG" means the Household Products Group of the Seller,
excluding the cleaning and lighting businesses, as described in the
Transaction Agreement.
"HPG Acquisition" means the purchase by the Borrower of HPG
from the Seller pursuant to the terms of the Transaction Documents.
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness of
such Person for the acquisition of property other than purchases of
property, product, merchandise and services in the ordinary course of
business (so long as such amounts are payable in less than twelve (12)
months), all indebtedness secured by any Lien on the property of such
Person whether or not such indebtedness is assumed (except unperfected
Liens incurred in the ordinary course of business and not in connection
with the borrowing of money), all liability of such Person by way of
endorsements (other than for collection or deposit in the ordinary
course of business), all Contingent Obligations, the face amount of all
issued and outstanding letters of credit, and all Hedging Obligations;
provided that in no event shall the term Indebtedness include capital
stock surplus and retained earnings, minority interests in the common
stock of Subsidiaries, lease obligations (other than pursuant to
Capital Leases), reserves for deferred income taxes and investment
credits, other deferred credits or reserves.
"Indebtedness for Money Borrowed" means with respect to any
Person, without duplication, all amounts owed, including principal,
interest, fees, indemnities, costs, premium, damages and expenses, in
respect of money borrowed, including without
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limitation the Subordinated Bridge Debt and the Permanent Subordinated
Notes and all Capital Leases and the deferred purchase price of any
property or asset, evidenced by a promissory note, bond, debenture or
similar written obligation for the payment of money (including
conditional sales or similar title retention agreements), other than
trade payables incurred in the ordinary course of business.
"Indenture" means the indenture entered into in connection
with the issuance of the Permanent Subordinated Notes.
"Insurance Award" means the net cash proceeds of any payment
made by any casualty insurer or self-insurance program of the Borrower
or any Subsidiary for any casualty or other loss with respect to the
whole or any part of the property of the Borrower or any Subsidiary
after deduction for taxes, fees and reasonable expenses incurred in the
realization thereof.
"Intellectual Property" has the meaning given to such term in
Section 8.13 hereof.
"Intellectual Property Assignments" means those certain
Assignments of Patents, Trademarks, Copyrights and Licenses in the form
attached to the Intellectual Property Security Agreement as Exhibit A,
to be filed upon acceleration of the Obligations hereunder, as from
time to time amended, supplemented or replaced.
"Intellectual Property Security Agreement" means, collectively
(or individually as the context may indicate), (i) the Intellectual
Property Security Agreement dated as of the Closing Date and executed
by the Borrower and certain of its Domestic Subsidiaries in favor of
the Agent and (ii) each other Intellectual Property Security Agreement
executed by the Borrower or a Domestic Subsidiary (whether of even date
herewith or delivered after the Closing Date pursuant to Article VI or
Section 9.21 hereof and whether executed individually or jointly and
severally with other Subsidiaries) in favor of the Agent to
collaterally secure payment and performance of its respective
obligations hereunder and under the Guaranty, as applicable,
substantially in the form of Exhibit I attached hereto and incorporated
herein by reference, as from time to time amended, supplemented or
replaced.
"Interbank Offered Rate" means, for any Loan bearing interest
at the Eurodollar Rate for any Interest Period therefor, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100th of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "Interbank Offered
Rate" shall mean, for any Loan bearing interest at the Eurodollar Rate
for any Interest Period therefor, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100th of 1%) appearing on Reuters Screen
LIBO Page as the London interbank
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offered rate for deposits in Dollars at approximately 11:00 a.m.
(London Time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such
rates.
"Interest Period" means, for each Eurodollar Rate Loan, a
period commencing on the date such Eurodollar Rate Loan is made or
converted and ending, at the Borrower's option, on the date one, two,
three or six months thereafter as notified to the Agent by the
Authorized Representative three (3) Business Days prior to the
beginning of such Interest Period; provided, that,
(ii) if the Authorized Representative fails to
notify the Agent of the length of an Interest Period three (3)
Business Days prior to the first day of such Interest Period,
the Loan for which such Interest Period was to be determined
shall be deemed to be a Base Rate Loan as of the first day
thereof;
(iii) if an Interest Period for a Eurodollar Rate
Loan would end on a day which is not a Business Day, such
Interest Period shall be extended to the next Business Day
(unless such extension would cause the applicable Interest
Period to end in the succeeding calendar month, in which case
such Interest Period shall end on the next preceding Business
Day);
(iv) any Interest Period which 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 a calendar month;
(v) no Interest Period shall extend past the
Stated Termination Date in the case of Revolving Loans, the
Term Loan A Maturity Date in the case of Term Loan A, the Term
Loan B Maturity Date in the case of Term Loan B and the Term
Loan C Maturity Date in the case of Term Loan C; and
(vi) there shall not be more than twelve (12)
Interest Periods in effect on any day.
"Interest Rate Selection Notice" means the written notice
delivered by an Authorized Representative in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Loan
or the conversion of any Eurodollar Rate Loan into a Base Rate Loan or
the conversion of any Base Rate Loan into a Eurodollar Rate Loan in the
form of Exhibit E hereto.
"Issuing Bank" means initially NationsBank and thereafter any
Lender which is successor to NationsBank as issuer of Letters of Credit
under Article III hereof.
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"Kmart Agreement" means that certain Purchase, Distribution
and Marketing Agreement dated as of January 27, 1997 between Kmart
Corporation and Salton/Maxim.
"Landlord Waivers" means, collectively, each of the landlord
waiver and estoppel letters delivered by the landlord of each material
facility now leased by the Borrower and any Guarantor, all of which are
listed on Schedule 1.1 hereto, or arising after the Closing Date and
delivered by the Borrower and the Guarantors, as applicable, pursuant
to Article VI or Section 9.21 hereof, substantially in the form of
Exhibit M hereto and incorporated herein by reference.
"LC Account Agreement" means the LC Account Agreement dated as
of the date hereof, between the Borrower and the Agent, as amended,
modified or supplemented from time to time.
"Lending Office" means, as to each Lender, the Lending Office
of such Lender designated on the signature pages hereof or in an
Assignment and Acceptance or such other office of such Lender (or of an
affiliate of such Lender) as such Lender may from time to time specify
to the Authorized Representative and the Agent as the office by which
its Loans are to be made and maintained.
"Letter of Credit" means (i) a standby or documentary letter
of credit issued by the Issuing Bank for the account of the Borrower in
favor of a Person advancing credit or securing an obligation on behalf
of the Borrower and (ii) the Existing Letters of Credit.
"Letter of Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to acquire Participations in
respect of Letters of Credit and Reimbursement Obligations up to an
aggregate amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Letter of Credit
Commitment as the same may be increased or decreased from time to time
pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in
Article IV hereof providing for the issuance by the Issuing Bank for
the account of the Borrower of Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding the Total Letter of Credit
Commitment.
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount remaining undrawn under all Letters
of Credit plus the principal amount of all Reimbursement Obligations
then outstanding.
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the
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common law, statute or contract, and including but not limited to the
lien or security interest arising from a mortgage, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. For the purposes of this
Agreement, the Borrower and any Subsidiary shall be deemed to be the
owner of any property which it has acquired or holds subject to a
conditional sale agreement, financing lease, or other arrangement
pursuant to which title to the property has been retained by or vested
in some other Person for security purposes.
"Loan" or "Loans" means any of the Revolving Loans, the Swing
Line Loans or the Term Loans.
"Loan Documents" means this Agreement, the Notes, the Security
Instruments, the Facility Guaranties, the LC Account Agreement, the
Applications and Agreements for Letter of Credit, the Landlord Waivers
and all other instruments and documents heretofore or hereafter
executed or delivered to or in favor of any Lender, the Issuing Bank or
the Agent in connection with the Loans made and transactions
contemplated under this Agreement, as the same may be amended,
supplemented or replaced from the time to time.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, operations or condition, financial or
otherwise, of the Borrower or any of its Subsidiaries or any other
Credit Party, (ii) the ability of any Credit Party to pay or perform
its respective obligations, liabilities and indebtedness under the Loan
Documents as such payment or performance becomes due in accordance with
the terms thereof, or (iii) the rights, powers and remedies of the
Agent or any Lender under any Loan Document or the validity, legality
or enforceability thereof (including for purposes of clauses (ii) and
(iii) the imposition of burdensome conditions thereon).
"Material Contract" means any contract or agreement (including
license agreements) the termination of which or the default by any
party thereto could reasonably be expected to have a Material Adverse
Effect; such Material Agreements as of the Closing Date being listed on
Schedule 1.2 hereto.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgages" means, collectively (or individually as the
context may indicate), each mortgage or similar agreement executed by
the Borrower or any Subsidiary and delivered after the Closing Date
pursuant to Article VI or Section 9.21 hereof in favor of the Agent in
the form of Exhibit O attached hereto and incorporated herein by
reference, each as from time to time amended, supplemented or replaced.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is
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accruing an obligation to make, contributions or has made, or been
obligated to make, contributions within the preceding six (6) fiscal
years.
"Municipal Obligations" means general obligations issued by,
and supported by the full taxing authority of, any state of the United
States of America or of any municipal corporation or other public body
organized under the laws of any such state which are rated in the
highest investment rating category by both S&P and Moody's.
"NMS" means NationsBanc Xxxxxxxxxx Securities LLC and its
successors.
"NationsBank" means NationsBank, National Association.
"NationsBridge" means NationsBridge, L.L.C. and its
successors.
"Net Proceeds" (a) from any Equity Offering means cash
payments received by the Borrower therefrom as and when received, net
of all legal, accounting, banking and underwriting fees and expenses,
commissions, discounts and other issuance expenses incurred in
connection therewith and all taxes required to be paid or accrued as a
consequence of such issuance; and (b) from any Asset Disposition or
option exercised under the Option Agreement means cash payments
received by the Borrower therefrom (including any cash payments
received pursuant to any note or other debt security received in
connection with any Asset Disposition) as and when received, net of (i)
all legal fees and expenses and other fees and expenses paid to third
parties and incurred in connection therewith, (ii) all taxes required
to be paid or accrued as a consequence of such sale and (iii) with
respect to an Asset Disposition only, amounts applied to repayment of
Indebtedness (other than the Obligations) secured by a Lien on the
asset or property disposed.
"Notes" means, collectively, the Revolving Notes, the Term
Notes and the Swing Line Note.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) the Reimbursement
Obligations and otherwise in respect of the Letters of Credit, (iii)
all liabilities of Borrower to any Lender or an affiliate of a Lender
which arise under a Swap Agreement, and (iii) the payment and
performance of all other obligations, liabilities and Indebtedness of
the Borrower to the Lenders, the Agent or NMS hereunder, under any one
or more of the other Loan Documents or with respect to the Loans.
"Operating Documents" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership or other legally authorized incorporated or
unincorporated entity, the bylaws, operating agreement, partnership
agreement or limited partnership agreement of such entity.
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"Option Agreement" means that certain Stock Agreement dated as
of May 6, 1998 between the Borrower and Salton/Maxim.
"Organizational Documents" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership or other legally authorized
incorporated or unincorporated entity, the articles of incorporation,
certificate of incorporation, articles of organization or certificate
of limited partnership of such entity.
"Outstandings" means, collectively, at any date, the Letter of
Credit Outstandings, the Revolving Credit Outstandings, the Swing Line
Outstandings and the Term Loan Outstandings on such date.
"Participation" means, with respect to any Lender (other than
the Issuing Bank) and a Letter of Credit, the extension of credit
represented by the participation of such Lender hereunder in the
liability of the Issuing Bank in respect of a Letter of Credit issued
by the Issuing Bank in accordance with the terms hereof. "PBGC" means
the Pension Benefit Guaranty Corporation and any successor thereto.
"Pension Plan" means any employee pension benefit plan within
the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412
of the Code and which (i) is maintained for employees of the Borrower
or any of its ERISA Affiliates or is assumed by the Borrower or any of
its ERISA Affiliates or (ii) has at any time with the last six years
been maintained for the employees of the Borrower or any current or
former ERISA Affiliate.
"Permanent Subordinated Notes" means the permanent senior
subordinated notes in an aggregate principal amount of up to
$125,000,000 to be issued by the Borrower to replace the Subordinated
Bridge Debt.
"Permanent Junior Financing" means the permanent financing
entered into in replacement of the Subordinated Bridge Debt through the
issuance of the Permanent Subordinated Notes and the Company
Securities.
"Permanent Junior Financing Documents" means the Registration
Statement, the Indenture and all related documents entered into
connection with the transactions contemplated thereby.
"Permitted Acquisition" means (a) the HPG Acquisition and (b)
each other Acquisition effected with the consent and approval of the
board of directors or other applicable governing body of the Person
being acquired, and with the duly obtained
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approval of such shareholders or other holders of equity interest as
such Person may be required to obtain, so long as (i) immediately prior
to and immediately after the consummation of such Acquisition, no
Default or Event of Default has occurred and is continuing, (ii) with
respect to an Acquisition where the Cost of Acquisition exceeds
$5,000,000, substantially all of the sales and operating profits
generated by such Person (or assets) so acquired or invested are
derived from a line or lines of business that are part of the Core
Business, (iii) pro forma historical financial statements as of the end
of the most recent fiscal quarter for the trailing twelve month period
giving effect to such Acquisition are delivered to the Agent not less
than five (5) Business Days prior to the consummation of such
Acquisition, together with a certificate of an Authorized
Representative demonstrating compliance with Section 10.23 hereof after
giving effect to such Acquisition, (iv) the aggregate Cost of
Acquisition (excluding the value of any capital stock of the Borrower
given as part of the Cost of Acquisition) with respect to any
Acquisitions consummated during any Fiscal Year shall not exceed
$20,000,000; and (v) the aggregate Cost of Acquisition which consists
in whole or in part of the value of any capital stock of the Borrower
(including without limitation when combined with cash, debt or the
assumption of indebtedness for any specific Acquisition) with respect
to any Acquisition consummated after the Closing Date shall not exceed
$10,000,000.
"Permitted Indebtedness" has the meaning given to such term in
Section 10.1 hereof.
"Permitted Liens" has the meaning given to such term in
Section 10.2 hereof.
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a government
or agency or political subdivision thereof.
"Pledged Stock" means (i) all of the capital stock or
partnership interests and related rights and interests owned by the
Borrower, directly or indirectly, of (A) each Domestic Subsidiary and
Domestic Control Subsidiary and (B) Newtech Electronics Industries,
Inc., PX Distributors, Inc., Break Room of Tennessee, Inc., Anasazi
Partners L.P. and after July 31, 1999, the Salton/ Maxim Shares, if
any, (ii) 65% of the outstanding voting stock and related interests and
rights of each Direct Foreign Subsidiary or Direct Foreign Control
Subsidiary (to the extent such amount is directly or indirectly owned
by the Borrower) and (iii) 100% of the capital stock and related
interests and rights directly or indirectly owned by the Borrower of
any Foreign Subsidiary or Foreign Control Subsidiary to the extent such
action would not result in any material adverse tax impact on the
Borrower, in each case now or hereafter pledged by the Borrower and
certain Subsidiaries pursuant to the Stock Pledge Agreement.
"Pre-Refunded Municipal Obligations" means obligations of any
state of the United States of America or of any municipal corporation
or other public body organized under the laws of any such state which
are rated, based on the escrow, in the highest
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investment rating category by both S&P and Moody's and which have been
irrevocably called for redemption and advance refunded through the
deposit in escrow of Government Securities or other debt securities
which are (i) not callable at the option of the issuer thereof prior to
maturity, (ii) irrevocably pledged solely to the payment of all
principal and interest on such obligations as the same becomes due, and
(iii) in a principal amount and bear such rate or rates of interest as
shall be sufficient to pay in full all principal of, interest, and
premium, if any, on such obligations as the same becomes due as
verified by a nationally recognized firm of certified public
accountants.
"Prime Rate" means the rate of interest per annum established
from time to time by the Agent as its prime rate. The Prime Rate is not
necessarily the best or the lowest rate of interest offered by the
Agent.
"Principal Office" means the office of the Agent at
NationsBank, National Association, Xxxxxxxxxxxx Xxxxxx, 00xx Xxxxx, XX0
000-00-00, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Agency Services,
or such other office and address as the Agent may from time to time
designate.
"Registration Statement" means the Borrower's Registration
Statement on Form S-3, registration no. 333-56069, relating to the
issuance of the Company Securities.
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time.
"Reimbursement Obligation" shall mean at any time, the
obligation of the Borrower with respect to any Letter of Credit to
reimburse the Issuing Bank and the Lenders to the extent of their
respective Participations (including by the receipt by the Issuing Bank
of proceeds of Loans pursuant to Section 3.2 hereof) for amounts
theretofore paid by the Issuing Bank pursuant to a drawing under such
Letter of Credit.
"Related Business Party" means any supplier, vendor or
customer, or any group of individual suppliers, vendors or customers,
whose inability to perform under existing agreements or general
business failure could reasonably be expected to have a Material
Adverse Effect.
"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations or
commercial paper are rated "A" by either of S&P or Xxxxx'x or "A-1" by
S&P or "P-1" by Xxxxx'x.
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating in excess of 50%
of the aggregate Credit Exposures of all Lenders on such date. For
purposes of the preceding sentence, the amount of the "Credit Exposure"
of each Lender shall be equal to the aggregate principal
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amount of the Revolving Loans owing to such Lender plus the aggregate
unutilized amounts of such Lender's Revolving Credit Commitment
(without regard to any Swing Line Outstandings) plus the amount of such
Lender's Applicable Commitment Percentage of Letter of Credit
Outstandings plus the amount of such Lender's Applicable Commitment
Percentage of the Term Loan Outstandings; provided that, (i) if any
Lender with a Revolving Credit Commitment shall have failed to pay to
the Issuing Bank its Applicable Commitment Percentage of any drawing
under any Letter of Credit resulting in an outstanding Reimbursement
Obligation, such Lender's Credit Exposure attributable to Letters of
Credit and Reimbursement Obligations shall be deemed to be held by the
Issuing Bank for purposes of this definition and (ii) if any Lender
with a Revolving Credit Commitment shall have failed to pay to
NationsBank its Applicable Commitment Percentage of any Swing Line
Loan, such Lender's Credit Exposure equal to its Applicable Commitment
Percentage of all Swing Line Outstandings shall be deemed to be held by
NationsBank for purposes of this definition.
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) by member banks of the
Federal Reserve System against "Eurocurrency liabilities" (as such term
is used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the
Eurodollar Rate is to be determined, or (ii) any category of extensions
of credit or other assets which include Eurodollar Rate Loans. The
Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Loans to the Borrower up
to an aggregate principal amount at any one time outstanding equal to
such Lender's Applicable Commitment Percentage of the Total Revolving
Credit Commitment.
"Revolving Credit Facility" means the facility described in
Article III hereof providing for Loans to the Borrower by the Lenders
in the aggregate principal amount of the Total Revolving Credit
Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
then outstanding.
"Revolving Credit Termination Date" means (i) the Stated
Termination Date or (ii) such earlier date of termination of Lenders'
obligations pursuant to Section 11.1 hereof upon the occurrence of an
Event of Default, or (iii) such date as the Borrower may voluntarily
and permanently terminate the Revolving Credit Facility by payment in
full of
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all Revolving Credit Outstandings, Swing Line Outstandings and Letter
of Credit Outstandings and cancellation of all Letters of Credit,
together with all accrued and unpaid interest thereon.
"Revolving Loan" means any borrowing pursuant to an Advance
under the Revolving Credit Facility in accordance with Article III.
"Revolving Notes" means the promissory notes of the Borrower
evidencing Revolving Loans executed and delivered to the Lenders
substantially in the form of Exhibit F-4 hereto.
"Salton/Maxim" means Salton/Maxim Housewares, Inc., a Delaware
corporation.
"Salton/Maxim Shares" means the shares of capital stock of
Salton/Maxim owned by the Borrower.
"Security Agreement" means, collectively (or individually as
the context may indicate), (i) the Security Agreement dated as of the
date hereof, by the Borrower and the Guarantors to the Agent and (ii)
any additional Security Agreement delivered to the Agent (whether of
even date herewith or delivered after the Closing Date pursuant to
Article VI or Section 9.21 hereof and whether executed individually or
jointly and severally with other Subsidiaries), each in the form of
Exhibit H hereto and each as hereafter amended, supplemented or
replaced from time to time.
"Security Instruments" means, collectively, the Security
Agreement, the Intellectual Property Security Agreement, the Stock
Pledge Agreement, the Mortgage (when and if required hereunder), the
Collateral Assignments of Contract Rights and all other agreements,
instruments and other documents, whether now existing or hereafter in
effect, pursuant to which the Borrower, or any Credit Party, shall
grant or convey to the Agent or the Lenders a Lien in property as
security for all or any portion of the Obligations, as any of them may
be amended, modified or supplemented from time to time.
"Segment" means a portion of a Term Loan (or all thereof) with
respect to which a particular interest rate is (or is proposed to be)
applicable.
"Seller" means The Black & Xxxxxx Corporation, a Maryland
corporation.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(ii) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including Contingent Obligations; and
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(iii) it is then able and expects to be able to
pay its debts as they mature; and
(iv) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc.
"Special Purpose Subsidiary" means a wholly-owned Subsidiary
of the Borrower organized for the sole purpose of accomplishing a Year
End Domestic Receivables Transaction and which engages in no other
business, the proper name of which shall be furnished to the Agent
promptly following its organization.
"Stated Termination Date" means June 26, 2003.
"Stock Offering" means the issuance and sale to the public of
the Company Securities resulting in net proceeds to the Borrower of at
least $100,000,000.
"Stock Pledge Agreement" means, collectively (or individually
as the context may indicate), (i) that certain Stock Pledge Agreement
dated as of the date hereof between the Borrower, certain Guarantors
and the Agent for the benefit of the Lenders and (ii) any additional
Stock Pledge Agreement delivered to the Agent (whether of even date
herewith or delivered after the Closing Date pursuant to Article VI or
Section 9.21 hereof and whether executed individually or jointly and
severally with other Subsidiaries), substantially in the form attached
hereto as Exhibit G hereto, as each such Stock Pledge Agreement may be
amended, supplemented or replaced from time to time.
"Subordinated Bridge Debt" means the subordinated bridge
indebtedness incurred pursuant to the terms of the Bridge Loan
Agreement in an aggregate original principal amount not in excess of
$185,000,000, together with all other Indebtedness into which such
Subordinated Bridge Debt is convertible or exchangeable.
"Subordinated Bridge Notes" means the subordinated notes.
"Subsidiary" means (a) any corporation in which more than 50%
of its outstanding voting stock is owned directly or indirectly by the
Borrower and/or by one or more of its Subsidiaries or (b) in the case
of a Person other than a corporation, any Person with respect to which
the Borrower or any Subsidiary, directly or indirectly, is entitled to
more than 50% of the profits of such Person.
"Swap Agreement" means one or more agreements between the
Borrower and any
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Person with respect to Indebtedness evidenced by any or all of the
Notes, on terms mutually acceptable to the Borrower and such Person,
which agreements create Rate hedging Obligations.
"Swing Line" means the revolving line of credit established by
NationsBank in favor of the Borrower pursuant to Section 3.13 hereof.
"Swing Line Loans" means loans made by NationsBank to the
Borrower pursuant to Section 3.13 hereof.
"Swing Line Note" means the promissory note of the Borrower
evidencing Swing Line Loans executed and delivered to the NationsBank
substantially in the form of Exhibit F-5 hereto.
"Swing Line Outstandings" means, as of any date of
determination, the aggregate principal amount of all Swing Line Loans
then outstanding.
"Term Loans" means each of the Term Loan A, Term Loan B and
Term Loan C, as the case may be.
"Term Loan A" means the loan made pursuant to the Term Loan A
Facility.
"Term Loan A Commitment" means, with respect to each Lender,
the obligation of a Term Loan A Lender to make available the Term Loan
A to the Borrower in a principal amount equal to such Term Loan A
Lender's Applicable Commitment Percentage of the Total Term Loan A
Commitment, as set forth in Exhibit A hereto.
"Term Loan A Facility" means the facility described in Section
2.1 hereof providing for a Term Loan to the Borrower by the Lenders in
the original principal amount of $90,000,000.
"Term Loan A Lender" means each Lender indicated on Exhibit A
hereto as having a Term Loan A Commitment.
"Term Loan A Maturity Date" means June 26, 2003.
"Term Loan A Termination Date" means (i) the Term Loan A
Maturity Date or (ii) such earlier date of termination of a Term Loan A
Lenders' obligations pursuant to Section 11.1 hereof upon the
occurrence of an Event of Default or (iii) such date as the Borrower
may voluntarily and permanently terminate the applicable Term Loan A
Facility by payment in full of all Obligations incurred in connection
with such Term Loan A.
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"Term Loan B" means the loan made pursuant to the Term Loan B
Facility.
"Term Loan B Commitment" means, with respect to each Lender,
the obligation of a Term Loan B Lender to make available the Term Loan
B to the Borrower in a principal amount equal to such Term Loan B
Lender's Applicable Commitment Percentage of the Total Term Loan B
Commitment, as set forth in Exhibit A hereto.
"Term Loan B Facility" means the facility described in Section
2.1 hereof providing for the Term Loan to the Borrower in the original
principal amount of $75,000,000.
"Term Loan B Lender" means each Lender indicated on Exhibit A
hereto as having a Term Loan B Commitment.
"Term Loan B Maturity Date" means June 26, 2004.
"Term Loan B Termination Date" means (i) the Term Loan B
Maturity Date or (ii) such earlier date of termination of a Term Loan B
Lender's obligations pursuant to Section 11.1 hereof upon the
occurrence of an Event of Default or (iii) such date as the Borrower
may voluntarily and permanently terminate the applicable Term Loan B
Facility by payment in full of all Obligations incurred in connection
with such Term Loan B.
"Term Loan C" means the loan made pursuant to the Term Loan C
Facility.
"Term Loan C Commitment" means, with respect to each Lender,
the obligation of a Term Loan C Lender to make available the Term Loan
C to the Borrower in a principal amount equal to such Term Loan C
Lender's Applicable Commitment Percentage of the Total Term Loan C
Commitment, as set forth in Exhibit A hereto.
"Term Loan C Facility" means the facility described in Section
2.1 hereof providing for the Term Loan to the Borrower in the original
principal amount of $20,000,000.
"Term Loan C Lender" means each Lender indicated on Exhibit A
hereto as having a Term Loan C Commitment.
"Term Loan C Maturity Date" means June 26, 2004.
"Term Loan C Termination Date" means (i) the Term Loan C
Maturity Date or (ii) such earlier date of termination of a Term Loan C
Lender's obligations pursuant to Section 11.1 hereof upon the
occurrence of an Event of Default or (iii) such date as the Borrower
may voluntarily and permanently terminate the applicable Term Loan C
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Facility by payment in full of all Obligations incurred in connection
with such Term Loan C.
"Term Loan Facilities" means the Term Loan A Facility, the
Term Loan B Facility and the Term Loan C Facility.
"Term Loan Outstandings" means, as of any date of
determination, the aggregate principal amount of the Term Loans then
outstanding and all interest accrued thereon.
"Term Loan Termination Date" means the date upon which each of
the Term Loan A Termination Date, the Term Loan B Termination Date and
the Term Loan C Termination Date shall have occurred.
"Term Notes" means, collectively, the Term A Notes, the Term B
Notes and the Term C Notes.
"Term A Notes" means, collectively, the promissory notes of
the Borrower evidencing Term Loan A executed and delivered to the Term
Loan A Lenders as provided in Section 2.8 hereof substantially in the
form of Exhibit F-1 hereto, with appropriate insertions as to amounts,
dates and names of Term Loan A Lenders.
"Term B Notes" means, collectively, the promissory notes of
the Borrower evidencing Term Loan B executed and delivered to the Term
Loan B Lenders as provided in Section 2.8 hereof substantially in the
form of Exhibit F-2 hereto, with appropriate insertions as to amounts,
dates and names of Term Loan B Lenders.
"Term C Notes" means, collectively, the promissory notes of
the Borrower evidencing Term Loan B executed and delivered to the Term
Loan C Lenders as provided in Section 2.8 hereof substantially in the
form of Exhibit F-3 hereto, with appropriate insertions as to amounts,
dates and names of Term Loan C Lenders.
"Termination Event" means: (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(ii) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4062(e) of ERISA; or (iii) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (iv) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (v) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA
for the termination of, or the appointment of a trustee to administer,
any Pension Plan; or (vi) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302
of ERISA; or (viii) any event or
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condition which results in the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or Section 4245 of ERISA,
respectively; or (ix) any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by the PBGC of proceedings to terminate a Multiemployer
Plan under Section 4042 of ERISA; or (x) any event or condition with
respect to any Employee Benefit Plan which is regulated by any Foreign
Benefit Law that results in such Employee Benefit Plan's termination or
the revocation of the Employee Benefit Plan's authority to operate
under the applicable Foreign Benefit Law.
"Total Letter of Credit Commitment" means an amount not to
exceed $20,000,000.
"Total Revolving Credit Commitment" means $160,000,000, such
amount as reduced from time to time in accordance with Section 3.7
hereof.
"Total Term Loan A Commitment" means a principal amount equal
to $90,000,000.
"Total Term Loan B Commitment" means a principal amount equal
to $75,000,000.
"Total Term Loan C Commitment" means a principal amount equal
to $20,000,000.
"Total Term Loan Commitment" means the sum of the Total Term
Loan A Commitment, the Total Term Loan B Commitment and the Total Term
Loan C Commitment.
"Transaction Agreement" means that certain Transaction
Agreement dated as of May 10, 1998, as amended from time to time with
notice to and the consent of the Agent, by and among the Borrower and
the Seller providing for the purchase of HPG by the Borrower.
"Transaction Documents" means the Transaction Agreement and
each other agreement, together with exhibits and attachments thereto,
identified in the definition of "Transaction Documents" contained in
Exhibit A to the Transaction Agreement.
"Type" shall mean any type of Loan bearing interest at a
particular rate (i.e., a Base Rate Loan, a Eurodollar Rate Loan or a
Swing Line Loan).
"Year End Domestic Receivables Transaction" means the transfer
by the Borrower and/or its Domestic Subsidiaries to Windmere Holdings
II, Inc., a Guarantor, ("Holdings") or a Special Purpose Subsidiary on
or about December 31 of any year of
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Domestic Receivables (as defined in the Security Agreement entered into
by the Borrower or such Domestic Subsidiary), subject at all times to
the existing and continuing Lien on such property in favor of the Agent
for the benefit of the Lenders; provided that all of the following
conditions are satisfied:
(ii) all Domestic Receivables transferred to
Holdings or the Special Purpose Subsidiary on or about any
December 31 and retransferred to the appropriate transferor
not later than the fifth Business Day following January 1;
(iii) immediately prior to giving effect to any
such transfer, no Default or Event of Default shall have
occurred and be continuing;
(iv) Holdings and the Special Purpose Subsidiary
shall incur no Indebtedness or other liabilities for the
payment of money, other than those in favor of the Agent and
the Lenders, corporate franchise taxes and similar unsecured
obligations necessarily incurred to maintain its existence,
and the obligation to retransfer Domestic Receivables as of
the fifth Business Day following each January 1 to the
appropriate transferor;
(v) immediately before giving effect to any such
transfer on or about any December 31, Holdings or the Special
Purpose Subsidiary shall not have become liable to any Person,
and no Person shall have asserted any claim against Holdings
or the Special Purpose Subsidiary (including without
limitation the submission of any invoice) for the payment of
any amount or the delivery of any property or interest therein
other than routine invoices for the payment of operating costs
in connection with liabilities expressly permitted under the
immediately preceding clause (iii);
(vi) the Agent for the benefit of the Lenders
shall have a duly perfected first priority security interest
in the Domestic Receivables in which Holdings or the Special
Purpose Subsidiary may acquire any interest at any time,
subject to no adverse claims of creditors of, or purchasers
for value from, Holdings or the Special Purpose Subsidiary;
(vii) the Special Purpose Subsidiary shall have
been created in full compliance with the provisions of Section
9.21 hereof and there shall be then in effect an appropriate
guaranty and an appropriate security agreement executed and
delivered by and effective against the Special Purpose
Subsidiary as contemplated in such Section; and
(viii) the purpose of the Special Purpose
Subsidiary shall be strictly limited, by charter or in such
other manner as shall be acceptable to the Agent, to (A) the
acquisition and retransfer or Domestic Receivables as
contemplated in the
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preceding clauses of this definition and (B) the incurring of
obligations and the grant of a Lien to the Agent and the
Lenders as required by Section 9.21 hereof, and the operations
and activities of the Special Purpose Subsidiary shall at all
times be strictly limited to those actions necessary to
accomplish such purposes.
"Year 2000 Compliant" means all computer applications
(including those affected by information received from its suppliers
and vendors) that are material to the Borrower's or any of its
Subsidiaries' business and operations will on a timely basis be able to
perform properly data-sensitive functions involving all dates on and
after January 1, 2000.
"Year 2000 Problem" means the risk that computer applications
used by the Borrower and any of its Subsidiaries (including those
affected by information received from its suppliers and vendors) that
are material to the Borrower's or any of its Subsidiaries' business or
operations may be unable to recognize and perform properly
data-sensitive functions involving certain dates on and after January
1, 2000.
I.2. Rules of Interpretation
(a) All accounting terms not specifically defined herein
shall have the meanings assigned to such terms and shall be interpreted
in accordance with GAAP applied on a Consistent Basis; provided,
however, that to the extent any term defined in this Article I refers
to "Subsidiaries" and contains a calculation to be made in accordance
with GAAP, the term "Subsidiaries" shall be deemed to include Control
Subsidiaries.
(b) Each term defined in Article 1 or 9 of the Florida
Uniform Commercial Code shall have the meaning given therein unless
otherwise defined herein, except to the extent that the Uniform
Commercial Code of another jurisdiction is controlling, in which case
such terms shall have the meaning given in the Uniform Commercial Code
of the applicable jurisdiction.
(c) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of
reference and shall not constitute a part of any such document or
affect the meaning, construction or effect of any provision thereof.
(d) Except as otherwise expressly provided, references
herein to articles, sections, paragraphs, clauses, annexes, appendices,
exhibits and schedules are references to articles, sections,
paragraphs, clauses, annexes, appendices, exhibits and schedules in or
to this Agreement.
(e) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of such
defined term, and all references to the
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masculine gender shall include reference to the feminine or neuter
gender, and vice versa, as the context may require.
(f) When used herein or in any other Loan Document, words
such as "hereunder", "hereto", "hereof" and "herein" and other words of
like import shall, unless the context clearly indicates to the
contrary, refer to the whole of the applicable document and not to any
particular article, section, subsection, paragraph or clause thereof.
(g) References to "including" means including without
limiting the generality of any description preceding such term, and for
purposes hereof the rule of ejusdem generis shall not be applicable to
limit a general statement, followed by or referable to an enumeration
of specific matters, to matters similar to those specifically
mentioned.
(h) All dates and times of day specified herein shall
refer to such dates and times at Charlotte, North Carolina.
(i) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the opportunity
to request) revisions to, the Loan Documents, and any rule of
construction that ambiguities are to be resolved against the drafting
party shall be inapplicable in the construing and interpretation of the
Loan Documents and all exhibits, schedules and appendices thereto.
(j) Any reference to a Lender in Article II when used
herein with respect to Term Loan A, Term Loan B or Term Loan C shall
mean those Lenders with a Term Loan A Commitment, a Term Loan B
Commitment or a Term Loan C Commitment, respectively, and when used in
Article III and IV with respect to a Revolving Loan shall mean those
Lenders having a Revolving Credit Commitment.
(k) Any reference to an officer of the Borrower or any
other Person by reference to the title of such officer shall be deemed
to refer to each other officer of such Person, however titled,
exercising the same or substantially similar functions.
(l) All references to any agreement or document as
amended, modified or supplemented, or words of similar effect, shall
mean such document or agreement, as the case may be, as amended,
modified or supplemented from time to time only as and to the extent
permitted therein and in the Loan Documents.
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ARTICLE II
The Term Loans
II.1. Term Loans. Subject to the terms and conditions of this
Agreement, each Lender with a Term Loan A Commitment, a Term Loan B Commitment
and/or a Term Loan C Commitment, as the case may be, severally agrees to make
(i) an Advance of the Term Loan A on the Closing Date in an amount equal to its
Applicable Commitment Percentage of the Total Term Loan A Commitment, (ii) an
Advance of the Term Loan B on the Closing Date in an amount equal to its
Applicable Commitment Percentage of the Total Term Loan B Commitment and (iii)
an Advance of the Term Loan C on the Closing Date in an amount equal to its
Applicable Commitment Percentage of the Total Term Loan C Commitment, in each
case, by wire transfer to the Agent. Such wire transfer shall be directed to the
Agent at the Principal Office and shall be in the form of immediately available
Dollars . The amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Borrower by delivery of
the proceeds thereof to the Borrower's Account or otherwise as shall be directed
by the Authorized Representative and reasonably acceptable to the Agent. Each
Term Loan shall be available in a single draw in Dollars at Closing. The
principal amount of each Segment of the Term Loans outstanding hereunder from
time to time shall bear interest, at the Borrower's election, at an interest
rate per annum equal to the Base Rate or the applicable Eurodollar Rate;
provided, however, that (x) no Eurodollar Rate Segment shall have an Interest
Period that extends beyond the Term Loan A Maturity Date or the Term Loan B
Maturity Date, as the case may be, (y) each Eurodollar Rate Segment of each Term
Loan shall be in the minimum amount of $5,000,000 and if greater, in an integral
multiple of $1,000,000, and (z) each Eurodollar Rate Segment may be repaid only
on the last day of the Interest Period with respect thereto unless such payment
is accompanied by the additional payment, if any, required by Section 6.5
hereof. No amount of any Term Loan repaid or prepaid by the Borrower may be
reborrowed hereunder, and no subsequent Advances of Term Loans shall be made by
any Lender after the initial Advance.
II.2. Payment of Principal. (a) The principal amount of Term Loan A
shall be repaid by the Borrower on the dates and in the amounts (subject to the
provisions of Section 2.5 and 2.6) hereof set forth below:
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Date Amount
---- ------
March 31, 1999 $2,500,000
June 30, 1999 $2,500,000
September 30, 1999 $2,500,000
December 31, 1999 $2,500,000
March 31, 2000 $2,500,000
June 30, 2000 $2,500,000
September 30, 2000 $5,000,000
December 31, 2000 $5,000,000
March 31, 2001 $5,000,000
June 30, 2001 $5,000,000
September 30, 2001 $6,250,000
December 31, 2001 $6,250,000
March 31, 2002 $6,250,000
June 30, 2002 $6,250,000
September 30, 2002 $7,500,000
December 31, 2002 $7,500,000
March 31, 2003 $7,500,000
June 26, 2003 All remaining
principal outstanding
on Term Loan A
(b) The principal amount of Term Loan B shall be repaid by the
Borrower in five consecutive annual installments of $750,000 on June 26 of each
year commencing with June 26, 1999 (subject to Sections 2.5 and 2.6 hereof) with
a final sixth payment due on June 26, 2004 in the amount of all remaining
principal outstanding on Term Loan B.
(c) The principal amount of Term Loan C shall be repaid by the
Borrower in five consecutive annual installments of $200,000 on June 26 of each
year commencing with June 26, 1999 (subject to Sections 2.5 and 2.6 hereof) with
a final sixth payment due on June 26, 2004 in the amount of all remaining
principal outstanding on Term Loan C.
(d) Notwithstanding the foregoing, the entire amount of Term Loan
Outstandings shall be due and payable by the Borrower in full on the Term Loan A
Termination Date or Term Loan B Termination Date or Term Loan C Termination
Date, as applicable.
II.3. Payment of Interest. The Borrower shall pay interest on the
outstanding and unpaid principal amount of each Segment of each Term Loan
commencing on the date of determination of the interest rate applicable to such
Segment until such Segment shall be paid at the applicable Base Rate or
Eurodollar Rate, as the case may be, as designated by the Borrower in the
applicable Interest Rate Selection Notice or as otherwise provided hereunder.
Interest relating to each Segment shall be computed on the basis of a year of
360 days and calculated for actual days elapsed. Interest on each Segment shall
be paid on the earlier of (a) in the case of any Base Rate Segment, quarterly in
arrears on the last Business Day of each March, June, September and December,
commencing on September 30, 1998, until the applicable Term Loan A Maturity Date
or Term Loan B Maturity Date, as applicable, or, if earlier, the applicable Term
Loan A Termination Date or Term Loan B Termination Date or Term Loan C
Termination Date, as applicable, on which date the entire principal amount of
and all accrued interest on the Term Loans shall be paid in full, (b) in the
case of any Eurodollar Rate Segment, on the last day of the applicable Interest
Period for such Segment and if such Interest Period extends for more than three
(3) months, at intervals of three (3) months after the first day of such
Interest Period, and (c) upon payment in full of such Term Loan; provided,
however, that if any Event of Default shall have occurred and be continuing, all
amounts outstanding hereunder shall bear interest at
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the Default Rate until such Event of Default is waived.
II.4. Manner of Payment.
(a) Each payment of principal (including any prepayment)
and payment of interest and fees, and any other amount required to be
paid to the Lenders with respect to the Term Loans, shall be made to
the Agent at the Principal Office for the account of each Lender in
Dollars in immediately available funds on or before 3:00 P.M. on the
date such payment is due. Without prejudice to any of the other
obligations set forth herein by the Borrower, the Agent shall, upon the
request of the Borrower, debit the amount of such payment from any one
or more ordinary deposit accounts of the Borrower with the Agent. The
Borrower shall attempt to give the Agent telefacsimile notice of any
intended payment of principal or interest prior to 12:00 Noon on the
date of such payment.
(b) The Agent shall deem any payment made by or on behalf
of the Borrower that is not made both in Dollars in immediately
available funds and prior to 3:00 P.M. on the date such payment is to
be made to be a non-conforming payment. Any such non-conforming payment
shall not be deemed to be received by the Agent until the later of (i)
the time such funds become available funds and (ii) the next Business
Day. Any non-conforming payment may, at the option of the Agent,
constitute or become a Default or Event of Default. Interest shall
continue to accrue on any principal as to which a non-conforming
payment is made until the later of (i) the date such funds become
available funds or (ii) the next Business Day at the Default Rate, from
the date such amount was due and payable.
(c) In the event that any payment hereunder or under the
Term Notes becomes due and payable on a day other than a Business Day,
then such due date shall be extended to the next succeeding Business
Day unless provided otherwise under the definition of "Interest
Period"; provided, however, that interest shall continue to accrue
during the period of any such extension; and provided further, however,
that in no event shall any such due date be extended beyond the Term
Loan A Termination Date or Term Loan B Termination Date or Term Loan C
Termination Date, as the case may be.
II.5. Optional Prepayments. The Borrower may prepay the Term Loans,
in whole or in part from time to time on any Business Day, without penalty or
premium, upon not less than five (5) Business Days' prior written notice
(effective upon receipt) to the Agent, which notice shall be irrevocable. Any
partial prepayment of the Term Loans shall be applied pro rata among Term Loan A
Outstanding, Term Loan B Outstandings and Term Loan C Outstandings to principal
installments equally across all maturities thereof for the pro rata benefit of
the Lenders. Any prepayment, whether a Base Rate Segment or a Eurodollar Rate
Segment, shall be made at a prepayment price equal to (i) the amount of
principal to be prepaid, plus (ii) all accrued and unpaid interest on the amount
so prepaid, to the date of prepayment. All prepayments under this Section 2.5
hereof shall be made in the minimum principal amount of $1,000,000 or any
integral
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multiple of $1,000,000 in excess thereof (or in the entire remaining principal
balance of the Term Loans). No such prepayment shall result in the payment of
any Eurodollar Rate Segment other than on the last day of the Interest Period of
such Segment unless such prepayment is accompanied by amounts due, if any, under
Section 6.5 hereof. No payment under this Section 2.5 hereof shall reduce or
excuse any payment required under Section 2.6 hereof.
II.6. Mandatory Prepayments. In addition to the required payments of
principal of the Term Loans set forth in Section 2.2 hereof and any optional
payments of principal of the Loans effected under Section 2.5 hereof, the
Borrower shall make the following required prepayments of the Term Loan
Facilities and, to the extent indicated below, the Revolving Credit Facility,
each such payment to be made to the Agent for the benefit of the Lenders within
the time period specified below:
(a) Equity Offerings. The Borrower shall make, or shall
cause each applicable Subsidiary to make, a prepayment of the Term Loan
Facilities from the Net Proceeds of any Equity Offering in an amount
equal to (i) prior to payment in full of all Term Loan Outstandings,
seventy-five percent (75%) of such Net Proceeds and (ii) after payment
in full of all Term Loan Outstandings, fifty percent (50%) of such Net
Proceeds. Each such prepayment shall be made within fifteen (15)
Business Days of receipt of such Net Proceeds and upon not less than
three (3) Business' Days written notice to the Agent, and shall include
within one (1) Business Day of repayment a certificate of an Authorized
Representative setting forth in reasonable detail the calculations
utilized in computing the amount of the Net Proceeds.
(b) Debt Offerings. The Borrower shall make, or shall
cause each applicable Subsidiary to make, a prepayment of the Term Loan
Facilities from the Net Proceeds of any Debt Offering in an amount
equal to one hundred percent (100%) of such Net Proceeds. Each such
prepayment shall be made within fifteen (15) Business Days of receipt
of such Net Proceeds and upon not less than three (3) Business' Days
written notice to the Agent, and shall include within one (1) Business
Day of repayment a certificate of an Authorized Representative setting
forth in reasonable detail the calculations utilized in computing the
amount of the Net Proceeds.
(c) Asset Dispositions. The Borrower shall make, or shall
cause each applicable Subsidiary to make, a prepayment of the Term Loan
Facilities from the Net Proceeds of any Asset Disposition in an amount
equal to (A) one hundred percent (100%) of such Net Proceeds to the
extent any portion of the Subordinated Bridge Debt remains outstanding
and (B) ninety percent (90%) of such Net Proceeds to the extent the
Subordinated Bridge Debt has been fully retired, repaid or replaced by
the Permanent Junior Financing; provided, however that with respect to
any disposition of the Salton/Maxim Shares, one hundred percent (100%)
of such Net Proceeds shall be applied (i) 50% pro rata to all Term Loan
A Outstandings, Term Loan B Outstandings and Term Loan C Outstandings
and (i) 50% to repay any Revolving Credit Outstandings or, if none,
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to repay any foreign or domestic Indebtedness of the Borrower other
than the Bridge Notes or the Permanent Subordinated Notes. Each such
prepayment shall be made within fifteen (15) Business Days of receipt
of such Net Proceeds and upon not less than three (3) Business' Days
written notice to the Agent, which notice shall include a certificate
of an Authorized Representative setting forth in reasonable detail the
calculations utilized in computing the amount of the Net Proceeds.
(d) Excess Cash Flow. Commencing with the Fiscal Year
ending December 31, 1999, the Borrower shall make an annual prepayment
of the Term Loan Facilities equal to fifty percent (50%) of
Consolidated Excess Cash Flow for such Fiscal Year and each Fiscal Year
thereafter. Each such prepayment shall be made within five (5) Business
Days of delivery to the Agent of the certificate described in Section
9.1(a)(i) hereof.
(e) Insurance or Condemnation Proceeds. The Borrower
shall make, or shall cause each applicable Subsidiary to make, a
prepayment of the Term Loan Facilities in an amount equal to one
hundred percent (100%) of the proceeds of any Condemnation Award or
Insurance Award; provided, however, that to the extent no Default or
Event of Default has occurred and is continuing, no such prepayment
shall be required with respect to proceeds which are reinvested by the
Borrower in repair of any damaged property or in replacement property
of approximately equivalent or greater value and utility as the
property subject to such taking or loss withing 60 days following
receipt of such proceeds. Each such prepayment shall be made (A) within
fifteen (15) Business Days of receipt of such proceeds and upon not
less than three (3) Business' Days written notice to the Agent unless
the Borrower shall have delivered to the Agent a certificate setting
forth the amount of such proceeds, confirming the intent of the
Borrower to reinvest such proceeds as provided above and containing a
detailed description of the plan of reinvestment with respect to such
proceeds or (B) upon expiration of 60 days following receipt of such
proceeds if a certificate referred to in clause (A) above has been
received by the Agent but such reinvestment has not been consummated
within the 60 day reinvestment period referred to above.
(f) Proceeds of Permanent Junior Financing. The Borrower
shall make a prepayment of Term Loan C, up to the amount of Term Loan C
Outstandings, in an amount equal to 100% of the proceeds of the
Permanent Junior Financing remaining after repayment of the Bridge
Notes.
All mandatory prepayments made pursuant to this Section 2.6 (other than
2.6(f) hereof) hereof shall be applied first to repay the Term Loans on a pro
rata basis (that is, based on the ratio each outstanding Term Loan bears to Term
Loan Outstandings) until the Term Loan Outstandings have been paid in full and
then to reduce Revolving Credit Outstandings, if any. Each mandatory prepayment
in an amount less than the Term Loan Outstandings shall be applied pro rata to
each remaining installment of Term Loan A, Term Loan B and Term Loan C (or if no
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Term Loan A Outstandings then exist, pro rata to each remaining installment of
Term Loan B and Term Loan C, or if no Term Loan A Outstandings or Term Loan B
Outstandings then exist, pro rata to each remaining installment of Term Loan C
only); provided, however, that any holder of Term Loan B or Term Loan C shall
have the right by the giving of at least one day's prior written notice to the
Agent to refuse prepayment of all or a portion of the Term Loan B or Term Loan C
held by it if, after giving effect to such partial prepayment, a portion of Term
Loan A will remain outstanding, and any prepayment so refused shall be applied
to prepay any remaining portion of Term Loan A. If the amount of Term Loan B or
Term Loan C as to which prepayment is refused is in excess of the remaining Term
Loan A Outstandings, then the Agent shall pro rate the amount of Term Loan B or
Term Loan C which can be paid among holders of Term Loan A based upon the
proportion that the principal amount of Term Loan A held by each Lender bears to
the Total Term Loan Outstandings. The holders of Term Loan B and Term Loan C
shall have no right to refuse prepayment of all or any portion of Term Loan B or
Term Loan C, as applicable, to the extent that any amount so refused exceeds the
amount of Term Loan A Outstandings. Any prepayment of an Eurodollar Rate Loan
pursuant to this Section 2.6 hereof other than on the last day of an Interest
Period shall be accompanied by the additional payment, if any, required by
Section 6.5 hereof.
II.7. Term Notes. The portion of each of the Term Loan A, Term Loan
B and Term Loan C made by each Lender shall be evidenced by a Term A Note, Term
B Note and the Term C Note, respectively, payable to the order of such Lender in
the respective amounts of its Term Loan A Commitment, Term Loan B Commitment and
Term Loan C Commitment, which Term Notes shall be dated the Closing Date or a
later date pursuant to an Assignment and Acceptance and shall be duly completed,
executed and delivered by the Borrower.
II.8. Interest Periods. Each Term Loan shall be, at the option of
the Borrower specified in an Interest Rate Selection Notice, comprised of either
Eurodollar Rate Segments or Base Rate Segments. Eurodollar Rate Segments and
Base Rate Segments may be outstanding at the same time, provided, however, there
shall not be outstanding at any one time Eurodollar Rate Loans (including
Revolving Loans) having more than twelve (12) different Interest Periods. If the
Agent does not receive an Interest Rate Selection Notice giving notice of
election of the duration of an Interest Period or of Conversion of any Segment
to or Continuation of a Segment as a Eurodollar Rate Segment by the time
prescribed by Section 2.9 hereof, the Borrower shall be deemed to have elected
to Convert such Segment to (or Continue such Segment as) a Base Rate Segment
until the Borrower notifies the Agent in accordance with Section 2.9 hereof.
II.9. Conversions and Elections of Subsequent Interest Periods.
Subject to the limitations set forth below and in Article VI, the Borrower may:
(a) upon delivery (effective upon receipt) of a properly
completed Interest Rate Selection Notice to the Agent on or before
11:00 A.M. on any Business Day, Convert any Eurodollar Rate Segment to
a Base Rate Segment on the last day of the Interest Period for such
Eurodollar Rate Segment; and
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(b) provided that no Default or Event of Default shall
have occurred and be continuing, upon delivery (effective upon receipt)
of a properly completed Interest Rate Selection Notice to the Agent on
or before 11:00 A.M. three (3) Business Days' prior to the date of such
Conversion:
(i) elect a subsequent Interest Period for any
Eurodollar Rate Segment to begin on the last day of the then
current Interest Period for such Eurodollar Rate Segment; and
(ii) Convert any Base Rate Segment to a
Eurodollar Rate Segment on any Business Day.
Each Conversion pursuant to this Section 2.9 hereof shall be subject to
the limitations on Eurodollar Rate Loans set forth in the definition of
"Interest Period" herein and in Sections 2.1, 2.8 and Article VI hereof. The
Agent shall give written notice to each Lender of such notice of Conversion
prior to 1:00 P.M. on the day such notice of election or Conversion is received.
All such Continuations or Conversions of Term Loans shall be effected pro rata
based on the Applicable Commitment Percentages of the Lenders with respect to
such Term Loan.
II.10. Pro Rata Payments. Except as otherwise provided herein, (a)
each payment on account of the principal of and interest on each Term Loan shall
be made to the Agent for the account of the Lenders pro rata based on their
Applicable Commitment Percentages of such Term Loan, (b) all payments to be made
by the Borrower for the account of each of the Lenders on account of principal,
interest and fees, shall be made without diminution, set-off, recoupment or
counterclaim, and (c) the Agent will promptly distribute to the Lenders in
immediately available funds payments received in fully collected, immediately
available funds from the Borrower.
II.11. Use of Proceeds. The proceeds of the Term Loans made pursuant
to the Term Loan Facilities hereunder shall be used by the Borrower (a) to fund
a portion of the purchase price paid in connection with the HPG Acquisition, (b)
to refinance certain existing Indebtedness of the Borrower, (c) to pay certain
costs associated with the closing of the Asheboro Facility, which costs paid by
the Borrower shall not exceed $10,000,000, and (d) to pay certain fees and
expenses incurred in connection with the HPG Acquisition, which fees and
expenses shall not exceed $21,000,000.
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ARTICLE III
The Revolving Credit Facility
III.1. Revolving Loans.
(a) Commitment. Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make Advances to the
Borrower under the Revolving Credit Facility from time to time from the
Closing Date until the Revolving Credit Termination Date on a pro rata
basis as to the total borrowing requested by the Borrower on any day
determined by such Lender's Applicable Commitment Percentage of the
Total Revolving Credit Commitment up to but not exceeding the Revolving
Credit Commitment of such Lender, provided, however, that the Lenders
will not be required and shall have no obligation to make any such
Advance (i) so long as a Default or an Event of Default has occurred
and is continuing or (ii) if the Agent has accelerated the maturity of
any of the Revolving Notes as a result of an Event of Default; provided
further, however, that immediately after giving effect to each such
Advance, the principal amount of Revolving Credit Outstandings plus
Swing Line Outstandings plus Letter of Credit Outstandings shall not
exceed either (x) the Total Revolving Credit Commitment or (y) the
Borrowing Base. Within such limits, the Borrower may borrow, repay and
reborrow under the Revolving Credit Facility on a Business Day from the
Closing Date until, but (as to borrowings and reborrowings) not
including, the Revolving Credit Termination Date; provided, however,
that (y) no Revolving Loan that is a Eurodollar Rate Loan shall be made
which has an Interest Period that extends beyond the Stated Termination
Date and (z) each Revolving Loan that is a Eurodollar Rate Loan may be
repaid only on the last day of the Interest Period with respect thereto
unless such payment is accompanied by the additional payment, if any,
required by Section 6.5 hereof.
(b) Amounts. Except as otherwise permitted by the Lenders
from time to time, the aggregate unpaid principal amount of the
Revolving Credit Outstandings plus Swing Line Outstandings plus Letter
of Credit Outstandings shall not exceed at any time either (i) the
Total Revolving Credit Commitment or (ii) the Borrowing Base and, in
the event there shall be outstanding any such excess, the Borrower
shall immediately make such payments and prepayments as shall be
necessary to comply with this restriction. Each Revolving Loan
hereunder, other than Base Rate Refunding Loans, and each Conversion
under Section 3.8, hereof shall be in an amount of at least $5,000,000,
and, if greater than $5,000,000, an integral multiple of $1,000,000.
(c) Advances.
(i) An Authorized Representative shall give the
Agent (1) at least three (3) Business Days' irrevocable
written notice by telefacsimile transmission of a Borrowing
Notice or Interest Rate Selection Notice (as applicable) with
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appropriate insertions, effective upon receipt, of each
Revolving Loan that is a Eurodollar Rate Loan (whether
representing an additional borrowing hereunder or the
conversion of a borrowing hereunder from Base Rate Loans to
Eurodollar Rate Loans) prior to 10:30 A.M. and (2) irrevocable
written notice by telefacsimile transmission of a Borrowing
Notice or Interest Rate Selection Notice (as applicable) with
appropriate insertions, effective upon receipt, of each
Revolving Loan (other than Base Rate Refunding Loans to the
extent the same are effected without notice pursuant to
Section 3.1(c)(iv)) hereof that is a Base Rate Loan (whether
representing an additional borrowing hereunder or the
Conversion of borrowing hereunder from Eurodollar Rate Loans
to Base Rate Loans) prior to 10:30 A.M. on the day of such
proposed Loan. Each such notice shall specify the amount of
the borrowing, the type of Revolving Loan (Base Rate or
Eurodollar Rate), the date of borrowing and, if a Eurodollar
Rate Loan, the Interest Period to be used in the computation
of interest. Notice of receipt of such Borrowing Notice or
Interest Rate Selection Notice, as the case may be, together
with the amount of each Lender's portion of an Advance
requested thereunder, shall be provided by the Agent to each
Lender by telefacsimile transmission with reasonable
promptness, but (provided the Agent shall have received such
notice by 10:30 A.M.) not later than 1:00 P.M. on the same day
as the Agent's receipt of such notice.
(ii) Not later than 2:00 P.M. on the date
specified for each borrowing under this Section 3.1 hereof,
each Lender shall, pursuant to the terms and subject to the
conditions of this Agreement, make the amount of the Advance
or Advances to be made by it on such day available by wire
transfer to the Agent in the amount of its pro rata share,
determined according to such Lender's Applicable Commitment
Percentage of the Revolving Loan or Revolving Loans to be made
on such day. Such wire transfer shall be directed to the Agent
at the Principal Office and shall be in the form of Dollars
constituting immediately available funds. The amount so
received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the
Borrower by delivery of the proceeds thereof to the Borrower's
Account or otherwise as shall be directed in the applicable
Borrowing Notice by the Authorized Representative and
reasonably acceptable to the Agent.
(iii) The Borrower shall have the option to elect
the duration of the initial and any subsequent Interest
Periods and to Convert the Revolving Loans in accordance with
Section 3.8 hereof. Eurodollar Rate Loans and Base Rate Loans
may be outstanding at the same time, provided, however, there
shall not be outstanding at any one time Eurodollar Rate Loans
(including Eurodollar Rate Segments) having more than twelve
(12) different Interest Periods. If the Agent does not receive
a Borrowing Notice or an Interest Rate Selection Notice giving
notice of election of the duration of an Interest Period or of
Conversion of any
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Loan to or Continuation of a Loan as a Eurodollar Rate Loan by
the time prescribed by Section 3.1(c) or 3.8 hereof, the
Borrower shall be deemed to have elected to Convert such Loan
to (or Continue such Loan as) a Base Rate Loan until the
Borrower notifies the Agent in accordance with Section 3.8
hereof.
(iv) Notwithstanding the foregoing, if a drawing
is made under any Letter of Credit, such drawing is honored by
the Issuing Bank prior to the Stated Termination Date, and the
Borrower shall not immediately fully reimburse the Issuing
Bank in respect of such drawing, (A) provided that the
conditions to making a Revolving Loan as herein provided shall
then be satisfied, the Reimbursement Obligation arising from
such drawing shall be paid to the Issuing Bank by the Agent
without the requirement of notice to or from the Borrower from
immediately available funds which shall be advanced as a Base
Rate Refunding Loan by each Lender under the Revolving Credit
Facility in an amount equal to such Lender's Applicable
Commitment Percentage of such Reimbursement Obligation, and
(B) if the conditions to making a Revolving Loan as herein
provided shall not then be satisfied, each of the Lenders
shall fund by payment to the Agent (for the benefit of the
Issuing Bank) in immediately available funds the purchase from
the Issuing Bank of their respective Participations in the
related Reimbursement Obligation based on their respective
Applicable Commitment Percentages of the Total Letter of
Credit Commitment. If a drawing is presented under any Letter
of Credit in accordance with the terms thereof and the
Borrower shall not immediately reimburse the Issuing Bank in
respect thereof, then notice of such drawing or payment shall
be provided promptly by the Issuing Bank to the Agent and the
Agent shall provide notice to each Lender by telephone or
telefacsimile transmission. If notice to the Lenders of a
drawing under any Letter of Credit is given by the Agent at or
before 12:00 noon on any Business Day, each Lender shall,
pursuant to the conditions specified in this Section
3.1(c)(iv) hereof, either make a Base Rate Refunding Loan or
fund the purchase of its Participation in the amount of such
Lender's Applicable Commitment Percentage of such drawing or
payment and shall pay such amount to the Agent for the account
of the Issuing Bank at the Principal Office in Dollars and in
immediately available funds before 2:30 P.M. on the same
Business Day. If notice to the Lenders of a drawing under a
Letter of Credit is given by the Agent after 12:00 noon on any
Business Day, each Lender shall, pursuant to the conditions
specified in this Section 3.1(c)(iv) hereof, either make a
Base Rate Refunding Loan or fund the purchase of its
Participation in the amount of such Lender's Applicable
Commitment Percentage of such drawing or payment and shall pay
such amount to the Agent for the account of the Issuing Bank
at the Principal Office in Dollars and in immediately
available funds before 12:00 noon on the next following
Business Day. Any such Base Rate Refunding Loan shall be
advanced as, and shall continue as, a Base Rate Loan unless
and until the Borrower Converts such Base Rate Loan in
accordance with the terms of Section 3.8 hereof.
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III.2. Payment of Interest.
(a) The Borrower shall pay interest to the Agent for the
account of each Lender on the outstanding and unpaid principal amount
of each Revolving Loan made by such Lender for the period commencing on
the date of such Revolving Loan until such Revolving Loan shall be
paid, continued or converted, as the case may be, at the then
applicable Base Rate for Base Rate Loans or applicable Eurodollar Rate
for Eurodollar Rate Loans, as designated by the Authorized
Representative pursuant to Section 3.1 hereof; provided, however, that
if any Event of Default shall have occurred and be continuing, all
amounts outstanding hereunder shall bear interest thereafter at the
Default Rate until such Event of Default is waived.
(b) Interest on each Revolving Loan shall be computed on
the basis of a year of 360 days and calculated in each case for the
actual number of days elapsed. Interest on each Revolving Loan shall be
paid (i) quarterly in arrears on the last Business Day of each
September, December, March and June, commencing September 30, 1998 for
each Base Rate Loan, (ii) on the last day of the applicable Interest
Period for each Eurodollar Rate Loan and, if such Interest Period
extends for more than three (3) months, at intervals of three (3)
months after the first day of such Interest Period, and (iii) upon
payment in full of the principal amount of such Revolving Loan.
III.3. Payment of Principal. The principal amount of each Revolving
Loan shall be due and payable to the Agent for the benefit of each Lender in
full on the Revolving Credit Termination Date, or earlier as specifically
provided herein. The principal amount of any Base Rate Loan may be prepaid in
whole or in part at any time. The principal amount of any Eurodollar Rate Loan
may be prepaid only at the end of the applicable Interest Period unless the
Borrower shall pay to the Agent for the account of the Lenders the additional
amount, if any, required under Section 6.5 hereof. All prepayments of Revolving
Loans made by the Borrower shall be in the amount of $5,000,000 or such greater
amount which is an integral multiple of $1,000,000, or the amount equal to all
Revolving Credit Outstandings, or such other amount as necessary to comply with
Section 3.1(b) or Section 3.7 hereof.
III.4. Manner of Payment.
(a) Each payment of principal (including any prepayment)
and payment of interest and fees, and any other amount required to be
paid to the Lenders with respect to the Revolving Loans, shall be made
to the Agent at the Principal Office, for the account of each Lender,
in Dollars and in immediately available funds, without setoff,
deduction, or counterclaim before 12:30 P.M. on the date such payment
is due. The Agent may, but shall not be obligated to, debit the amount
of any such payment which is not made by such time to any ordinary
deposit account, if any, of the Borrower with the Agent.
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(b) The Agent shall deem any payment made by or on behalf
of the Borrower hereunder that is not made both in Dollars and in
immediately available funds and prior to 12:30 P.M. to be a
non-conforming payment. Any such payment shall not be deemed to be
received by the Agent until the later of (i) the time such funds become
available funds and (ii) the next Business Day. Any non-conforming
payment may, at the election, of the Agent constitute or become a
Default or Event of Default. Interest shall continue to accrue on any
principal as to which a non-conforming payment is made until the later
of (x) the date such funds become available funds or (y) the next
Business Day at the Default Rate from the date such amount was due and
payable.
(c) In the event that any payment hereunder or under the
Revolving Notes becomes due and payable on a day other than a Business
Day, then such due date shall be extended to the next succeeding
Business Day unless provided otherwise under clause (ii) of the
definition of "Interest Period"; provided that interest shall continue
to accrue during the period of any such extension and provided further,
that in no event shall any such due date be extended beyond the
Revolving Credit Termination Date.
III.5. Revolving Notes and Swing Line Notes.
(a) Revolving Loans made by each Lender shall be
evidenced by the Revolving Note payable to the order of such Lender in
the respective amount of its Applicable Commitment Percentage of the
Revolving Credit Commitment, which Revolving Note shall be dated the
Closing Date or a later date pursuant to an Assignment and Acceptance
and shall be duly completed, executed and delivered by the Borrower.
(b) Swing Line Loans made by NationsBank shall be
evidenced by, and be repayable with interest in accordance with the
terms of, the Swing Line Note dated the Closing Date and duly executed
and delivered by the Borrower.
III.6. Pro Rata Payments. Except as otherwise provided herein, (a)
each payment on account of the principal of and interest on the Revolving Loans
and the fees described in Section 3.10 hereof shall be made to the Agent for the
account of the Lenders pro rata based on their Applicable Commitment
Percentages, (b) all payments to be made by the Borrower for the account of each
of the Lenders on account of principal, interest and fees, shall be made without
diminution, setoff, recoupment or counterclaim, and (c) the Agent will promptly
distribute to the Lenders in immediately available funds payments received in
fully collected, immediately available funds from the Borrower.
III.7. Optional Commitment Reductions. The Borrower shall, by notice
from an Authorized Representative, have the right from time to time but not more
frequently than once each calendar month, upon not less than three (3) Business
Days' written notice to the Agent, effective upon receipt, to permanently reduce
the Total Revolving Credit Commitment. The
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Agent shall give each Lender, within one (1) Business Day of receipt of such
notice, telefacsimile notice, or telephonic notice (confirmed in writing), of
such reduction. Each such reduction shall be in the aggregate amount of
$1,000,000 or such greater amount which is in an integral multiple of
$1,000,000, or the entire remaining Total Revolving Credit Commitment, and shall
permanently reduce the Total Revolving Credit Commitment. Each reduction of the
Total Revolving Credit Commitment shall be accompanied by payment of the
Revolving Loans to the extent that the principal amount of Revolving Credit
Outstandings plus Swing Line Outstandings plus Letter of Credit Outstandings
exceeds either (i) the Total Revolving Credit Commitment or (ii) the Borrowing
Base, after giving effect to such reduction, together with accrued and unpaid
interest on the amounts prepaid. No such reduction shall result in the payment
of any Eurodollar Rate Loan other than on the last day of the Interest Period of
such Eurodollar Rate Loan unless such prepayment is accompanied by amounts due,
if any, under Section 6.5 hereof.
III.8. Conversions and Elections of Subsequent Interest Periods.
Subject to the limitations set forth below and in Article VI, the Borrower may:
(a) upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before
10:30 A.M. on any Business Day, Convert all or a part of Eurodollar
Rate Loans to Base Rate Loans on the last day of the Interest Period
for such Eurodollar Rate Loans; and
(b) provided that no Default or Event of Default shall
have occurred and be continuing upon delivery, effective upon receipt,
of a properly completed Interest Rate Selection Notice to the Agent on
or before 10:30 A.M. three (3) Business Days' prior to the date of such
election or Conversion:
(i) elect a subsequent Interest Period for all
or a portion of Eurodollar Rate Loans to begin on the last day
of the then current Interest Period for such Eurodollar Rate
Loans; and
(ii) Convert Base Rate Loans to Eurodollar Rate
Loans on any Business Day.
Each election and Conversion pursuant to this Section 3.8 hereof shall
be subject to the limitations on Eurodollar Rate Loans set forth in the
definition of "Interest Period" herein and in Sections 3.1, 3.3 and Article VI
hereof. The Agent shall give written notice to each Lender of such notice of
election or Conversion prior to 3:00 P.M. on the day such notice of election or
Conversion is received. All such Continuations or Conversions of Loans shall be
effected pro rata based on the Applicable Commitment Percentages of the Lenders.
III.9. Increase and Decrease in Amounts. The amount of the Total
Revolving Credit Commitment which shall be available to the Borrower as Advances
shall be reduced by the
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aggregate amount of Revolving Credit Outstandings, Letters of Credit
Outstandings and Swing Line Outstandings.
III.10. Unused Fee. For the period beginning on the Closing Date and
ending on the Revolving Credit Termination Date, the Borrower agrees to pay to
the Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, an unused fee equal to the product of (a) the average
daily amount by which the Total Revolving Credit Commitment exceeds the sum of
(i) Revolving Credit Outstandings (without giving effect to Swing Line
Outstandings) plus (ii) Letter of Credit Outstandings multiplied by (b) .50% per
annum. Such fees shall be due in arrears on the last Business Day of each
September, December, March and June commencing September 30, 1998 to and on the
Revolving Credit Termination Date. Notwithstanding the foregoing, so long as any
Lender fails to make available any portion of its Revolving Credit Commitment
when requested, such Lender shall not be entitled to receive payment of its pro
rata share of such fee until such Lender shall make available such portion. Such
fee shall be calculated on the basis of a year of 360 days for the actual number
of days elapsed.
III.11. Deficiency Advances; Failure to Purchase Participations. No
Lender shall be responsible for any default of any other Lender in respect to
such other Lender's obligation to make any Revolving Loan hereunder or fund its
purchase of any Participation hereunder nor shall the Revolving Credit
Commitment of any Lender hereunder be increased as a result of such default of
any other Lender. Without limiting the generality of the foregoing, in the event
any Lender shall fail to advance funds to the Borrower as herein provided, the
Agent may in its discretion, but shall not be obligated to, advance under the
applicable Revolving Note in its favor as a Lender all or any portion of such
amount or amounts (each, a "deficiency advance") and shall thereafter be
entitled to payments of principal of and interest on such deficiency advance in
the same manner and at the same interest rate or rates to which such other
Lender would have been entitled had it made such Advance under its Revolving
Note; provided that, (i) such defaulting Lender shall not be entitled to receive
payments of principal, interest or fees with respect to such deficiency advance
until such deficiency advance shall be paid by such Lender and (ii) upon payment
to the Agent from such other Lender of the entire outstanding amount of each
such deficiency advance, together with accrued and unpaid interest thereon, from
the most recent date or dates interest was paid to the Agent by the Borrower on
each Revolving Loan comprising the deficiency advance at the interest rate per
annum for overnight borrowing by the Agent from the Federal Reserve Bank, then
such payment shall be credited against the applicable Revolving Note of the
Agent in full payment of such deficiency advance and the Borrower shall be
deemed to have borrowed the amount of such deficiency advance from such other
Lender as of the most recent date or dates, as the case may be, upon which any
payments of interest were made by such Borrower thereon. In the event any Lender
shall fail to fund its purchase of a Participation after notice from the Issuing
Bank or NationsBank, as the Swing Line lender, as applicable, such Lender shall
pay to the Issuing Bank or NationsBank, as the Swing Line lender, as applicable,
interest on the amount so due from the date of such notice at the interest rate
per annum for overnight borrowing by the Agent from the Federal Reserve Bank to
the date such
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purchase price is received by the Issuing Bank or NationsBank, as the Swing Line
lender, as applicable.
III.12. Use of Proceeds. The proceeds of the Loans made pursuant to
the Revolving Credit Facility shall be used by the Borrower (a) to fund a
portion of the fees and expenses incurred in connection with the HPG
Acquisition, which fees and expenses shall not exceed $21,000,000, (b) for
general working capital needs and (c) for other corporate purposes, including
capital expenditures and Permitted Acquisitions.
III.13. Swing Line. Notwithstanding any other provision of this
Agreement to the contrary, in order to administer the Revolving Credit Facility
in an efficient manner and to minimize the transfer of funds between the Agent
and the Lenders, NationsBank shall make available Swing Line Loans to the
Borrower prior to the Revolving Credit Termination Date. NationsBank shall not
be obligated to make any Swing Line Loan pursuant hereto (i) if to the actual
knowledge of NationsBank the Borrower is not in compliance with all the
conditions to the making of Revolving Loans set forth in this Agreement, (ii) if
after giving effect to such Swing Line Loan, the Swing Line Outstandings exceed
$10,000,000, or (iii) if after giving effect to such Swing Line Loan, the sum of
the Swing Line Outstandings, Revolving Credit Outstandings and Letter of Credit
Outstandings exceeds either (x) the Total Revolving Credit Commitment or (y) the
Borrowing Base. Swing Line Loans shall bear interest at the Base Rate. The
Company may borrow, repay and reborrow under this Section 3.13 hereof. Unless
notified to the contrary by NationsBank, borrowings under the Swing Line shall
be made in the minimum amount of $500,000 or, if greater, in amounts which are
integral multiples of $100,000 or in the amount necessary to effect a Base Rate
Refunding Loan, upon written request by telefacsimile transmission, effective
upon receipt, by an Authorized Representative of the Borrower made to
NationsBank not later than 12:30 P.M. on the Business Day of the requested
borrowing. Each such Borrowing Notice shall specify the amount of the borrowing
and the date of borrowing, and shall be in the form of Exhibit D-2 hereto.
Unless notified to the contrary by NationsBank, each repayment of a Swing Line
Loan shall be in an amount which is an integral multiple of $100,000 or the
aggregate amount of all Swing Line Outstandings. If the Borrower instructs
NationsBank to debit any demand deposit account of the Borrower in the amount of
any payment with respect to a Swing Line Loan, or NationsBank otherwise receives
repayment, after 12:30 P.M. on a Business Day, such payment shall be deemed
received on the next Business Day.
(a) The interest payable on Swing Line Loans is solely
for the account of NationsBank, and all accrued and unpaid interest on
Swing Line Loans shall be payable on the dates and in the manner
provided in Sections 3.2(b) and 3.4 hereof with respect to interest on
Base Rate Loans. The Swing Line Outstandings shall be evidenced by the
Swing Line Note delivered to NationsBank pursuant to Section 3.5(b)
hereof.
(b) Upon the making of a Swing Line Loan, each Lender
shall be deemed to have purchased from NationsBank a Participation
therein in an amount equal to that Lender's Applicable Commitment
Percentage of such Swing Line Loan. Upon demand
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made by NationsBank, each Lender shall, according to its Applicable
Commitment Percentage of such Swing Line Loan, promptly provide to
NationsBank its purchase price therefor in an amount equal to its
Participation therein. Any Advance made by a Lender pursuant to demand
of NationsBank of the purchase price of its Participation shall be
deemed (i) provided that the conditions to making Revolving Loans shall
be satisfied, a Base Rate Refunding Loan under Section 3.1 hereof until
the Borrower Converts such Base Rate Loan in accordance with the terms
of Section 3.8 hereof, and (ii) in all other cases, the funding by each
Lender of the purchase price of its Participation in such Swing Line
Loan. The obligation of each Lender to so provide its purchase price to
NationsBank shall be absolute and unconditional and shall not be
affected by the occurrence of an Event of Default or any other
occurrence or event.
The Borrower, at its option and subject to the terms hereof, may
request an Advance pursuant to Section 3.1 hereof in an amount sufficient to
repay Swing Line Outstandings on any date and the Agent shall provide from the
proceeds of such Advance to NationsBank the amount necessary to repay such Swing
Line Outstandings (which NationsBank shall then apply to such repayment) and
credit any balance of the Advance in immediately available funds in the manner
directed by the Borrower pursuant to Section 3.1(c)(ii) hereof. The proceeds of
such Advances shall be paid to NationsBank for application to the Swing Line
Outstandings and the Lenders shall then be deemed to have made Loans in the
amount of such Advances. The Swing Line shall continue in effect until the
Revolving Credit Termination Date, at which time all Swing Line Outstandings and
accrued interest thereon shall be due and payable in full.
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ARTICLE IV
Letters of Credit
IV.1. Letters of Credit. The Issuing Bank agrees, subject to the
terms and conditions of this Agreement, upon request of the Borrower to issue
from time to time for the account of the Borrower Letters of Credit upon
delivery to the Issuing Bank of an Application and Agreement for Letter of
Credit relating thereto in form and content acceptable to the Issuing Bank;
provided, that (i) the Letter of Credit Outstandings shall not exceed the Total
Letter of Credit Commitment and (ii) no Letter of Credit shall be issued if,
after giving effect thereto, Letter of Credit Outstandings plus Revolving Credit
Outstandings plus Swing Line Outstandings shall exceed either (x) the Total
Revolving Credit Commitment or (y) the Borrowing Base. No Letter of Credit shall
have an expiry date (including all rights of the Borrower or any beneficiary
named in such Letter of Credit to require renewal) or payment date occurring
later than the earlier to occur of (x) (i) in the case of standby Letters of
Credit, one year after the date of its issuance and (ii) in the case of
documentary Letters of Credit, 120 days or (y) the Stated Termination Date.
IV.2. Reimbursement.
(a) The Borrower hereby unconditionally agrees to pay to
the Issuing Bank immediately on demand at the Principal Office all
amounts required to pay all drafts drawn or purporting to be drawn
under the Letters of Credit and all reasonable expenses incurred by the
Issuing Bank in connection with the Letters of Credit, and in any event
and without demand to place in possession of the Issuing Bank (which
shall include Advances under the Revolving Credit Facility if permitted
by Section 3.1 hereof and Swing Line Loans if permitted by Section 3.14
hereof) sufficient funds to pay all debts and liabilities arising under
any Letter of Credit. The Issuing Bank agrees to give the Borrower
prompt notice of any request for a draw under a Letter of Credit. The
Issuing Bank may charge any account the Borrower may have with it for
any and all amounts the Issuing Bank pays under a Letter of Credit,
plus charges and reasonable expenses as from time to time agreed to by
the Issuing Bank and the Borrower; provided that to the extent
permitted by Section 3.1(c)(iv) hereof and Section 3.14 hereof, amounts
shall be paid pursuant to Advances under the Revolving Credit Facility
or, if the Borrower shall elect, by Swing Line Loans. The Borrower
agrees to pay the Issuing Bank interest on any Reimbursement
Obligations not paid when due hereunder at the Base Rate plus two
percent (2.0%), or the maximum rate permitted by applicable law, if
lower, such rate to be calculated on the basis of a year of 360 days
for actual days elapsed.
(b) In accordance with the provisions of Section 3.1(c)
hereof, the Issuing Bank shall notify the Agent of any drawing under
any Letter of Credit promptly following the receipt by the Issuing Bank
of such drawing.
(c) Each Lender (other than the Issuing Bank) shall
automatically acquire on
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the date of issuance thereof, a Participation in the liability of the
Issuing Bank in respect of each Letter of Credit in an amount equal to
such Lender's Applicable Commitment Percentage of such liability, and
to the extent that the Borrower is obligated to pay the Issuing Bank
under Section 4.2(a) hereof, each Lender (other than the Issuing Bank)
thereby shall absolutely, unconditionally and irrevocably assume, and
shall be unconditionally obligated to pay to the Issuing Bank as
hereinafter described, its Applicable Commitment Percentage of the
liability of the Issuing Bank under such Letter of Credit.
(i) Each Lender (including the Issuing Bank in
its capacity as a Lender) shall, subject to the terms and
conditions of Article III, pay to the Agent for the account of
the Issuing Bank at the Principal Office in Dollars and in
immediately available funds, an amount equal to its Applicable
Commitment Percentage of any drawing under a Letter of Credit,
such funds to be provided in the manner described in Section
3.1(c)(iv) hereof.
(ii) Simultaneously with the making of each
payment by a Lender to the Issuing Bank pursuant to Section
3.1(c)(iv)(B) hereof, such Lender shall, automatically and
without any further action on the part of the Issuing Bank or
such Lender, acquire a Participation in an amount equal to
such payment (excluding the portion thereof constituting
interest accrued prior to the date the Lender made its
payment) in the related Reimbursement Obligation of the
Borrower. The Reimbursement Obligations of the Borrower shall
be immediately due and payable whether by Advances made in
accordance with Section 3.1(c)(iv) hereof, Swing Line Loans
made in accordance with Section 3.14 hereof, or otherwise.
(iii) Each Lender's obligation to make payment to
the Agent for the account of the Issuing Bank pursuant to
Section 3.1(c)(iv) hereof and this Section 4.2(c) hereof, and
the right of the Issuing Bank to receive the same, shall be
absolute and unconditional, shall not be affected by any
circumstance whatsoever and shall be made without any offset,
abatement, withholding or reduction whatsoever. If any Lender
is obligated to pay but does not pay amounts to the Agent for
the account of the Issuing Bank in full upon such request as
required by Section 3.1(c)(iv) hereof or this Section 4.2(c)
hereof, such Lender shall, on demand, pay to the Agent for the
account of the Issuing Bank interest on the unpaid amount for
each day during the period commencing on the date of notice
given to such Lender pursuant to Section 3.1(c) hereof until
such Lender pays such amount to the Agent for the account of
the Issuing Bank in full at the interest rate per annum for
overnight borrowing by the Agent from the Federal Reserve
Bank.
(iv) In the event the Lenders have purchased
Participations in any
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Reimbursement Obligation as set forth in clause (ii) above,
then at any time payment (in fully collected, immediately
available funds) of such Reimbursement Obligation, in whole or
in part, is received by Issuing Bank from the Borrower,
Issuing Bank shall promptly pay to each Lender an amount equal
to its Applicable Commitment Percentage of such payment from
the Borrower.
(d) Promptly following the end of each calendar quarter,
the Issuing Bank shall deliver to the Agent a notice describing the
aggregate undrawn amount of all Letters of Credit at the end of such
quarter. Upon the request of any Lender from time to time, the Issuing
Bank shall deliver to the Agent, and the Agent shall deliver to such
Lender, any other information reasonably requested by such Lender with
respect to each Letter of Credit outstanding.
(e) The issuance by the Issuing Bank of each Letter of
Credit shall, in addition to the conditions precedent set forth in
Article VII, be subject to the conditions that such Letter of Credit be
in such form and contain such terms as shall be reasonably satisfactory
to the Issuing Bank consistent with the then current practices and
procedures of the Issuing Bank with respect to similar letters of
credit, and the Borrower shall have executed and delivered such other
instruments and agreements relating to such Letters of Credit as the
Issuing Bank shall have reasonably requested consistent with such
practices and procedures. All Letters of Credit shall be issued
pursuant to and subject to the Uniform Customs and Practice for
Documentary Credits, 1993 revision, International Chamber of Commerce
Publication No. 500 and all subsequent amendments and revisions
thereto.
(f) The Borrower agrees that Issuing Bank may, in its
sole discretion, accept or pay, as complying with the terms of any
Letter of Credit, any drafts or other documents otherwise in order
which may be signed or issued by an administrator, executor, trustee in
bankruptcy, debtor in possession, assignee for the benefit of
creditors, liquidator, receiver, attorney in fact or other legal
representative of a party who is authorized under such Letter of Credit
to draw or issue any drafts or other documents.
(g) Without limiting the generality of the provisions of
Section 13.5 hereof, the Borrower hereby agrees to indemnify and hold
harmless the Issuing Bank, each other Lender and the Agent from and
against any and all claims and damages, losses, liabilities, reasonable
costs and expenses which the Issuing Bank, such other Lender or the
Agent may incur (or which may be claimed against the Issuing Bank, such
other Lender or the Agent) by any Person by reason of or in connection
with the issuance or transfer of or payment or failure to pay under any
Letter of Credit; provided that the Borrower shall not be required to
indemnify the Issuing Bank, any other Lender or the Agent for any
claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, (i) caused by the willful misconduct or gross
negligence of the party to be indemnified or (ii) caused by the failure
of the Issuing Bank to pay under any Letter of Credit after the
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presentation to it of a request for payment strictly complying with the
terms and conditions of such Letter of Credit, unless such payment is
prohibited by any law, regulation, court order or decree. The
indemnification and hold harmless provisions of this Section 4.2(g)
hereof shall survive the Facility Termination Date.
(h) Without limiting Borrower's rights as set forth in
Section 4.2(g) hereof, the obligation of the Borrower to immediately
reimburse the Issuing Bank for drawings made under Letters of Credit
and the Issuing Bank's right to receive such payment shall be absolute,
unconditional and irrevocable, and that such obligations of the
Borrower shall be performed strictly in accordance with the terms of
this Agreement and such Letters of Credit and the related Applications
and Agreement for any Letter of Credit, under all circumstances
whatsoever, including the following circumstances:
(i) any lack of validity or enforceability of
the Letter of Credit, the obligation supported by the Letter
of Credit or any other agreement or instrument relating
thereto (collectively, the "Related LC Documents");
(ii) any amendment or waiver of or any consent to
or departure from all or any of the Related LC Documents;
(iii) the existence of any claim, setoff, defense
(other than the defense of payment in accordance with the
terms of this Agreement) or other rights which the Borrower
may have at any time against any beneficiary or any transferee
of a Letter of Credit (or any persons or entities for whom any
such beneficiary or any such transferee may be acting), the
Agent, the Lenders or any other Person, whether in connection
with the Loan Documents, the Related LC Documents or any
unrelated transaction;
(iv) any breach of contract or other dispute
between the Borrower and any beneficiary or any transferee of
a Letter of Credit (or any persons or entities for whom such
beneficiary or any such transferee may be acting), the Agent,
the Lenders or any other Person;
(v) any draft, statement or any other document
presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect
whatsoever; or
(vi) any delay, extension of time, renewal,
compromise or other indulgence or modification granted or
agreed to by the Agent, with or without notice to or approval
by the Borrower in respect of any of Borrower's Obligations
under this Agreement.
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IV.3. Letter of Credit Facility Fees. The Borrower shall pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, an issuance fee on the aggregate amount available to be
drawn on each (i) Letter of Credit which provides credit support, other than in
connection with a commercial transaction, at a rate equal to the Applicable
Margin, and (ii) Letter of Credit which provides credit support in a commercial
transaction, of 1/4% for each 120 day term or part thereof of such Letter of
Credit. Such fees shall be due with respect to each Letter of Credit quarterly
in arrears on the last day of each December, March, June and September, the
first such payment to be made on the first such date occurring after the date of
issuance of a Letter of Credit. The fees described in this Section 4.3 before
shall be calculated on the basis of a year of 360 days for the actual number of
days elapsed.
IV.4. Administrative Fees. The Borrower shall pay to the Issuing
Bank (i) such administrative fee and other fees, if any, in connection with the
Letters of Credit in such amounts and at such times as the Issuing Bank and the
Borrower shall agree from time to time and (ii) a fronting fee for each Letter
of Credit equal to 1/8% on the aggregate amount available to be drawn on each
Letter of Credit.
IV.5. Existing Letters of Credit. The parties hereto agree that on
the Closing Date all Existing Letters of Credit shall be deemed Letters of
Credit hereunder and the outstanding undrawn face amount of such Existing
Letters of Credit shall be deemed Letter of Credit Outstandings hereunder.
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ARTICLE V
Security
V.1. Security Interest. As security for the full and timely payment
and performance of all Obligations, and as a continuation of the security
interests and rights granted by the Borrower and its Domestic Subsidiaries under
the Existing Credit Agreement and the Security Instruments (as defined therein),
the Borrower shall, and shall cause each Domestic Subsidiary to, on or before
the Closing Date deliver to the Agent, in form and substance reasonably
acceptable to the Agent, the Security Agreement, the Intellectual Property
Security Agreement, the Landlord Waivers and such duly executed and filed
Uniform Commercial Code financing statements sufficient to grant to the Agent a
valid, duly perfected security interest in the Collateral described therein,
subject to no prior Liens other than Permitted Liens, and do all things
reasonably necessary in the opinion of the Agent and its counsel to grant to and
continue with the Agent for the benefit of the Lenders a first priority security
interest, duly perfected with respect to Collateral governed by the UCC, in all
Collateral subject to no prior Lien or other encumbrance or restriction on
transfer (other than restrictions on transfer imposed by applicable securities
laws and Permitted Liens).
V.2. Stock Pledge. As security for the full and timely payment and
performance of all Obligations now existing or hereafter arising, the Borrower
and each Domestic Subsidiary owning any Pledged Stock shall on or before the
Closing Date deliver to the Agent, in form and substance reasonably acceptable
to the Agent, the Stock Pledge Agreement together with certificates representing
such Pledged Stock and such stock powers duly executed in blank as may be
required by the Agent in accordance with the terms hereof and thereof. In
addition to any Stock Pledge Agreement required to be delivered pursuant to
Section 9.21 hereof, the Borrower and each Subsidiary hereby agrees to pledge to
the Agent for the benefit of the Lenders (a) 100% of the capital stock and
related interests and rights directly or indirectly owned by the Borrower of any
Domestic Subsidiary or Domestic Control Subsidiary hereafter acquired or
created, (b) 65% of the voting stock and related interests and rights directly
or indirectly owned by the Borrower of any Direct Foreign Subsidiary or Direct
Foreign Control Subsidiary hereafter acquired or created and (c) 100% of the
capital stock and related interests and rights directly or indirectly owned by
the Borrower of any Foreign Subsidiary or Foreign Control Subsidiary of the
Borrower to the extent such action would not result in any material adverse tax
impact on the Borrower and, in each case, to deliver to the Agent a Stock Pledge
Agreement substantially in the form of Exhibit G hereto within thirty (30) days
of the acquisition or creation of such Subsidiary.
V.3. Guaranty. To guarantee the full and timely payment and
performance of all Obligations now existing or hereafter arising, the Borrower
shall cause the Guaranty to be delivered by each Domestic Subsidiary, in form
and substance reasonably acceptable to the Agent, on or before the Closing Date.
The Borrower hereby agrees to cause a Guaranty to be delivered by any hereafter
acquired, created or arising (a) Domestic Subsidiary and (b) Foreign Subsidiary
to the extent such action would not result in (i) any material adverse tax
impact on the
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Borrower or (ii) any violation of any debt agreement to which such Foreign
Subsidiary is a party.
V.4. Mortgages. As security for the full and timely payment and
performance of all Obligations now existing or hereafter arising, the Borrower
shall cause the Mortgage to be delivered to the Agent after the Closing Date
with respect to any material real property (other than the Florida Office) that
is acquired by the Borrower or any Domestic Subsidiary, in form and substance
reasonably acceptable to the Agent. The Borrower shall deliver to the Agent all
environmental reports, title insurance, appraisals, surveys, legal opinions and
other certificates and documents reasonably requested by the Agent in connection
with such Mortgage.
V.5. Intellectual Property. As security for the full and timely
payment and performance of all Obligations now existing or hereafter arising,
the Borrower and each Domestic Subsidiary owning any material patents, patent
applications, trademarks, trademark registrations and applications therefor,
copyrights, copyright registrations and applications therefor or any other
material intellectual property, shall deliver to the Agent for the benefit of
the Lenders the Intellectual Property Security Agreements and the Intellectual
Property Assignments and opinions of counsel to the Borrower and such Domestic
Subsidiary in any appropriate jurisdiction designated by the Agent as to the
validity and enforceability of such agreements and such other legal matters as
the Agent reasonably requests, in form and substance reasonably acceptable to
the Agent and the Lenders. In addition to any Intellectual Property Security
Agreement required to be delivered pursuant to Section 9.21 hereof, the Borrower
hereby agrees to pledge, or cause to be pledged, all intellectual property
interests and licenses hereafter acquired or created and owned by the Borrower
or any Domestic Subsidiary within thirty (30) days of the acquisition or
creation of such intellectual property or license.
V.6. Information Regarding Collateral. The Borrower represents,
warrants and covenants that (a) the chief executive office of the Borrower and
each Guarantor at the Closing Date is located at the address or addresses
specified on Schedule 5.6 hereto, and (b) Schedule 5.6 hereto contains a true
and complete list of (i) the legal name and address of the Borrower and each
Guarantor and of each other Person that has effected any merger or consolidation
with the Borrower or a Guarantor or contributed or transferred to the Borrower
or a Guarantor any significant portion of its assets constituting Collateral at
any time since January 1, 1993 (excluding Persons making sales in the ordinary
course of their businesses to the Borrower or a Guarantor of property
constituting inventory in the hands of such seller), (ii) each location at which
goods constituting Collateral are now located (together with the name of each
owner of the property located at such address if not the Borrower or the
applicable Guarantor, and a summary description of the relationship between the
applicable Guarantor and such Person), and (iii) each currently used trade style
and each trade name used by the Borrower or any Guarantor since January 1, 1993
and the purposes for which it was used. Borrower shall not change, and shall not
permit any other Guarantor to change, the location of its chief executive office
or any location specified in clause (ii) of the immediately preceding sentence,
or use or permit any Guarantor to use, any additional trade style, except upon
giving not less than thirty (30) days' prior written notice to the Agent and
taking or causing to be taken all such action at Borrower's
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or such other Guarantor's expense as may be reasonably requested by the Agent to
perfect or maintain the perfection of the Lien of the Agent in Collateral.
V.7. Further Assurances. At the request of the Agent, the Borrower
will, and will cause each Subsidiary to, execute by its duly authorized
officers, alone or with the Agent, any certificate, instrument, statement or
document and will procure any such certificate, instrument, statement or
document (and pay all connected costs) which the Agent reasonably deems
necessary to create or preserve the Liens (and the perfection and priority
thereof) of the Agent for the benefit of the Lenders contemplated hereby and by
the other Loan Documents and specifically including all Collateral acquired by
the Borrower or any Guarantor after the Closing Date.
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ARTICLE VI
Change in Circumstances
VI.1. Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any applicable
law, rule, or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office)
with any request or directive (whether or not having the force of law)
of any such governmental authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with respect
to any Loans, its Notes, or its obligation to make Loans, or
change the basis of taxation of any amounts payable to such
Lender (or its Applicable Lending Office) under this Agreement
or its Notes in respect of any Loans (other than taxes imposed
on the overall net income of such Lender by the jurisdiction
in which such Lender has its principal office or such
Applicable Lending Office and franchise taxes);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement
(other than the Reserve Requirement utilized in the
determination of the Eurodollar Rate) relating to any
extensions of credit or other assets of, or any deposits with
or other liabilities or commitments of, such Lender (or its
Applicable Lending Office), including the Commitments of such
Lender hereunder; or
(iii) shall impose on such Lender (or its
Applicable Lending Office) or on the United States market for
certificates of deposit or the London interbank market any
other condition affecting this Agreement or its Note or any of
such extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, Converting into,
Continuing, or maintaining any Loans or to reduce any sum received or
receivable by such Lender (or its Applicable Lending Office) under this
Agreement or its Notes with respect to any Loans, then the Borrower
shall pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction. If any
Lender requests compensation by the Borrower under this Section 6.1(a)
hereof, the Borrower may, by notice to such Lender (with a copy to the
Agent), suspend the obligation of such Lender to make or Continue Loans
of the Type with respect to which such compensation is
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requested, or to Convert Loans of any other Type into Loans of such
Type, until the event or condition giving rise to such request ceases
to be in effect (in which case the provisions of Section 6.4 hereof
shall be applicable); provided that such suspension shall not affect
the right of such Lender to receive the compensation so requested.
(b) If, after the date hereof, any Lender shall have
determined that the adoption of any applicable law, rule, or regulation
regarding capital adequacy or any change therein or in the
interpretation or administration thereof by any governmental authority,
central bank, or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
governmental authority, central bank, or comparable agency, has or
would have the effect of reducing the rate of return on the capital of
such Lender or any corporation controlling such Lender as a consequence
of such Lender's obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies
with respect to capital adequacy), then from time to time upon demand
the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender for such reduction.
(c) Each Lender shall promptly notify the Borrower and
the Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to
this Section 6.1 hereof and will designate a different Applicable
Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to it. Any Lender
claiming compensation under this Section 6.1 hereof shall furnish to
the Borrower and the Agent a statement setting forth the additional
amount or amounts to be paid to it hereunder which shall be conclusive
in the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
VI.2. Limitation on Types of Loans. If on or prior to the first day
of any Interest Period for any Eurodollar Rate Loan:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination
shall be conclusive) and notify the Agent that the Eurodollar Rate will
not adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Rate Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the
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Lenders shall be under no obligation to make additional Loans of such Type,
Continue Loans of such Type, or to Convert Loans of any other Type into Loans of
such Type and the Borrower shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Loans of the affected Type, either prepay
such Loans or Convert such Loans into another Type of Loan in accordance with
the terms of this Agreement.
VI.3. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Rate Loans
hereunder, then such Lender shall promptly notify the Borrower thereof and such
Lender's obligation to make or Continue Eurodollar Rate Loans and to Convert
other Types of Loans into Eurodollar Rate Loans shall be suspended until such
time as such Lender may again make, maintain, and fund Eurodollar Rate Loans (in
which case the provisions of Section 6.4 hereof shall be applicable).
VI.4. Treatment of Affected Loans. If the obligation of any Lender
to make a particular Type of Eurodollar Rate Loan or to Continue, or to Convert
Loans of any other Type into, Loans of a particular Type shall be suspended
pursuant to Section 6.1 or 6.3 hereof (Loans of such Type being herein called
"Affected Loans" and such Type being herein called the "Affected Type"), such
Lender's Affected Loans shall be automatically Converted into Base Rate Loans on
the last day(s) of the then current Interest Period(s) for Affected Loans (or,
in the case of a Conversion required by Section 6.3 hereof, on such earlier date
as such Lender may specify to the Borrower with a copy to the Agent) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Section 6.1 or 6.3 hereof that gave rise to such Conversion no
longer exist:
(a) to the extent that such Lender's Affected Loans have
been so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued
by such Lender as Loans of the Affected Type shall be made or Continued
instead as Base Rate Loans, and all Loans of such Lender that would
otherwise be Converted into Loans of the Affected Type shall be
Converted instead into (or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 6.1 or 6.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 6.4 hereof
no longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective
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Commitments.
VI.5. Compensation. Upon the request of any Lender, the Borrower
shall pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a
Eurodollar Rate Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 11.1 hereof) on a date
other than the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason
(including, without limitation, the failure of any condition precedent
specified in Article VII to be satisfied) to borrow (other than by
reason of the failure of a Lender or Lenders to make funds available
without cause), Convert, Continue, or prepay a Eurodollar Rate Loan on
the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment,
Continuation, or Conversion under this Agreement.
The Borrower hereby acknowledges that such losses, costs and expenses
requiring compensation from the Borrower shall include any such loss, cost or
expense incurred within 90 days after the Closing Date in connection with the
syndication of the Facilities. Any Lender claiming compensation under this
Section 6.5 hereof shall furnish the Borrower and the Agent a statement setting
forth in reasonable detail the amounts to be paid to it hereunder and the
determination thereof shall be conclusive absent manifest error.
VI.6. Taxes.
(a) Any and all payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any
and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Lender (or its Applicable Lending Office)
or the Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable under
this Agreement or any other Loan Document to any Lender or the Agent,
(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 6.6 hereof) such Lender or
the Agent receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make
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such deductions, (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance
with applicable law, and (iv) the Borrower shall furnish to the Agent,
at its address referred to in Section 13.2 hereof, the original or a
certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any
payment made under this Agreement or any other Loan Document or from
the execution or delivery of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other
Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 6.6 hereof) paid by
such Lender or the Agent (as the case may be) and any liability
(including penalties, interest, and expenses) arising therefrom or with
respect thereto.
(d) Each Lender organized under the laws of a
jurisdiction outside the United States, on or prior to the date of its
execution and delivery of this Agreement in the case of each Lender
listed on the signature pages hereof and on or prior to the date on
which it becomes a Lender in the case of each other Lender, and from
time to time thereafter if requested in writing by the Borrower or the
Agent (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal Revenue
Service Form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender
is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments
of interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or
business in the United States, (ii) Internal Revenue Service Form W-8
or W-9, as appropriate, or any successor form prescribed by the
Internal Revenue Service, and (iii) any other form or certificate
required by any taxing authority (including any certificate required by
Sections 871(h) and 881(c) of the Internal Revenue Code), certifying
that such Lender is entitled to an exemption from or a reduced rate of
tax on payments pursuant to this Agreement or any of the other Loan
Documents.
(e) For any period with respect to which a Lender has
failed to provide the Borrower and the Agent with the appropriate form
pursuant to Section 6.6(d) hereof (unless such failure is due to a
change in treaty, law, or regulation occurring subsequent to the date
on which a form originally was required to be provided), such Lender
shall not be entitled to indemnification under Section 6.6(a), 6.6(b)
or 6.6(c) hereof with respect to Taxes imposed by the United States;
provided, however, that should a Lender, which is otherwise exempt from
or subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required hereunder, the
Borrower shall take
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such steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes at such Lender's expense.
(f) If the Borrower is required to pay additional amounts
to or for the account of any Lender pursuant to this Section 6.6
hereof, then such Lender will agree to use reasonable efforts to change
the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment
of Taxes, the Borrower shall furnish to the Agent evidence of such
payment.
(h) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of
the Borrower contained in this Section 6.6 hereof shall survive the
termination of the Commitments and the payment in full of the Notes.
VI.7. Replacement Banks. The Borrower may, in its sole discretion,
on ten (10) Business Days' prior written notice to the Agent and the applicable
Lender, cause a Lender who has (a) incurred increased costs or is unable to make
Eurodollar Rate Loans, (b) failed to fund any requested Advance, or (c) made any
claim for taxes under Section 6.6 hereof, require such Lender to (and such
Lender shall) assign, pursuant to Section 13.1 hereof, all of its rights and
obligations under this Agreement to an Eligible Assignee designated by the
Borrower which is willing to become a Lender for a purchase price equal to the
outstanding principal amount of the Loans payable to such Lender plus any
accrued but unpaid interest on such Loans, any accrued but unpaid fees with
respect to such Lender's Commitments and any other amount payable to such Lender
under this Agreement; provided, however, that any expenses or other amounts
which would be owing to such Lender pursuant to any indemnification provision
hereof (including, if applicable, Section 6.5 hereof) shall be payable by the
Borrower as if the Borrower had prepaid the Loans of such Lender rather than
such Lender having assigned its interest hereunder. The Borrower or the assignee
shall pay the applicable processing fee under Section 13.1 hereof.
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ARTICLE VII
Conditions to Making Loans and Issuing Letters of Credit
VII.1. Conditions of Initial Advance. The obligation of the Lenders
to make the Term Loans and the initial Advance under the Revolving Credit
Facility, and of the Issuing Bank to issue any additional Letter of Credit, and
of NationsBank to make any Swing Line Loan, is subject to the conditions
precedent that:
(a) the Agent shall have received on the Closing Date, in
form and substance satisfactory to the Agent and Lenders, the
following:
(i) executed originals of each of this
Agreement, the Notes, the Security Instruments and the other
Loan Documents, together with all schedules and exhibits
thereto;
(ii) certificates representing all of the shares
of Pledged Stock, together with undated stock powers executed
in blank;
(iii) the favorable written opinion or opinions
with respect to the Loan Documents and the transactions
contemplated thereby of counsel to the Credit Parties dated
the Closing Date, addressed to the Agent and the Lenders and
satisfactory to Xxxxx Xxxxx Mulliss & Xxxxx, L.L.P., special
counsel to the Agent, substantially in the form of Exhibit P
hereto;
(iv) a certificate of the Chief Financial Officer
of the Borrower, certifying the solvency of the Borrower and
its Subsidiaries on the date of and immediately after giving
effect to the transactions contemplated hereby;
(v) resolutions of the boards of directors or
other appropriate governing body (or of the appropriate
committee thereof) of each Credit Party certified by its
secretary or assistant secretary as of the Closing Date,
approving and adopting the Loan Documents to be executed by
such Person, and authorizing the execution and delivery
thereof;
(vi) specimen signatures of officers of each
Credit Party executing the Loan Documents on behalf of such
Credit Party, certified by the secretary or assistant
secretary of such Credit Party;
(vii) the charter documents of each Credit Party
certified as of a recent date by the Secretary of State of its
state of organization;
(viii) the bylaws of each Credit Party certified as
of the Closing Date as
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true and correct by its secretary or assistant secretary;
(ix) certificates issued as of a recent date by
the Secretaries of State of the respective jurisdictions of
formation of each Credit Party as to the due existence and
good standing of each Credit Party;
(x) appropriate certificates of qualification to
do business, good standing and, where appropriate, authority
to conduct business under assumed name, issued in respect of
each Credit Party as of a recent date by the Secretary of
State or comparable official of each jurisdiction in which the
failure to be qualified to do business or authorized so to
conduct business could have a Material Adverse Effect;
(xi) notice of appointment of the initial
Authorized Representative(s);
(xii) evidence of all insurance required by the
Loan Documents;
(xiii) an initial Borrowing Notice, if any,
Borrowing Base Certificate, and, if elected by the Borrower,
Interest Rate Selection Notice;
(xiv) evidence of the filing of Uniform Commercial
Code financing statements reflecting the filing in all places
required by applicable law to perfect the Liens of the Agent
under the Security Instruments as a first priority Lien as to
items of Collateral in which a security interest may be
perfected by the filing of financing statements, and such
other documents and/or evidence of other actions as may be
necessary under applicable law to perfect the Liens of the
Agent under the Security Instruments as a first priority Lien
in and to such other Collateral as the Agent may require;
(xv) fully executed Landlord Waivers for the
warehouse facilities located in Nevada, Florida, Arkansas,
South Carolina, California, North Carolina and Washington;
(xvi) an executed copy of the Transaction
Documents certified as a full, true and correct copy of such
documents by an Authorized Officer of the Borrower;
(xvii) an executed copy of the Junior Financing
Documents certified as a full, true and correct copy of such
documents by an Authorized Representative of the Borrower;
(xviii) evidence that all fees payable by the
Borrower on the Closing Date to the Agent, NMS and the Lenders
have been paid in full;
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(xix) copies of all executed employment or
compensation agreements with all members of key management of
the Borrower;
(xx) The Agent and the Lenders shall have
received (a) the unaudited financial statements for the
Borrower and its Subsidiaries and HPG for the three-month
period ended March 31, 1998 and for all subsequent monthly
periods ended prior to the Closing Date, (b) audited financial
statements of HPG for each of fiscal years 1995, 1996 and
1997, (c) pro forma consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries as of March 31,
1998 and financial projections of the Borrower and its
Subsidiaries covering not less than five complete Fiscal Years
after the Closing, in each case giving effect to the
Acquisition, the transactions contemplated thereby and the
proposed capital structure, and (d) interim monthly financial
statements and monthly working capital detail for the most
recent trailing twelve months for which internal financial
statements are available and the first projected year, in each
case in form and substance satisfactory to the Agent, all of
which projections and financial statements shall conform to
GAAP applied on a consistent basis except as otherwise
disclosed;
(xxi) certificate of an Authorized Representative
dated the Closing Date certifying as to the matters set forth
in Section 7.1(b)(i), (ii), (iii), (iv), (vi) and (vii) below;
(xxii) copies of independent environmental reports
with respect to the Queretero Property in form and content
acceptable to the Agent and the Lenders;
(xxiii) such other documents, instruments,
certificates and opinions as the Agent or any Lender may
reasonably request on or prior to the Closing Date in
connection with the consummation of the transactions
contemplated hereby;
(b) Each of the following shall be true:
(i) The Junior Financing and the HPG Acquisition
shall have been consummated on terms acceptable to the Agent
and the Lenders;
(ii) there shall not have occurred or become
known to the Agent or the Lenders any event, condition,
situation or status since the date of the information
contained in the financial and business projections, budgets,
pro forma data and forecasts concerning the Credit Parties
delivered to the Agent prior to the Closing Date that has had
or could reasonably be expected to result in a Material
Adverse Effect;
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(iii) There shall not be any action, suit,
investigation or proceeding pending or threatened in any court
or before any arbitrator or governmental instrumentality that
(a) purports to affect the transactions contemplated hereby
(including the HPG Acquisition), (b) could reasonably be
expected to have a material adverse effect on the financings
or any other transactions contemplated hereby (including the
HPG Acquisition), or on the Borrower or its Subsidiaries or
(c) would reasonably be expected to have a material adverse
effect on the ability of the parties hereto and thereto to
perform their obligations hereunder or under the Transaction
Documents;
(iv) the Borrower and its Subsidiaries shall have
received all approvals, consents and waivers, and shall have
made or given all necessary filings and notices as shall be
required to consummate the transactions contemplated hereby
and under the Junior Financing Documents and the Transaction
Documents without the occurrence of any default under,
conflict with or violation of (A) any applicable law, rule,
regulation, order or decree of any Governmental Authority or
arbitral authority or (B) any agreement, document or
instrument to which any of the Borrower or any Subsidiary is a
party or by which any of them or their properties are bound or
(C) the charter documents or bylaws of any Credit Party; and
(v) there shall not have occurred or exist (A)
an engagement in hostilities by the United States of America
or other national or international emergency or calamity, (B)
a general suspension of or material limitation on trading on
the New York Stock Exchange or other national securities
exchange, (C) the declaration of a general banking moratorium
by any applicable Governmental Authority or the imposition by
any applicable Governmental Authority of any material
limitation on transactions of the type contemplated by the
Loan Documents, or (D) any other material disruption of
financial or capital markets that could reasonably be expected
to adversely affect the transactions contemplated under the
Loan Documents.
(vi) There shall not have occurred a material
adverse change since December 31, 1997 in the business,
assets, operations or condition (financial or otherwise) of
the Borrower and its Subsidiaries and HPG, taken as a whole or
prospects of the Borrower and its Subsidiaries, taken as a
whole, or in the facts and information regarding such entities
as represented to date, including, without limitation, the
absence of any (a) event or circumstance, (b) change in laws
or regulations or (c) action, suit, investigation or
proceeding pending or threatened in any court or before any
governmental authority that purports to affect the Borrower or
any of its Subsidiaries, or HPG or any transaction
contemplated hereby, and that could have or could be
reasonably expected to have a Material Adverse Effect or a
material adverse effect on the ability of the Borrower or its
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Subsidiaries or HPG to perform their respective obligations
under the Transaction Documents or the Junior Financing
Documents.
(vii) All of the representations and warranties
and covenants contained in the Transaction Documents and the
Junior Financing Documents shall be true or performed in
accordance with their terms, respectively.
VII.2. Conditions of Loans and Letter of Credit. The obligations of
the Lenders to make any Loans, and the Issuing Bank to issue Letters of Credit,
and of NationsBank to make any Swing Line Loan, hereunder on or subsequent to
the Closing Date are subject to the satisfaction of the following conditions:
(a) the Agent or, in the case of Swing Line Loans,
NationsBank shall have received a Borrowing Notice if required by
Article III;
(b) the representations and warranties of the Borrower
set forth in Article VIII and in each of the other Loan Documents shall
be true and correct in all material respects on and as of the date of
such Advance, Swing Line Loan or Letter of Credit issuance or renewal,
with the same effect as though such representations and warranties had
been made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date and
except that the financial statements referred to in Section 8.6(a)(i)
hereof shall be deemed to be those financial statements most recently
delivered to the Agent and the Lenders pursuant to Section 9.1 hereof
from the date financial statements are delivered to the Agent and the
Lenders in accordance with such Section;
(c) in the case of the issuance of a Letter of Credit,
the Borrower shall have executed and delivered to the Issuing Bank an
Application and Agreement for Letter of Credit in form and content
acceptable to the Issuing Bank together with such other instruments and
documents as it shall request;
(d) at the time of (and after giving effect to) each
Advance, Swing Line Loan or the issuance of a Letter of Credit, no
Default or Event of Default specified in Article X shall have occurred
and be continuing; and
(d) the Agent and the Lenders shall be reasonably
satisfied that the Borrower and each Subsidiary will be Year 2000
Compliant on and after 90 days prior to year 2000.
(e) immediately after giving effect to:
(i) a Revolving Loan, the aggregate principal
balance of all outstanding Loans for each Lender shall not
exceed such Lender's Revolving Credit Commitment;
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(ii) a Letter of Credit or renewal thereof, the
aggregate principal balance of all outstanding Participations
in Letters of Credit and Reimbursement Obligations (or in the
case of the Issuing Bank, its remaining interest after
deduction of all Participations in Letters of Credit and
Reimbursement Obligations of other Lenders) for each Lender
and in the aggregate shall not exceed, respectively, (X) such
Lender's Letter of Credit Commitment or (Y) the Total Letter
of Credit Commitment;
(iii) a Swing Line Loan, the Swing Line
Outstandings shall not exceed $10,000,000; and
(iv) a Revolving Loan, Swing Line Loan or a
Letter of Credit or renewal thereof, the sum of Letter of
Credit Outstandings plus Revolving Credit Outstandings plus
Swing Line Outstandings shall not exceed either (x) the Total
Revolving Credit Commitment or (y) the Borrowing Base.
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ARTICLE VIII
Representations and Warranties
The Borrower represents and warrants with respect to itself and its
Subsidiaries (which representations and warranties are made after giving effect
to the HPG Acquisition and which shall survive the delivery of the documents
mentioned herein and the making of Loans), that:
VIII.1. Organization and Authority.
(a) The Borrower and each Subsidiary is a corporation
duly organized and validly existing under the laws of the jurisdiction
of its formation;
(b) The Borrower and each Subsidiary (x) has the
requisite power and authority to own its properties and assets and to
carry on its business as now being conducted and as contemplated in the
Loan Documents, and (y) is qualified to do business in every
jurisdiction in which failure so to qualify would have a Material
Adverse Effect;
(c) The Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party;
(d) Each Credit Party has the power and authority to
execute, deliver and perform the applicable Facility Guaranty and each
of the other Loan Documents to which it is a party; and
(e) When executed and delivered, each of the Loan
Documents to which the Borrower or any other Credit Party is a party
will be the legal, valid and binding obligation or agreement, as the
case may be, of the Borrower or such Credit Party, enforceable against
the Borrower or such Credit Party in accordance with its terms, subject
to the effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general principles of
equity (whether considered in a proceeding at law or in equity).
VIII.2. Loan Documents. The execution, delivery and performance by the
Borrower and each other Credit Party of each of the Loan Documents to which it
is a party:
(a) have been duly authorized by all requisite corporate
action (including any required shareholder approval) of the Borrower
and each other Credit Party required for the lawful execution, delivery
and performance thereof;
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(b) do not violate any provisions of (i) applicable law,
rule or regulation, (ii) any judgment, writ, order, determination,
decree or arbitral award of any Governmental Authority or arbitral
authority binding on the Borrower or any other Credit Party or its
properties, or (iii) the charter documents or bylaws of the Borrower or
any other Credit Party;
(c) does not and will not be in conflict with, result in
a breach of or constitute an event of default, or an event which, with
notice or lapse of time or both, would constitute an event of default,
under any contract, indenture, agreement or other instrument or
document to which Borrower or any other Credit Party is a party, or by
which the properties or assets of Borrower or any other Credit Party
are bound; and
(d) does not and will not result in the creation or
imposition of any Lien upon any of the properties or assets of Borrower
or any other Credit Party except any Liens in favor of the Agent and
the Lenders created by the Security Instruments.
VIII.3. Solvency. The Borrower and each other Credit Party is Solvent
after giving effect to the transactions contemplated by the Loan Documents.
VIII.4. Subsidiaries and Shareholders. All shares of capital stock or
other equity interests of the Borrower are duly authorized, validly issued,
fully paid and non-assessable. The Borrower has no Subsidiaries other than those
Persons listed as Subsidiaries in Schedule 8.4 hereto and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 9.21 hereof; Schedule 8.4 hereto states as of the date hereof the
organizational form of each entity, the authorized and issued capitalization of
each Subsidiary listed thereon, the number of shares or other equity interests
of each class of capital stock or interest issued and outstanding of each such
Subsidiary and the number and/or percentage of outstanding shares or other
equity interest (including options, warrants and other rights to acquire any
interest) of each such class of capital stock or other equity interest owned by
Borrower or by any such Subsidiary; the outstanding shares or other equity
interests of each such Subsidiary have been duly authorized and validly issued
and are fully paid and nonassessable; and Borrower and each such Subsidiary owns
beneficially and of record all the shares and other interests it is listed as
owning in Schedule 8.4 hereto, free and clear of any Lien other then the Liens
created under the Loan Documents in favor of the Agent for the benefit of the
Lenders.
VIII.5. Ownership Interests. The Borrower owns no interest in any
Person other than the Persons listed in Schedule 8.4 hereto and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 9.21 hereof.
VIII.6. Financial Condition.
(a) The Borrower has heretofore furnished to the Agent
and each Lender audited consolidated and related consolidating balance
sheets of the Borrower and its
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Subsidiaries (including Borrower) as at December 31, 1997 and the notes
thereto and the related consolidated statements of income,
shareholders' equity and cash flows for the Fiscal Year then ended as
examined and certified by the Borrower's independent certified public
accountants. Except as set forth therein, such financial statements
(including the notes thereto) present fairly the financial condition of
the Borrower and its Subsidiaries as of the end of such Fiscal Year and
results of their operations and the changes in its shareholders' equity
for the Fiscal Year then ended, all in conformity with GAAP applied on
a Consistent Basis;
(b) since December 31, 1997, there has been no material
adverse change in the condition, financial or otherwise, of the
Borrower and its Subsidiaries or in the businesses, properties,
performance, prospects or operations of the Borrower or its
Subsidiaries, nor have such businesses or properties been materially
adversely affected as a result of any fire, explosion, earthquake,
accident, strike, lockout, combination of workers, flood, embargo or
act of God; and
(c) the consolidated balance sheets of each of the
Borrower and its Subsidiaries and HPG that are attached hereto as
Schedule 8.6(c) hereto fairly present the consolidated financial
position of the Borrower and its Subsidiaries and HPG as of the dates
set forth therein, in each case in accordance with GAAP applied on a
Consistent Basis (except as otherwise specifically indicated therein).
The consolidated statements of income and cash flows of the Borrower
and its Subsidiaries and HPG that are attached hereto as Schedule
8.6(c) have been prepared in conformity with GAAP applied on a
Consistent Basis through all the periods involved (except as otherwise
specifically indicated therein) and fairly present the consolidated
results of operations of each of the Borrower and its Subsidiaries and
HPG for the periods indicated. The pro forma consolidated statements of
income and cash flows included in Schedule 8.6(c) hereto fairly present
the estimated consolidated income and cash flows of the Borrower and
its Subsidiaries assuming the consummation of the HPG Acquisition as if
it had occurred on the date set forth therein, and the pro forma
consolidated balance sheet of the Borrower included in Schedule 8.6(c)
hereto fairly presents the consolidated financial condition of the
Borrower and its Subsidiaries on the Closing Date (after giving effect
to all simultaneous transactions to occur on such date).
(d) except as set forth in the financial statements
referred to in Section 8.6(a) hereof or as set forth in Schedule 8.6(d)
hereto, neither the Borrower nor any Subsidiary has incurred, other
than in the ordinary course of business, any material Indebtedness,
Contingent Obligation or other commitment or liability which remains
outstanding or unsatisfied.
VIII.7. Title to Properties. The Borrower and each of its Subsidiaries
has good and marketable title to all its real and personal properties, subject
to no transfer restrictions or Liens of any kind, except for the transfer
restrictions and Liens described in Schedule 8.7 hereto.
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VIII.8. Taxes. The Borrower and each of its Subsidiaries have filed or
caused to be filed all federal, state and local tax returns which are required
to be filed by it and, except for taxes and assessments being contested in good
faith by appropriate proceedings diligently conducted and against which reserves
reflected in the financial statements described in Section 8.6(a) hereof and
satisfactory to the Borrower's independent certified public accountants have
been established, have paid or caused to be paid all taxes as shown on said
returns or on any assessment received by it, to the extent that such taxes have
become due.
VIII.9. Other Agreements. Neither the Borrower nor any Subsidiary is:
(a) a party to or subject to any judgment, order, decree,
agreement, lease or instrument, or subject to other restrictions, which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect; or
(b) in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which the Borrower or any
Subsidiary is a party, which default has, or if not remedied within any
applicable grace period could reasonably be likely to have, a Material
Adverse Effect.
VIII.10. Litigation. Except as set forth in Schedule 8.10
hereto, there is no action, suit, investigation or proceeding at law or in
equity or by or before any governmental instrumentality or agency or arbitral
body pending, or, to the knowledge of the Borrower, threatened by or against the
Borrower, or any of its Subsidiaries or affecting the Borrower or any of its
Subsidiaries or any properties or rights of the Borrower or any of its
Subsidiaries, which could reasonably be expected to have a Material Adverse
Effect.
VIII.11. Margin Stock. The proceeds of the borrowings made
hereunder will be used by the Borrower only for the purposes expressly
authorized herein. None of such proceeds will be used, directly or indirectly,
for the purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry margin stock or for any other purpose which might constitute any of the
Loans under this Agreement a "purpose credit" within the meaning of said
Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither the
Borrower nor any agent acting in its behalf has taken or will take any action
which might cause this Agreement or any of the documents or instruments
delivered pursuant hereto to violate any regulation of the Board or to violate
the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933,
as amended, or any state securities laws, in each case as in effect on the date
hereof.
VIII.12. Investment Company. Neither the Borrower nor any of
its Subsidiaries is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C.
Section 80a-1, et seq.). The application of the proceeds of the Loans and
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repayment thereof by the Borrower and the performance by the Borrower and the
other Credit Parties of the transactions contemplated by the Loan Documents will
not violate any provision of said Act, or any rule, regulation or order issued
by the Securities and Exchange Commission thereunder, in each case as in effect
on the date hereof.
VIII.13. Intellectual Property. The Borrower and its
Subsidiaries own or have the right to use under valid license agreements or
otherwise, all licenses, franchises, patents, trademarks, trademark rights,
trade names, trade name rights, trade secrets and copyrights, and all
applications for any of the foregoing, material to the conduct of their
businesses as now conducted (the "Intellectual Property"), all such Intellectual
Property being identified on the schedules to the Intellectual Property Security
Agreement and, except as set forth on Schedule 8.13 hereto, without conflict
with any patent, license, franchise, trademark, trade secrets and confidential
commercial or proprietary information, trade name, copyright, rights to trade
secrets or other proprietary rights of any other Person. Each Credit Party
owning any Collateral as defined in the Intellectual Property Security Agreement
is a party to the Intellectual Property Security Agreement.
VIII.14. No Untrue Statement. Neither (a) this Agreement nor
any other Loan Document or certificate or document executed and delivered by or
on behalf of the Borrower or any other Credit Party in accordance with or
pursuant to any Loan Document nor (b) any statement, representation, or warranty
provided to the Agent in connection with the negotiation or preparation of the
Loan Documents contains any misrepresentation or untrue statement of material
fact or omits to state a material fact necessary, in light of the circumstance
under which it was made, in order to make any such warranty, representation or
statement contained therein not misleading.
VIII.15. No Consents, Etc. Neither the respective businesses
or properties of the Borrower or any of its Subsidiaries, nor any relationship
between the Borrower or any of its Subsidiaries and any other Person, nor any
circumstance in connection with the execution, delivery and performance of the
Loan Documents and the transactions contemplated thereby, is such as to require
a consent, approval or authorization of, or filing, registration or
qualification with, any Governmental Authority or any other Person on the part
of the Borrower or any of its Subsidiaries as a condition to the execution,
delivery and performance of, or consummation of the transactions contemplated by
the Loan Documents, which, if not obtained or effected, would be reasonably
likely to have a Material Adverse Effect, or if so, such consent, approval,
authorization, filing, registration or qualification has been duly obtained or
effected, as the case may be.
VIII.16. Employee Benefit Plans.
(a) The Borrower and each ERISA Affiliate is in
compliance with all applicable provisions of ERISA and the regulations
and published interpretations thereunder and in compliance with all
Foreign Benefit Laws with respect to all Employee
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Benefit Plans except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet
expired. Each Employee Benefit Plan that is intended to be qualified
under Section 401(a) of the Code has been determined by the Internal
Revenue Service to be so qualified, each trust related to such plan has
been determined to be exempt under Section 501(a) of the Code and each
Employee Benefit Plan subject to any Foreign Benefit Law has received
the required approvals from any Governmental Authority regulating such
Employee Benefit Plan. No material liability has been incurred by the
Borrower or any ERISA Affiliate which remains unsatisfied for any taxes
or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan;
(b) Neither the Borrower nor any ERISA Affiliate has (i)
engaged in a nonexempt prohibited transaction described in Section 4975
of the Code or Section 406 of ERISA affecting any of the Employee
Benefit Plans or the trusts created thereunder which could subject any
such Employee Benefit Plan or trust to a material tax or penalty on
prohibited transactions imposed under Internal Revenue Code Section
4975 or ERISA, (ii) incurred any accumulated funding deficiency with
respect to any Employee Benefit Plan, whether or not waived, or any
other liability to the PBGC which remains outstanding other than the
payment of premiums and there are no premium payments which are due and
unpaid, (iii) failed to make a required contribution or payment to a
Multiemployer Plan, (iv) failed to make a required installment or other
required payment under Section 412 of the Code, Section 302 of ERISA or
the terms of such Employee Benefit Plan or (v) failed to make a
required contribution or payment, or otherwise failed to operate in
compliance with any Foreign Benefit Law regulating any Employee Benefit
Plan;
(c) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan, and neither the Borrower nor any ERISA Affiliate has incurred any
unpaid withdrawal liability with respect to any Multiemployer Plan;
(d) The present value of all vested accrued benefits
under each Employee Benefit Plan which is subject to Title IV of ERISA
or whose funding is regulated by any Foreign Benefit Law, did not, as
of the most recent valuation date for each such plan, exceed the then
current value of the assets of such Employee Benefit Plan allocable to
such benefits;
(e) To the best of the Borrower's knowledge, each
Employee Benefit Plan subject to Title IV of ERISA or the funding of
which is regulated by any Foreign Benefit Law, maintained by the
Borrower or any ERISA Affiliate, has been administered in accordance
with its terms in all material respects and is in compliance in all
material respects with all applicable requirements of ERISA, all
Foreign Benefit Laws and other applicable laws, regulations and rules;
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(f) The consummation of the Loans and the issuance of the
Letters of Credit provided for herein will not involve any prohibited
transaction under ERISA which is not subject to a statutory or
administrative exemption; and
(g) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of the Borrower after
due inquiry, is threatened concerning or involving any Employee Benefit
Plan.
VIII.17. No Default. As of the date hereof, there does not
exist any Default or Event of Default hereunder.
VIII.18. Hazardous Materials.
(a) The Borrower and each of its Subsidiaries is in
compliance with all applicable Environmental Laws in all material
respects, and has been issued and maintains all required federal, state
and local permits, licenses, certificates and approvals pertaining to
Hazardous Materials that are germane to the conduct of its business.
Neither the Borrower nor any of its Subsidiaries has been notified of
any pending or threatened action, suit, proceeding or investigation
which, and neither the Borrower nor any of its Subsidiaries is aware of
any facts, which (i) calls into question, or could reasonably be
expected to call into question, compliance by the Borrower or any of
its Subsidiaries with any Environmental Laws, (ii) seeks, or could
reasonably be expected to form the basis of a meritorious proceeding to
seek, to suspend, revoke or terminate any license, permit,
certification or approval pertaining to Hazardous Material that is
germane to the conduct of its business, or (iii) seeks to cause, or
could reasonably be expected to form the basis of a meritorious
proceeding to cause, any property of the Borrower or any of its
Subsidiaries to be subject to any restrictions on ownership, use,
occupancy or transferability under any Environmental Law;
(b) Neither the Borrower nor any of its Subsidiaries,
nor, to the best of Borrower's knowledge, any previous owner or
operator of any real property owned or operated by the Borrower or any
of its Subsidiaries or any other Person, has managed, generated,
stored, released, treated, or disposed of any Hazardous Material on any
portion of such property, or transferred or caused to be transferred
any Hazardous Material from such property to any other location except
in compliance with all Environmental Laws. Except for Hazardous
Materials necessary for the routine maintenance of the Properties owned
or operated by the Borrower and its Subsidiaries and as used in the
ordinary course of the Borrower's or its Subsidiaries' business, which
Hazardous Material shall be used in accordance with all applicable
Environmental Laws, the Borrower covenants it shall, and shall cause
each of its Subsidiaries to, not permit any Hazardous Materials to be
brought on to the real property owned or operated by the Borrower and
its Subsidiaries, or if so brought or found located thereon, shall be
immediately removed,
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with proper disposal, and all environmental cleanup requirements shall
be diligently undertaken pursuant to all Environmental Laws.
VIII.19. Employment Matters.
(a) Except with respect to employees located in Mexico,
none of the employees of the Borrower or any of its Subsidiaries is
subject to any collective bargaining agreement and there are no
strikes, work stoppages, election or decertification petitions or
proceedings, unfair labor charges, equal opportunity proceedings, or
other material labor/employee related controversies or proceedings
pending or, to the best knowledge of the Borrower, threatened against
the Borrower or any such Subsidiary or between the Borrower or any such
Subsidiary and any of their employees, other than employee grievances
arising in the ordinary course of business which could not reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect; and
(b) Except to the extent a failure to maintain compliance
would not have a Material Adverse Effect, the Borrower and each of its
Subsidiaries is in compliance in all respects with all applicable laws,
rules and regulations pertaining to labor or employment matters,
including without limitation those pertaining to wages, hours,
occupational safety and taxation and there is neither pending or
threatened any litigation, administrative proceeding nor, to the
knowledge of the Borrower, any investigation, in respect of such
matters which, if decided adversely, could reasonably be likely,
individually or in the aggregate, to have a Material Adverse Effect.
VIII.20. RICO Neither the Borrower nor any of its Subsidiaries
is engaged in or has engaged in any course of conduct that could subject any of
their respective properties to any Lien, seizure or other forfeiture under any
criminal law, racketeer influenced and corrupt organizations law, civil or
criminal, or other similar laws.
VIII.21. Year 2000 Compliance. The Borrower has (a) undertaken
a review and assessment of the business and operations of the Borrower and its
Subsidiaries with respect to becoming Year 2000 Compliant and the Borrower is
taking or causing to be taken or undertaking to commence all actions necessary
to become and continue to be Year 2000 Compliant prior to 90 days prior to year
2000, including taking all actions and at the times specified in the Year 2000
Compliance Plan, as adopted, and (b) undertaken a review and assessment of the
business and operations of each of its Related Business Parties with respect to
becoming Year 2000 Compliant and the Borrower reasonably believes that each
Related Business Party is taking or causing to be taken or undertaking to
commence all actions necessary to become and continue to be Year 2000 Compliant
prior to 90 days prior to year 2000; the Borrower reasonably believes each of
the Borrower and each Subsidiary will be Year 2000 Compliant prior to, on and
after 90 days prior to year 2000.
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VIII.22. Transaction Agreement Representations. To the best of
Borrower's knowledge, each of the representations and warranties of the Seller
contained in Exhibit B of the Transaction Agreement and each of the other
Transaction Documents are true and correct as of the Closing Date.
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ARTICLE IX
Affirmative Covenants
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and where applicable will
cause each Subsidiary to:
IX.1. Financial Reports, Etc.
(a) As soon as practical and in any event within 90 days
after the end of each Fiscal Year after the Closing Date, deliver or
cause to be delivered to the Agent and each Lender (i) the audited
consolidated and unaudited consolidating balance sheets of the
Borrower and its Subsidiaries, with the notes thereto, and the related
audited consolidated and unaudited consolidating statements of
earnings, cash flow, and shareholders' equity and the notes thereto,
for such Fiscal Year, setting forth in the case of the consolidated
statements comparative financial statements for the preceding Fiscal
Year, all prepared in accordance with GAAP applied on a Consistent
Basis and containing, with respect to the audited consolidated
financial reports, opinions of Xxxxx Xxxxxxxx LLP, or other such
independent certified public accountants selected by the Borrower and
approved by the Agent, which are unqualified and without an exception
not acceptable to the Agent; and (ii) a certificate of an Authorized
Representative as to the absence of any Default or Event of Default
and demonstrating compliance with Section 10.22 hereof, which
certificate shall be in the form attached hereto as Exhibit L and
incorporated herein by reference;
(b) as soon as practical and in any event within 45 days
after the end of each fiscal quarter beginning with the fiscal quarter
ended June 30, 1998, deliver to the Agent and each Lender (i) the
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such fiscal quarter, and the related
consolidated and consolidating statements of earnings and cash flow
for such fiscal quarter and for the period from the beginning of the
Fiscal Year through the end of such fiscal quarter, accompanied by a
certificate of an Authorized Representative to the effect that such
financial statements present fairly the financial position of the
Borrower and its Subsidiaries as of the end of such fiscal quarter and
the results of their operations and the changes in shareholders'
equity for such fiscal quarter, in conformity with the standards of
GAAP with respect to interim financials, and (ii) a certificate of an
Authorized Representative as to the absence of any Default or Event of
Default and containing computations for such quarter comparable to
that required pursuant to Section 9.1(a)(ii);
(c) together with delivery of the financial statements
required under Section 9.1(a) above, deliver or cause to be delivered
to the Agent and each Lender a letter from the Borrower's accountants
specified in Section 9.1(a)(i) hereof stating that, in performing the
audit necessary to render an opinion on the financial statements
delivered under Section 9.1(a)(i), they obtained no knowledge of any
Default or Event of Default
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by the Borrower in the fulfillment of the terms and provisions of this
Agreement insofar as they relate to financial matters (which at the
date of such statement remains uncured); and if the accountants have
obtained knowledge of such Default or Event of Default, a statement
specifying the nature and period of existence thereof;
(d) as soon as practical and in any event within 25 days
after the end of each month, deliver or cause to be delivered to the
Agent and each Lender (i) a summary and aging of Eligible Receivables
and (ii) a Borrowing Base Certificate in the form of Exhibit K hereto;
(e) not later than the last Business Day of each Fiscal
Year, deliver to the Agent and each Lender consolidated financial
projections for the Borrower and its Subsidiaries for the period from
the beginning of the next Fiscal Year to the Stated Maturity Date,
prepared on an annual basis;
(f) promptly upon their becoming available to the
Borrower, the Borrower shall deliver to the Agent and each Lender a
copy of (i) all regular or special reports or effective registration
statements which the Borrower or any Subsidiary shall file from and
after the date hereof with the Securities and Exchange Commission (or
any successor thereto) or any securities exchange, (ii) any proxy
statement distributed by the Borrower to its shareholders, bondholders
or the financial community in general, and (iii) any management letter
or other report submitted to the Borrower or any of its Subsidiaries
by independent accountants in connection with any annual, interim or
special audit of the Borrower or any of its Subsidiaries;
(g) together with each delivery of the financial
statements required by Section 9.1(a) or (b) hereof, deliver to the
Agent and each Lender a management letter or other report setting
forth any material deviation from the Year 2000 Compliance Plan and
any other event or condition which could reasonably be expected to
prevent or materially delay the Borrower, any Subsidiary or any
Related Business Party from becoming Year 2000 Compliant before 90
days prior to year 2000; and
(h) promptly, from time to time, deliver or cause to be
delivered to the Agent and each Lender such other information
regarding the Borrower's and any of its Subsidiaries' operations,
business affairs and financial condition as the Agent or such Lender
may reasonably request;
The Agent and the Lenders are hereby authorized to deliver a copy of
any such financial or other information delivered hereunder to the Lenders (or
any affiliate of any Lender) or to the Agent, to any Governmental Authority
having jurisdiction over the Agent or any of the Lenders pursuant to any
written request therefor or in the ordinary course of examination of loan
files, or, subject to Section 13.9 hereof, to any other Person who shall
acquire or consider the assignment of, or acquisition of any participation
interest in, any Obligation permitted by this Agreement.
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IX.2. Maintain Properties and Agreements. Maintain (a) all properties
necessary to their operations in good working order and condition, make all
needed repairs, replacements and renewals to such properties, and maintain free
from Liens all trademarks, trade names, patents, copyrights, trade secrets,
know-how, and other intellectual property and proprietary information (or
adequate licenses thereto), in each case as are reasonably necessary to conduct
their business as currently conducted or as contemplated hereby, all in
accordance with customary and prudent business practices and (b) all Material
Contracts and Material Leases in full force and effect without material
defaults thereunder.
IX.3. Existence, Qualification, Etc. Do or cause to be done all things
necessary to preserve and keep in full force and effect their existence and all
material rights and franchises, and maintain their licenses or qualifications
to do business as foreign corporations and good standing in each jurisdiction
in which their ownership or lease of property or the nature of their business
makes such license or qualification necessary except where the failure to so
qualify would not have a Material Adverse Effect.
IX.4. Regulations and Taxes. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of their
properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves acceptable
to the Borrower's independent certified public accountants determined on a
consolidated basis have been established unless and until any Lien resulting
therefrom attaches to any of their property and becomes enforceable against any
of their creditors.
IX.5. Insurance. (a) Keep all of their insurable properties adequately
insured at all times with responsible insurance carriers against loss or damage
by fire and other hazards to the extent and in the manner as are customarily
insured against by similar businesses owning such properties similarly
situated, (b) maintain general public liability insurance at all times with
responsible insurance carriers against liability on account of damage to
persons and property and (c) maintain insurance under all applicable workers'
compensation laws (or in the alternative, maintain required reserves if
self-insured for workers' compensation purposes) such policies of insurance to
have such limits, deductibles, exclusions, co-insurance and other provisions
providing no less coverages than are maintained by similar businesses that are
similarly situated, in any manner. such insurance policies to be in form
reasonably satisfactory to the Agent. Each of the policies of insurance
described in this Section 9.5 hereof shall provide that the Agent shall be
named as loss payee or additional insured, as applicable, and that the insurer
shall give the Agent not less than thirty (30) days' prior written notice
before any such policy shall be terminated, lapse or be altered
IX.6. True Books. Keep true books of record and account in which full,
true and correct entries will be made of all of their dealings and
transactions, and set up on their books such reserves as may be required by
GAAP with respect to doubtful accounts and all taxes,
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assessments, charges, levies and claims and with respect to its business in
general, and include such reserves in interim as well as year-end financial
statements.
IX.7. Right of Inspection. Permit any Person designated by any Lender
or the Agent to visit and inspect any of the properties, corporate books and
financial reports of the Borrower or any of its Subsidiaries and to discuss
their affairs, finances and accounts with their principal officers and
independent certified public accountants, all at reasonable times, at
reasonable intervals and with reasonable prior notice.
IX.8. Observe all Laws. Conform to and duly observe in all respects
all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of their business where the
failure to observe such laws, rules, regulations or other requirements could
have a Material Adverse Effect.
IX.9. Covenants Extending to Other Persons. Cause each of its
Subsidiaries to do with respect to itself, its business and its assets, each of
the things required of the Borrower in Sections 9.2 through 9.8 inclusive.
IX.10. Officer's Knowledge of Default. Upon any officer of the
Borrower obtaining knowledge of any Default or Event of Default hereunder or
under any other obligation of the Borrower or any of its Subsidiaries to any
Lender, or any event, development or occurrence which could reasonably be
expected to have a Material Adverse Effect, cause such officer or an Authorized
Representative to promptly notify the Agent of the nature thereof, the period
of existence thereof, and what action the Borrower or such Subsidiary proposes
to take with respect thereto.
IX.11. Suits or Other Proceedings. Upon any officer of the Borrower
obtaining knowledge of (a) any action or proceeding against the Borrower or any
Subsidiary by any Governmental Authority the outcome of which could reasonably
be expected to have a Material Adverse Effect or (b) any litigation or other
proceedings being instituted against the Borrower or any Subsidiary, or any
attachment, levy, execution or other process being instituted against any
assets of the Borrower or any Subsidiary, in an aggregate amount in respect of
all such proceedings and processes greater than $1,000,000 not otherwise
covered by insurance, in each case promptly deliver to the Agent written notice
thereof stating the nature and status of such litigation, dispute, proceeding,
levy, execution or other process.
IX.12. Notice of Discharge of Hazardous Material or Environmental
Complaint. Promptly provide to the Agent true, accurate and complete copies of
any and all letters, notices, complaints, orders, directives, claims, or
citations received by the Borrower or any Subsidiary relating to any (a)
violation or alleged violation by the Borrower or any Subsidiary of any
applicable Environmental Laws; (b) release or threatened release into the
environment by the Borrower or any Subsidiary, or by any Person handling,
transporting or disposing of any Hazardous Material on behalf of the Borrower
or any Subsidiary, or at any facility or property
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owned or leased or operated by the Borrower or a Subsidiary, of any Hazardous
Material, except where occurring legally; or (c) liability or alleged liability
of the Borrower or any Subsidiary for the costs of cleaning up, removing,
remediating or responding to a release of Hazardous Materials.
IX.13. Environmental Compliance. If the Borrower or any Subsidiary
shall receive any letter, notice, complaint, order, directive, claim or
citation alleging that the Borrower or any Subsidiary has violated any
Environmental Law or is liable for the costs of cleaning up, removing,
remediating or responding to a release of Hazardous Materials, the Borrower
shall, within the time period permitted and to the extent required by the
applicable Environmental Law or the Governmental Authority responsible for
enforcing such Environmental Law, remove or remedy, or cause the applicable
Subsidiary to remove or remedy, such violation or release or satisfy such
liability unless, and only during the period that, the applicability of the
Environmental Law, the fact of such violation or liability or what is required
to remove or remedy such violation is being contested by the Borrower or the
applicable Subsidiary by appropriate proceedings diligently conducted and all
reserves with respect thereto as may be required under GAAP, if any, have been
made.
IX.14. Indemnification. The Borrower hereby agrees to defend,
indemnify and hold the Agent and the Lenders, and their respective officers,
directors, employees and agents, harmless from and against any and all claims,
losses, penalties, liabilities, damages and expenses (including, without
limitation, assessment and cleanup costs and reasonable attorneys',
consultants' and other experts' fees and disbursements) arising directly or
indirectly from, out of or by reason of (a) the violation of any Environmental
Law by the Borrower or any Subsidiary or with respect to any property owned,
operated or leased by the Borrower or any Subsidiary or (b) the handling,
storage, treatment, emission or disposal of any Hazardous Material by or on
behalf of the Borrower or any Subsidiary on or with respect to property owned
or leased or operated by the Borrower or any Subsidiary. The provisions of this
Section 9.14 shall survive repayment of the Obligations, the occurrence of the
Facility Termination Date and expiration or termination of this Agreement.
IX.15. Further Assurances. At the Borrower's cost and expense upon
request of the Agent, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents, certificates,
agreements, financing and continuation statements, and do and cause to be done
such further acts that may be reasonably necessary or advisable in the
reasonable opinion of the Agent to carry out more effectively the provisions
and purposes of this Agreement and the other Loan Documents.
IX.16. Employee Benefit Plans. With reasonable promptness, and in any
event within thirty (30) days, the Borrower will give notice of and/or deliver
to Agent copies of (a) the establishment of any new Employee Benefit Plan, (b)
the commencement of contributions to any Pension Plan or Multiemployer Plan to
which the Borrower or any of its ERISA Affiliates was not previously
contributing, (c) any material increase in the benefits of any existing
Employee
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Benefit Plan, (d) each funding waiver request filed with respect to any Pension
Plan and all communications received or sent by the Borrower or any ERISA
Affiliate with respect to such request and (e) the failure of the Borrower or
any ERISA Affiliate to make a required installment or payment under Section 302
of ERISA or Section 412 of the Code or any Foreign Benefit Law (in the case of
an Employee Benefit Plan regulated by any Foreign Benefit Law) by the due date.
IX.17. Termination Events. Promptly and in any event within ten (10)
days of becoming aware of the occurrence of or forthcoming occurrence of any
(a) Termination Event or (b) "prohibited transaction," as such term is defined
in Section 406 of ERISA or Section 4975 of the Code, in connection with any
Pension Plan or any trust created thereunder, the Borrower will deliver to
Agent a notice specifying the nature thereof, what action the Borrower has
taken, is taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto.
IX.18. ERISA Notices. With reasonable promptness but in any event
within ten (10) days for purposes of clauses (a), (b) and (c), the Borrower
will deliver to the Agent copies of (a) any favorable or unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of an Employee Benefit Plan under Section 401(a) of the Code, (b)
all notices received by the Borrower or any ERISA Affiliate of the PBGC's or
any Governmental Authority's intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, (c) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by the
Borrower or any ERISA Affiliate with the Internal Revenue Service with respect
to each Pension Plan and (d) all notices received by the Borrower or any ERISA
Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount
of withdrawal liability pursuant to Section 4202 of ERISA. The Borrower will
notify the Agent in writing within ten (10) Business Days of the Borrower
obtaining knowledge or reason to know that the Borrower or any ERISA Affiliate
has filed or intends to file a notice of intent to terminate any Pension Plan
under a distress termination within the meaning of Section 4041(c) of ERISA.
IX.19. Continued Operations. Continue at all times (a) to conduct its
business and engage principally in the Core Business and (b) to preserve,
protect and maintain free from Liens (other than Permitted Liens) its
Intellectual Property.
IX.20. Use of Proceeds. Use the proceeds of the Loans solely for the
purposes specified in Sections 2.11 or 3.12 hereof.
IX.21. New Subsidiaries; Minority Interests.
(a) In the event of the acquisition or creation of any
Subsidiary or Control Subsidiary (a "New Subsidiary"), cause to be
delivered to the Agent for the benefit of the Lenders a Stock Pledge
Agreement with respect to the Pledged Stock of such New Subsidiary
substantially in the form of Exhibit G hereto within thirty (30)
Business Days of the acquisition or creation of a Subsidiary;
provided, however, that if such New
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Subsidiary is a Foreign Subsidiary, such pledge of capital stock shall
be limited to 65% of the outstanding voting stock of such New
Subsidiary and shall only be required if it is a Direct Foreign
Subsidiary or a Direct Foreign Control Subsidiary;
(b) In the event of the acquisition or creation of any
Domestic Subsidiary, cause to be delivered to the Agent for the
benefit of the Lenders each of the following indicated to be delivered
by such Subsidiary within thirty (30) Business Days of the acquisition
or creation of such Subsidiary:
(i) a Guaranty executed by such Subsidiary,
substantially in the form of Exhibit J hereto;
(ii) a Security Agreement executed by such
Subsidiary, substantially in the form of Exhibit H hereto;
(iii) if such Subsidiary has any material leased
locations, a Landlord Waiver in the form of Exhibit M hereto;
(iv) if such Subsidiary owns any real property, a
Mortgage executed by such Subsidiary, substantially in the
form of Exhibit O hereto;
(v) if such Subsidiary owns any Intellectual
Property, an Intellectual Property Security Agreement,
executed by such Subsidiary, substantially in the form of
Exhibit I hereto;
(c) In the event of the acquisition or creation of any
Subsidiary subject to the provisions of clauses (a) or (b) above,
cause to be delivered to the Agent for the benefit of the Lenders each
of the following within the time periods indicated therein:
(i) an opinion of counsel to such Subsidiary
dated as of the date of delivery of the other documents
required to be delivered pursuant to this Section 9.21 and
addressed to the Agent and the Lenders, in form and substance
identical to the opinion of counsel delivered pursuant to
Section 7.1 hereof on the Closing Date with respect to any
Guarantor and the Pledged Stock; and
(ii) current copies of the Organizational
Documents and Operating Documents of such Subsidiary, minutes
of duly called and conducted meetings (or duly effected
consent actions) of the Board of Directors, or appropriate
committees thereof (and, if required by such Organizational
Documents or Operating Documents or by applicable laws, of
the shareholders), of such Subsidiary authorizing the actions
and the execution and delivery and performance of such
Guaranty, Security Agreement, Stock Pledge Agreement,
Intellectual Property Security Agreement or other agreement
required under this
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Section 9.21 and evidence satisfactory to the Agent
(confirmation of the receipt of which will be provided by the
Agent to the Lenders) that such Subsidiary is Solvent as of
such date after giving effect to such Guaranty, Security
Agreement, Stock Pledge Agreement, and, if applicable,
Intellectual Property Security Agreement.
(d) In the event (i) the Borrower or any Domestic
Subsidiary creates or acquires any material minority investment in any
Person or (ii) the Borrower owns any Salton/Maxim Shares after July
31, 1999, cause to be delivered to the Agent for the benefit of the
Lenders (A) a Stock Pledge Agreement with respect to the equity
interests (or the Salton/Maxim Shares, as applicable) of such Person
owned by the Borrower or such Domestic Subsidiary (subject to the 65%
limitation on pledging shares of Foreign Subsidiaries contained
herein) substantially in the form of Exhibit G hereto and (B) an
opinion of counsel dated as of the date of delivery of the other
documents required to be delivered pursuant to this Section 9.21 and
addressed to the Agent and the Lenders, in form and substance
identical to the opinion of counsel delivered pursuant to Section 7.1
hereof on the Closing Date with respect to the Pledged Stock, all
within thirty (30) Business Days of the acquisition or creation of
such investment.
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ARTICLE X
Negative Covenants
Until the occurrence of the Facility Termination Date, unless the
Required Lenders shall otherwise consent in writing, the Borrower will not, nor
will it permit any Subsidiary to:
X.1. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness of the Borrower and its Subsidiaries determined on a consolidated
basis, howsoever evidenced, except the following (collectively, the "Permitted
Indebtedness"):
(a) Indebtedness set forth in Schedule 8.6 hereto and
incorporated herein by reference and any extension, renewal or
refinancing thereof that does not increase the principal amount
thereof or the interest rate payable thereon from that existing
immediately prior to such extension, renewal or refinancing; provided,
none of the instruments and agreements evidencing or governing such
Indebtedness shall be amended, modified or supplemented after the
Closing Date to change any terms of subordination, repayment or rights
of conversion, put, exchange or other rights from such terms and
rights as in effect on the Closing Date;
(b) Indebtedness owing to the Agent or any Lender in
connection with this Agreement, any Note or other Loan Document;
(c) Indebtedness evidenced by the Subordinated Notes;
(d) Indebtedness consisting of Hedging Obligations not
prohibited under Section 10.9 hereof;
(e) the endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of
business;
(f) (i) purchase money Indebtedness and (ii) Indebtedness
incurred with respect to financing of Capital Expenditures,
collectively under both clause (i) and (ii) not to exceed an aggregate
outstanding amount at any time of $5,000,000;
(g) Indebtedness of any Guarantor owing to the Borrower or
another Guarantor and Indebtedness of the Borrower owing to any
Guarantor;
(h) Indebtedness consisting of guaranties by the Borrower
of Indebtedness permitted under Section 10.1(i) below;
(i) additional Indebtedness incurred by any Foreign
Subsidiary in an aggregate outstanding principal amount at any time
not to exceed the difference of (A)
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$80,000,000 less (B) the amount of any investments permitted under
Section 10.3(f) hereof.
X.2. Liens. Incur, create or permit to exist any pledge, Lien,
charge or other encumbrance of any nature whatsoever with respect to any
property or assets now owned or hereafter acquired by the Borrower or any of
its Subsidiaries, including without limitation any capital stock of the
Borrower or any of its Subsidiaries, other than any of the following
(collectively, the "Permitted Liens"):
(a) Liens existing as of the date hereof and as set forth
in Schedule 8.7 attached hereto, provided, however, that any such Lien
that is released after the date hereof may not thereafter re-attach or
otherwise become permitted by this Section 10.2(a);
(b) Liens imposed by law for taxes, assessments or charges
of any Governmental Authority for claims not yet due or which are
being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP;
(c) Liens in respect of purchase money Indebtedness
permitted to be incurred pursuant to Section 10.1(f)(i) hereof in
connection with the acquisition of certain tangible property; provided
that (a) the original principal balance of the Indebtedness secured by
such Lien constitutes not less than 80% nor more than 100% of the
purchase price of the property acquired and (B) such Lien extends only
to the property acquired with the proceeds of the Indebtedness so
secured;
(d) statutory Liens of landlords who are not subject to a
Landlord Waiver and Liens of carriers, warehousemen, mechanics,
materialmen and other Liens imposed by law or created in the ordinary
course of business and in existence less than 90 days from the date of
creation thereof for amounts not yet due or which are being contested
in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP;
(e) Liens incurred or deposits made in the ordinary course
of business (including, without limitation, surety bonds and appeal
bonds) in connection with workers' compensation, unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, leases, contracts (other than for the
repayment of Indebtedness), statutory obligations and other similar
obligations or arising as a result of progress payments under
government contracts;
(f) easements (including, without limitation, reciprocal
easement agreements and utility agreements), rights-of-way, covenants,
consents, reservations, encroachments, variations and zoning and other
restrictions, charges or encumbrances (whether or not
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recorded), which do not interfere with the ordinary conduct of the
business of the Borrower or any Subsidiary and do not impair the use
of the property to which they attach to the extent that such
interference or impairment would reasonably be expected to have a
Material Adverse Effect; and
(g) Liens on real property securing Indebtedness permitted
under Section 10.1(a), (b), (f) or (i) hereof (subject to compliance
with subsection (c) above in connection with purchase money
Indebtedness).
X.3. Investments; Acquisitions. Make any Acquisition or otherwise
purchase, own, invest in or otherwise acquire, directly or indirectly, any
stock or other securities, or make or permit to exist any interest whatsoever
in any other Person or permit to exist any loans or advances to any Person,
except that Borrower and its Subsidiaries may:
(a) invest in Eligible Securities;
(b) maintain investments, loans and advances existing as
of the date hereof and as set forth in Schedule 8.4 hereto;
(c) accept and maintain accounts receivable arising and
trade credit granted in the ordinary course of business and retain any
securities received in satisfaction or partial satisfaction thereof in
connection with accounts of financially troubled Persons to the extent
reasonably necessary in order to prevent or limit loss;
(d) make and maintain loans and advances to and
investments in Subsidiaries which are Guarantors;
(e) consummate Permitted Acquisitions and mergers
permitted under Section 10.4(a) hereof;
(f) make and maintain loans, advances and investments in
Foreign Subsidiaries in an aggregate principal amount at any time
outstanding not to exceed $40,000,000.
(g) make and maintain other loans, advances and
investments in an aggregate principal amount at any time outstanding
not to exceed $10,000,000.
X.4. Merger or Transfer of Assets.
(a) Consolidate with or merge into any other Person, or
permit any other Person to merge into it; provided, however, (i) any
Subsidiary may merge or transfer all or any part of its assets into or
consolidate with the Borrower or any Domestic Subsidiary, in each
case, provided the requirements of Article VI and Section 9.21 hereof
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are complied with as of the effective date of the consummation of such
merger, (ii) any Subsidiary may merge into another Person that is not
a Subsidiary prior to such merger whereby such other Person is the
surviving corporation provided the requirements of Article VI and
Section 9.21 hereof are complied with and such other Person becomes a
Subsidiary as of the effective date of the consummation of such merger
and that such merger would be a Permitted Acquisition but for the
Subsidiary not being the surviving corporation, (iii) any Direct
Foreign Subsidiary may merge with or into any other Direct Foreign
Subsidiary provided the requirements of Article VI and Section 9.21
hereof are complied with as of the effective date of the consummation
of such merger, (iv) any Foreign Subsidiary which is not a Direct
Foreign Subsidiary may merge with or into any other Foreign Subsidiary
provided the requirements of Article VI and Section 9.21 hereof are
complied with as of the effective date of the consummation of such
merger and (v) the Borrower or any Subsidiary may make a Permitted
Acquisition.
(b) Sell, lease, transfer or otherwise dispose of any
assets other than (i) dispositions of inventory in the ordinary course
of business, (ii) dispositions of equipment which, in the aggregate
during any Fiscal Year, have a fair market value or book value,
whichever is less, of not more than three percent (3%) of Property,
Plant and Equipment and Capitalized Software as shown on the
consolidated balance sheet of the Borrower and its Subsidiaries
adjusted to provide for the HPG Acquisition which is not replaced by
equipment having at least equivalent value, (iii) dispositions of
equipment which is replaced with equipment of like kind, function and
value, provided the replacement equipment shall be acquired prior to
or substantially contemporaneously with any disposition of the
Equipment that is to be replaced, and the replacement equipment shall
be free and clear of Liens other than Permitted Liens, (iv)
dispositions of other assets which, in the aggregate during any Fiscal
Year, have a fair market value or book value, whichever is less, of
not more than one percent (1%) of Consolidated Shareholders' equity of
Borrower and its Subsidiaries adjusted to provide for the HPG
Acquisition and (v) any Equity Offering of authorized but unissued
equity securities the Net Proceeds of which are subject to the terms
of Section 2.6(b) hereof except as otherwise provided therein.
X.5. Transactions with Affiliates. Other than transactions
permitted under Sections 10.3 and 10.4 hereof, enter into any transaction after
the Closing Date, including, without limitation, the purchase, sale, lease or
exchange of property, real or personal, or the rendering of any service, with
any Affiliate of the Borrower, except (a) that such Persons may render services
or sell inventory to the Borrower or its Subsidiaries for compensation at the
same rates generally paid by Persons engaged in the same or similar businesses
for the same or similar services, (b) that the Borrower or any Subsidiary may
render services or sell inventory to such Persons for compensation at the same
rates generally charged by the Borrower or such Subsidiary and (c) in the
ordinary course of and pursuant to the reasonable requirements of the
Borrower's (or any Subsidiary's) business consistent with past practice of the
Borrower and its Subsidiaries and upon fair and reasonable terms no less
favorable to the Borrower (or any Subsidiary) than would
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be obtained in a comparable arm's-length transaction with a Person not an
Affiliate.
X.6. Compliance with ERISA. With respect to any Pension Plan, Employee
Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which would
result in a liability to the Borrower or any ERISA Affiliate in excess
of $500,000;
(b) permit the present value of all benefit liabilities under
all Pension Plans (except as provided below) to exceed the current
value of the assets of such Pension Plans allocable to such benefit
liabilities (the "Excess Liabilities Value") by more than $500,000;
(c) permit any accumulated funding deficiency in excess of
$500,000 (as defined in Section 302 of ERISA and Section 412 of the
Code) with respect to any Pension Plan, whether or not waived;
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto which results in or is likely to
result in a liability in excess of $500,000; or
(e) engage, or permit any Borrower or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to Section
502(i) of ERISA or a tax pursuant to Section 4975 of the Code may be
imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrower or any ERISA Affiliate or increase the
obligation of the Borrower or any ERISA Affiliate to a Multiemployer
Plan which liability or increase, individually or together with all
similar liabilities and increases, is in excess of $500,000; or
(g) fail, or permit the Borrower or any ERISA Affiliate to
fail, to establish, maintain and operate each Employee Benefit Plan in
compliance in all material respects with the provisions of ERISA, the
Code, all applicable Foreign Benefit Law and all other applicable laws
and the regulations and interpretations thereof.
X.7. Fiscal Year. Change the Borrower's Fiscal Year.
X.8. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily
or involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution,
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except in connection with the merger or consolidation of Subsidiaries into each
other or into a Borrower permitted pursuant to Section 10.4 hereof.
X.9. Hedging Obligations. Incur any Hedging Obligations or enter into
any agreements, arrangements, devices or instruments relating to Hedging
Obligations, except for Hedging Obligations entered into in the ordinary course
of business which are not for speculative or investment purposes.
X.10. Dividends, Redemptions and Other Payments. (a) Declare or pay
any cash dividends or make any other payment or distribution on account of its
capital stock (other than dividends payable in the ordinary course of business
solely in Common Stock) on any shares of stock of any class of the Borrower, now
or hereafter outstanding, or (b) purchase, redeem (whether mandatory or optional
redemption) or otherwise retire any such shares or interests in consideration of
cash or any debt instrument (whether or not subordinated) or shares of capital
stock issued by any Subsidiary of the Borrower, or apply or set apart any of
their assets therefor or make any other distribution (by redemption of capital
or otherwise) in respect of any such shares, or agree to do any of the
foregoing, other than (i) dividends payable by any Subsidiary to another
Subsidiary or to the Borrower and (ii) the purchase or redemption of capital
stock of employees pursuant to an Approved Stock Option Plan so long as (A) the
aggregate amount paid in connection with such purchase or redemption during any
twelve month period does not exceed $500,000 and (B) no Default or an Event of
Default exist after giving effect to such purchase or redemption.
X.11. Subordinated Debt.
(a) Pay or prepay, or set aside any cash or other assets to
pay or prepay, (i) all or any part of the principal amount owing with
respect of the Subordinated Bridge Debt or the Permanent Subordinated
Notes or (ii) any interest, premium or other amounts in respect to the
Subordinated Bridge Debt or the Permanent Subordinated Notes other than
in accordance with the terms of the Bridge Loan Agreement and the
Indenture; provided, however, that the Subordinated Bridge Debt may be
refinanced and replaced by the Permanent Subordinated Notes in
connection with the consummation of the Permanent Junior Financing.
(b) Materially amend the provisions of or terminate (other
than in connection with the full and final payment of the Subordinated
Bridge Debt or the Permanent Subordinated Notes) the Bridge Loan
Documents or the Permanent Junior Financing Documents without the prior
written consent of the Required Lenders.
X.12. Defaults Under Other Agreements. Permit any landlord,
mortgagee, trustee under deed of trust or lienholder to lawfully declare a
default under any lease, mortgage, deed of trust or lien instrument on real
estate owned or leased by the Borrower or any Guarantor or permit any landlord
to lawfully terminate, prior to the expiration of its term, any leasehold
interest of the
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Borrower or any Guarantor, if such default or termination, individually or
collectively, would reasonably be expected to result in a Material Adverse
Effect.
X.13. Compensation; Reimbursement of Expenses.
(a) Pay any salary, fees, and other direct and indirect
remuneration and compensation to any of its directors and executive
officers in an amount in excess of those amounts paid to directors and
executive officers of comparable companies engaged in the same general
type of business and in similar financial condition.
(b) Reimburse any stockholder, officer, director, employee or
agent of the Borrower or any Guarantor for any expenses incurred by
such Person other than reasonable expenses incurred for or on behalf of
the Borrower or any Guarantor in the ordinary course of business.
X.14. Change in Accountants. Change its independent public
accountants to any Person other than Xxxxx Xxxxxxxx LLP, Price Waterhouse,
L.L.P., Deloitte & Touche, L.L.P., KPMG Peat Marwick, L.L.P., Xxxxxx Xxxxxxxx &
Co., L.L.P., Coopers & Xxxxxxx, L.L.P. or Ernst & Young, L.L.P., or any
successor to any thereof as a result of their combination.
X.15. Limitations on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Guarantor of
real or personal property which has been or is to be sold or transferred by the
Borrower or any Guarantor to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or any Guarantor.
X.16. Negative Pledge Clauses. Enter into any agreement other than
this Agreement and the other Loan Documents and the Junior Financing Documents
which prohibits or limits the ability of any of the Borrower or any Guarantor to
create, incur, assume or suffer to exist any Lien, security interest or
encumbrance upon any of its property, assets or revenues, whether now owned or
hereafter acquired.
X.17. Intellectual Property. Cause or permit any of the licenses,
trademarks, patents, copyrights, or other Intellectual Property of the Borrower
or its Subsidiaries to be sub-licensed, assigned or transferred or subject to
any encumbrance or interest, other than in favor of the Agent for the benefit of
the Lenders hereunder or, with respect to sub-licenses only, to manufacturers
and distributors of Inventory in the ordinary course of business as currently
conducted.
X.18. Licenses. Grant, establish, create or permit to exist any
license of any of the Intellectual Property to any Person except for (i) such
licenses granted for the limited purpose of conducting sales or marketing
promotions in the ordinary course of business of existing or new products for a
reasonable, limited time period, (ii) such licenses approved by the Required
Lenders in writing prior to the granting thereof within 30 days after request
therefor, such
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approval not to be unreasonably withheld, and (iii) such licenses granted to any
Material Subsidiary party to the Intellectual Property Security Agreement which
has delivered an appropriate Intellectual Property Assignment executed in blank
with respect to such license.
X.19. Amendment of Documents. Materially amend, supplement or
replace, or waive any of the material terms or provisions of, (a) any Material
Contract, (b) the Transaction Documents, (c) the Bridge Loan Agreement or (d)
the Organizational Documents or Operating Documents of the Borrower without the
prior written consent of the Agent and the Required Lenders.
X.20. Limitations on Certain Restrictive Covenants. Neither the
Borrower nor any Subsidiary shall enter into, or permit to exist, with any
Person any agreement (other than this Agreement) which prohibits or limits the
ability of any Subsidiary to declare or pay any dividend or make any loan to or
investment in the Borrower or any other owner of such Subsidiary.
X.21. Limitations on Business Activities. The Borrower will not
conduct any business or engage in any activity or hold any assets other than
holding the shares of capital stock of its Subsidiaries and administrative
activities directly related thereto.
X.22. Financial Covenants.
(a) Consolidated Net Worth. Permit at any time Consolidated
Net Worth to be less than 90% of Consolidated Net Worth at June 30,
1998, such amount to be increased as at the first day of each fiscal
quarter, beginning with the fiscal quarter beginning October 1, 1998,
by an amount equal to (a) seventy-five percent (75%) of Consolidated
Net Income during the immediately preceding fiscal quarter, plus (b)
one hundred percent (100%) of the Net Proceeds of any Equity Offering
consummated during the immediately preceding fiscal quarter; provided,
however, in no event shall the Consolidated Net Worth requirement be
decreased as a result of a net loss of the Borrower and its
Subsidiaries (i.e., negative Consolidated Net Income) for any fiscal
quarter, except that Consolidated Net Worth may be reduced by the
actual amount of non-cash charges incurred in connection with the HPG
Acquisition up to but not exceeding $25,000,000. Any increase
calculated pursuant hereto shall be determined based upon financial
statements delivered in accordance with Section 9.1(a) and (b) hereof;
provided, however such increase shall be deemed effective as of the
first day of the fiscal quarter in which such financial statements are
delivered or required to be delivered, if earlier.
(b) During the period prior to the refinancing of the
Subordinated Bridge Notes with the Permanent Junior Financing:
(i) Consolidated Fixed Charge Coverage Ratio. Permit
Consolidated Fixed Charge Coverage Ratio to be less than the
ratio indicated below at any time during the period indicated:
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Closing Date through
third fiscal quarter 1999 1.00 to 1.00
Fourth fiscal quarter 1999
and thereafter 1.25 to 1.00
(ii) Consolidated Interest Coverage Ratio. Permit
Consolidated Interest Coverage Ratio to be less than the ratio
indicated below at any time during the period indicated:
Closing Date through
first fiscal quarter 1999 1.75 to 1.00
Second fiscal quarter 1999
through third fiscal quarter 1999 1.50 to 1.00
Fourth fiscal quarter 1999
through third fiscal quarter 2000 1.75 to 1.00
Fourth fiscal quarter 2000
and thereafter 2.00 to 1.00
(iii) Consolidated Leverage Ratio. Permit Consolidated
Leverage Ratio to be greater than the ratio indicated below at
any time during the period indicated:
Second fiscal quarter 1999 6.50 to 1.00
Third fiscal quarter 1999 6.80 to 1.00
Fourth fiscal quarter 1999
through first fiscal quarter 2000 5.00 to 1.00
Second fiscal quarter 2000 5.50 to 1.00
Third fiscal quarter 2000 5.75 to 1.00
Fourth fiscal quarter 2000
through second fiscal quarter 2001 4.00 to 1.00
Third fiscal quarter 2001 4.50 to 1.00
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Fourth fiscal quarter 2001
and thereafter 3.50 to 1.00
(iv) Consolidated EBITDA. Permit Consolidated EBITDA
to be less than the amount indicated below at the date
indicated:
Third fiscal quarter end 1998 $23,000,000
Fourth fiscal quarter end 1998 $54,000,000
First fiscal quarter end 1999 $60,000,000
(v) Total Indebtedness. Permit the aggregate amount
of Indebtedness owing by the Borrower and its Subsidiaries on
a consolidated basis, less the outstanding amount of the
Subordinated Bridge Notes, to exceed $355,000,000 at any time.
(c) During the period on or after the consummation of the
refinancing of the Subordinated Bridge Notes with the Permanent Junior
Financing:
(i) Consolidated Fixed Charge Coverage Ratio. Permit
Consolidated Fixed Charge Coverage Ratio to be less than the
ratio indicated below at any time during the period indicated:
Closing Date through
third fiscal quarter 1999 1.00 to 1.00
Fourth fiscal quarter 1999
through third fiscal quarter 2000 1.25 to 1.00
Fourth fiscal quarter 2000
and thereafter 1.50 to 1.00
(ii) Consolidated Interest Coverage Ratio. Permit
Consolidated Interest Coverage Ratio to be less than the ratio
indicated below at any time during the period indicated:
Closing Date through
third fiscal quarter 1999 2.00 to 1.00
Fourth fiscal quarter 1999
through third fiscal quarter 2000 2.50 to 1.00
Fourth fiscal quarter 2000
and thereafter 3.00 to 1.00
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(iii) Consolidated Leverage Ratio. Permit Consolidated
Leverage Ratio to be greater than the ratio indicated below at
any time during the period indicated:
Second fiscal quarter 1999 5.50 to 1.00
Third fiscal quarter 1999 6.00 to 1.00
Fourth fiscal quarter 1999
through first fiscal quarter 2000 4.00 to 1.00
Second fiscal quarter 2000
Through third fiscal quarter 2000 4.50 to 1.00
Fourth fiscal quarter 2000
through second fiscal quarter 2001 3.00 to 1.00
Third fiscal quarter 2001 3.50 to 1.00
Fourth fiscal quarter 2001
and thereafter 3.00 to 1.00
(iv) Consolidated EBITDA. Permit Consolidated EBITDA
to be less than the amount indicated below at the date
indicated:
Third fiscal quarter end 1998 $23,000,000
Fourth fiscal quarter end 1998 $54,000,000
First fiscal quarter end 1999 $60,000,000
(v) Total Indebtedness. Permit the aggregate amount
of Indebtedness owing by the Borrower and its Subsidiaries on
a consolidated basis, less the outstanding amount of the
Permanent Subordinated Notes, to exceed $335,000,000 at any
time.
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ARTICLE XI
Events of Default and Acceleration
XI.1. Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual payment
of the principal of any Loan, Reimbursement Obligation or other
Obligation, when and as the same shall be due and payable whether
pursuant to any provision of Article II, Article III or Article IV, at
maturity, by acceleration or otherwise; or
(b) if default shall be made in the due and punctual payment
of any amount of interest on any Loan, Reimbursement Obligation or
other Obligation or of any fees or other amounts payable to any of the
Lenders, the Issuing Bank or the Agent on the date on which the same
shall be due and payable; or
(c) if default shall be made in the performance or observance
of any covenant set forth in Sections 9.7, 9.10, 9.20, 9.21 and Article
X; or
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement or the Notes (other than as
described in clauses (a) or (b) above) and such default shall continue
for 30 or more days after the earlier of receipt of notice of such
default by the Authorized Representative from the Agent or an officer
of the Borrower becomes aware of such default, or if a default shall be
made in the performance or observance of, or shall occur under, any
covenant, agreement or provision contained in any of the other Loan
Documents (beyond any applicable grace period, if any, contained
therein) or in any instrument or document evidencing or creating any
obligation, guaranty, or Lien in favor of the Agent or any of the
Lenders or delivered to the Agent or any of the Lenders in connection
with or pursuant to this Agreement or any of the Obligations, or if any
Loan Document ceases to be in full force and effect (other than in
accordance with its terms in the absence of default or with the consent
of the Agent and the Lenders), or if without the written consent of the
Lenders, this Agreement or any other Loan Document shall be disaffirmed
or shall terminate, be terminable or be terminated or become void or
unenforceable for any reason whatsoever (other than in accordance with
its terms in the absence of default or with the consent of the Agent
and the Lenders); or
(e) if there shall occur (i) a default, which is not waived,
in the payment of any principal, interest, premium or other amount with
respect to any Indebtedness (other
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than the Loans and other Obligations) of the Borrower or any of its
Subsidiaries in an amount not less than $500,000 in the aggregate
outstanding, or (ii) a default, which is not waived, in the
performance, observance or fulfillment of any term or covenant
contained in any agreement or instrument under or pursuant to which any
such Indebtedness may have been issued, created, assumed, guaranteed or
secured by the Borrower or any of their Subsidiaries, or (iii) any
other event of default as specified in any agreement or instrument
under or pursuant to which any such Indebtedness may have been issued,
created, assumed, guaranteed or secured by the Borrower or any of its
Subsidiaries, and such default or event of default shall continue for
more than the period of grace, if any, therein specified, or such
default or event of default shall permit the holder of any such
Indebtedness (or any agent or trustee acting on behalf of one or more
holders) to accelerate the maturity thereof; or
(f) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report
or statement at any time furnished to the Agent or any Lender by or on
behalf of the Borrower or any of its Subsidiaries pursuant to or in
connection with any Loan Document, or otherwise, shall be false or
misleading in any material respect when given; or
(g) if the Borrower or any of its Subsidiaries shall be unable
to pay its debts generally as they become due; file a petition to take
advantage of any insolvency statute; make an assignment for the benefit
of its creditors; commence a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole
or any substantial part of its property; file a petition or answer
seeking liquidation, reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or any of its Subsidiaries or
of the whole or any substantial part of its properties and such order,
judgment or decree continues unstayed and in effect for a period of
sixty (60) days, or approve a petition filed against the Borrower or
any of its Subsidiaries seeking liquidation, reorganization or
arrangement or similar relief under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
state, which petition is not dismissed within sixty (60) days; or if,
under the provisions of any other law for the relief or aid of debtors,
a court of competent jurisdiction shall assume custody or control of
the Borrower or any of its Subsidiaries or of the whole or any
substantial part of any of its properties, which control is not
relinquished within sixty (60) days; or if there is commenced against
the Borrower or any of its Subsidiaries any proceeding or petition
seeking reorganization, arrangement or similar relief under the federal
bankruptcy laws or any other applicable law or statute of the United
States of America or any state which proceeding or petition remains
undismissed for a period of sixty (60) days; or if the Borrower or any
of its Subsidiaries takes any action to indicate its consent to or
approval of any such proceeding or petition; or
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(i) if (i) one or more judgments or orders where the amount
not covered by insurance (or the amount as to which the insurer denies
liability) is in excess of $1,000,000 is rendered against the Borrower
or any of its Subsidiaries, or (ii) there is any attachment, injunction
or execution against any of the Borrower's or its Subsidiaries' or
properties for any amount in excess of $1,000,000 in the aggregate; and
such judgment, attachment, injunction or execution remains unpaid,
unstayed, undischarged, unbonded or undismissed for a period of thirty
(30) days; or
(j) if the Borrower or any of its Subsidiaries shall suspend
all or any part of its operations material to the conduct of the
business of the Borrower and its Subsidiaries taken as a whole; or
(k) if the Borrower merges into another Person or dissolves;
(l) if there shall occur and not be waived an Event of
Default as defined in any of the other Loan Documents; or
(m) if any Event of Default as defined in any of the Bridge
Loan Documents or the Permanent Junior Financing Documents shall occur;
or
(n) if any Person or group of Persons acting in concert, other
than the owners of more than 10% of outstanding securities of the
Borrower as of Closing Date having voting rights in the election of
directors, shall own or control, directly or indirectly, more than 30%
of the outstanding securities of the Borrower having voting rights in
the election of directors, in each case to be determined on a fully
diluted basis and taking into account any outstanding securities or
contract rights exercisable, exchangeable or convertible into equity
interests; or
(o) if (i) the Borrower or any Subsidiary shall fail (A) to
implement or complete any material action or process constituting a
portion of the Year 2000 Compliance Plan on the date set forth for
implementation or completion of such action or process and such failure
shall continue for a period of 30 or more days or (B) to be Year 2000
Compliant on or after 90 days prior to year 2000; or (ii) any Related
Business Party (A) shall notify the Borrower that it will not or
reasonably does not expect to be Year 2000 Compliant prior to January
1, 2000 or (B) shall fail to be Year 2000 Compliant on or after 90 days
prior to January 1, 2000; or
(p) if the Kmart Agreement shall be terminated or any
amendment thereof is entered into by the parties thereto without the
consent of the Agent and such termination or amendment has or could
reasonably be expected to have a Material Adverse Effect; or
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(q) if the report of the field examination of the assets of
the Borrower is not completed with results satisfactory to the Agent
within 90 days after the Closing Date; or
(r) if the the acquistion of the Queretero, Mexico property is
not consummated in accordance with the terms of the Transaction
Agreement on or before August 31, 1998; or
(s) if the Black & Xxxxxx License Agreement shall (i) be
modified in any material respect having an adverse effect on the
Borrower without the written consent of the Agent or (ii) terminate, or
the license granted thereunder shall terminate, for any reason prior to
the expiration of the Initial Term (as defined in the Black & Xxxxxx
License Agreement);
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived,
(A) either or both of the following actions may be
taken: (i) the Agent, with the consent of the
Required Lenders, may, and at the direction of the
Required Lenders shall, declare any obligation of the
Lenders and the Issuing Bank to make further
Revolving Loans and Swing Line Loans or to issue
additional Letters of Credit terminated, whereupon
the obligation of each Lender to make further
Revolving Loans, of NationsBank to make further Swing
Line Loans, and of the Issuing Bank to issue
additional Letters of Credit, hereunder shall
terminate immediately, and (ii) the Agent shall at
the direction of the Required Lenders, at their
option, declare by notice to the Borrower any or all
of the Obligations to be immediately due and payable,
and the same, including all interest accrued thereon
and all other obligations of the Borrower to the
Agent and the Lenders, shall forthwith become
immediately due and payable without presentment,
demand, protest, notice or other formality of any
kind, all of which are hereby expressly waived,
anything contained herein or in any instrument
evidencing the Obligations to the contrary
notwithstanding; provided, however, that
notwithstanding the above, if there shall occur an
Event of Default under clause (g) or (h) above, then
the obligation of the Lenders to make Revolving
Loans, of NationsBank to make Swing Line Loans, and
of the Issuing Bank to issue Letters of Credit
hereunder shall automatically terminate and any and
all of the Obligations shall be immediately due and
payable without the necessity of any action by the
Agent or the Required Lenders or notice to the Agent
or the Lenders;
(B) the Borrower shall, upon demand of the Agent
or the Required Lenders, deposit cash with the Agent
in an amount equal to the amount of any Letter of
Credit Outstandings, as collateral security for the
repayment
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of any future drawings or payments under such Letters
of Credit, and such amounts shall be held by the
Agent pursuant to the terms of the LC Account
Agreement; and
(C) the Agent and each of the Lenders shall have
all of the rights and remedies available under the
Loan Documents or under any applicable law.
XI.2. Agent to Act. In case any one or more Events of Default shall
occur and not have been waived, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
XI.3. Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
XI.4. No Waiver. No course of dealing between the Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
XI.5. Allocation of Proceeds. If an Event of Default has occurred and
not been waived, and the maturity of the Notes has been accelerated pursuant to
this Article XI, all payments received by the Agent hereunder, in respect of any
principal of or interest on the Obligations or any other amounts payable by the
Borrower hereunder, shall be applied by the Agent in the following order:
(a) amounts due to the Lenders pursuant to Sections 3.10, 4.3,
4.4 and 13.5 hereof;
(b) amounts due to the Agent pursuant to Section 12.8 hereof;
(c) payments of interest on Loans and Reimbursement
Obligations, to be applied for the ratable benefit of the Lenders;
(d) payments of principal of Loans and Reimbursement
Obligations, to be applied for the ratable benefit of the Lenders;
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(e) payments of cash amounts to the Agent in respect of
outstanding Letters of Credit pursuant to Section 11.1 hereof;
(f) amounts due to the Agent, the Issuing Bank and/or Lenders
pursuant to Sections 4.2(g) and 12.9 hereof;
(g) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the
Lenders;
(h) payments of amount due to Lenders under any Swap
Agreement;
(i) any surplus remaining after application as provided for
herein, to the Borrower or otherwise as may be required by applicable
law.
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ARTICLE XII
The Agent
XII.1. Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Agent (which term as used in this sentence and in Section 12.5
hereof and the first sentence of Section 12.6 hereof shall include its
affiliates and its own and its affiliates' officers, directors, employees, and
agents): (a) shall not have any duties or responsibilities except those
expressly set forth in this Agreement and shall not be a trustee or fiduciary
for any Lender; (b) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral) made in or in
connection with any Loan Document or any certificate or other document referred
to or provided for in, or received by any of them under, any Loan Document, or
for the value, validity, effectiveness, genuineness, enforceability, or
sufficiency of any Loan Document, or any other document referred to or provided
for therein or for any failure by any Loan Party or any other Person to perform
any of its obligations thereunder; (c) shall not be responsible for or have any
duty to ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Loan Party or the satisfaction of any condition
or to inspect the property (including the books and records) of any Loan Party
or any of its Subsidiaries or affiliates; (d) shall not be required to initiate
or conduct any litigation or collection proceedings under any Loan Document; and
(e) shall not be responsible for any action taken or omitted to be taken by it
under or in connection with any Loan Document, except for its own gross
negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
Each Lender hereby irrevocably designates and appoints NationsBank as the Agent
for the Lenders under this Agreement, and each of the Lenders hereby irrevocably
authorizes NationsBank as the Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers as are expressly delegated to the Agent by the terms of
this Agreement and such other Loan Documents, together with such other powers as
are reasonably incidental thereto. The Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any of the Lenders, 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.
XII.2. Reliance by Agent. The Agent shall be entitled to rely upon
any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telefacsimile)
believed by it to be genuine and correct and to have been signed, sent or made
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel for any Loan Party), independent
accountants, and other experts
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selected by the Agent. The Agent may deem and treat the payee of any Note as the
holder thereof for all purposes hereof unless and until the Agent receives and
accepts an Assignment and Acceptance executed in accordance with Section 13.1
hereof. As to any matters not expressly provided for by this Agreement, the
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding on all of the Lenders; provided,
however, that the Agent shall not be required to take any action that exposes
the Agent to personal liability or that is contrary to any Loan Document or
applicable law or unless it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking any such action.
XII.3. Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the Agent has
received written notice from a Lender or the Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 12.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Lenders, provided that, unless and until the Agent shall have received such
directions, 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 in the best interest of the Lenders.
XII.4. Rights as Lender. With respect to its Revolving Credit
Commitment and the Loans made by it, NationsBank (and any successor acting as
Agent) in its capacity as a Lender hereunder shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not acting as the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity.
NationsBank (and any successor acting as Agent) and its affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any Credit Party or any of its
Subsidiaries or affiliates as if it were not acting as Agent, and NationsBank
(and any successor acting as Agent) and its affiliates may accept fees and other
consideration from any Credit Party or any of its Subsidiaries or affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
XII.5. Indemnification. The Lenders agree to indemnify the Agent (to
the extent not reimbursed under Section 13.5 hereof, but without limiting the
obligations of the Borrower under such Section) ratably in accordance with their
respective Revolving Credit Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the Agent
(including by any Lender) in any way relating to or arising out of any Loan
Document or the transactions contemplated thereby or
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any action taken or omitted by the Agent under any Loan Document; provided that
no Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the Person to be indemnified.
Without limitation of the foregoing, each Lender agrees to reimburse the Agent
promptly upon demand for its ratable share of any costs or expenses payable by
the Borrower under Section 13.5 hereof, to the extent that the Agent is not
promptly reimbursed for such costs and expenses by the Borrower. The agreements
contained in this Section shall survive the Facility Termination Date and the
expiration or termination of this Agreement.
XII.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees
that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Credit Parties and its
Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under the Loan Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition, or business of any Credit Party or any of its Subsidiaries or
affiliates that may come into the possession of the Agent or any of its
affiliates.
XII.7. Resignation of Agent. The Agent may resign at any time by
giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent meeting the requirements set forth herein. The Borrower shall have the
right to approve such Agent so long as no Default or Event of Default exist. If
no successor Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent which shall be a commercial bank
organized under the laws of the United States of America having combined capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges, and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article XI shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
XII.8. Fees. The Borrower agrees to pay to the Agent, for its
individual account, an annual Agent's fee as from time to time agreed to by the
Borrower and Agent in writing.
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ARTICLE XIII
Miscellaneous
XIII.1. Assignments and Participations.
(a) Each Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Loans, its
Note, and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another
Lender, an Affiliate of a Lender, or Approved Fund or an
assignment of all of a Lender's rights and obligations under
this Agreement, any such partial assignment shall be in an
amount at least equal to $5,000,000 or an integral multiple of
$1,000,000 (or if less, the entire remaining amount of such
Lender's Revolving Credit Commitment, Term Loan A Commitment,
Term Loan B Commitment or Term Loan C Commitment) in excess
thereof;
(iii) each such assignment by a Lender with respect to
the Revolving Credit Facility shall be of a constant, and not
varying, percentage of all of its rights and obligations under
the Revolving Credit Facility and Letter of Credit Facility
and the Revolving Note;
(iv) each such assignment by a Lender with respect to
the Term Loan A Facility shall be of a constant, and not
varying, percentage of all of its rights and obligations under
the Term Loan A Facility and the Term Note A;
(v) each assignment by a Lender with respect to the
Term Loan B Facility shall be a constant, and not varying,
percentage of all of its rights and obligations under the Term
Loan B Facility and the Term Note B;
(vi) each assignment by a Lender with respect to the
Term Loan C Facility shall be a constant, and not varying,
percentage of all of its rights and obligations under the Term
Loan C Facility and the Term Note C; and
(vii) the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and
Acceptance in the form of Exhibit B hereto, together with any
Note subject to such assignment and a processing fee of
$3,500.
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Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits
of a Lender hereunder and the assigning Lender shall, to the extent of
such assignment, relinquish its rights and be released from its
obligations under this Agreement. Upon the consummation of any
assignment pursuant to this Section, the assignor, the Agent and the
Borrower shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is
not incorporated under the laws of the United States of America or a
state thereof, it shall deliver to the Borrower and the Agent
certification as to exemption from deduction or withholding of Taxes in
accordance with Section 6.6 hereof.
(b) The Agent shall maintain at its address referred to in
Section 13.2 hereof a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal
amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Agent and the Lenders may treat each Person whose name is recorded in
the Register as a Lender hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such
assignment and payment of the processing fee, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially
the form of Exhibit B hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons
in all or a portion of its rights, obligations or rights and
obligations under this Agreement (including all or a portion of its
Commitment or its Loans); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the right of set-off
contained in Section 13.3 hereof, and (iv) the Borrower shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender
shall retain the sole right to enforce the obligations of the Borrower
relating to its Loans and its Notes and to approve any amendment,
modification, or waiver of any provision of this Agreement; provided,
however, that consent of the participant may be required for
amendments, modifications, or waivers decreasing the amount of
principal of or the rate at which interest is payable on such Loans or
Notes, extending any scheduled principal payment date or date fixed for
the payment of interest on such Loans or Notes, or extending or
increasing its Commitment).
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(e) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time assign and pledge all or any
portion of its Loans and its Note to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.
(f) Any Lender may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective
assignees and participants), subject, however, to the provisions of
Section 13.9 hereof.
XIII.2. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of receipt at such address, telefacsimile
number or telex number as may from time to time be specified by such party in
written notice to the other parties hereto or otherwise received), in the case
of notice by telegram, telefacsimile or telex, respectively (where the receipt
of such message is verified by return), or (iii) on the fifth Business Day after
the day on which mailed, if sent prepaid by certified or registered mail, return
receipt requested, in each case delivered, transmitted or mailed, as the case
may be, to the address, telex number or telefacsimile number, as appropriate,
set forth below or such other address or number as such party shall specify by
notice hereunder:
(a) if to the Borrower:
Windmere-Durable Holdings, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(b) if to the Agent:
NationsBank, National Association
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to:
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NationsBank, National Association
NationsBank Tower
000 Xxxxxxxxx 0xx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Corporate Finance
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(c) if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each Assignment
and Acceptance;
(d) if to any other Credit Party, at the address set forth on
the signature page of the Facility Guaranty or Security Instrument
executed by such Credit Party, as the case may be.
XIII.3. Right of Set-off; Adjustments
(a) Upon the occurrence and during the continuance of any
Event of Default, each Lender (and each of its affiliates) is hereby
authorized at any time and from time to time, 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 and
other indebtedness at any time owing by such Lender (or any of its
affiliates) to or for the credit or the account of the Borrower against
any and all of the obligations of the Borrower now or hereafter
existing under this Agreement and the Note held by such Lender,
irrespective of whether such Lender shall have made any demand under
this Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower after any
such set-off and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time
receive any payment of all or part of the Loans owing to it, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, or otherwise), in a greater
proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans owing to it, or
interest thereon, such benefitted Lender shall purchase for cash from
the other Lenders a participating interest in such portion of each such
other Lender's Loans owing to it, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds
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thereof, as shall be necessary to cause such benefitted Lender to share
the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but
without interest. The Borrower agrees that any Lender so purchasing a
participation from a Lender pursuant to this Section 13.3 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as
fully as if such Person were the direct creditor of the Borrower in the
amount of such participation.
XIII.4. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the issuance of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect so long as any of Obligations remain outstanding or any Lender has any
commitment hereunder or the Borrower has continuing obligations hereunder unless
otherwise provided herein. Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions and agreements by
or on behalf of the Borrower which are contained in the Loan Documents shall
inure to the benefit of the successors and permitted assigns of the Lenders or
any of them.
XIII.5. Expenses; Indemnification.
(a) The Borrower agrees to pay on demand all costs and
expenses of the Agent in connection with the syndication of the
facilities and the preparation, execution, delivery, administration,
modification or amendment of this Agreement, the other Loan Documents
and the other documents to be delivered hereunder, including, without
limitation, the reasonable fees and expenses of counsel for the Agent
with respect thereto and with respect to advising the Agent as to its
rights and responsibilities under the Loan Documents. The Borrower
acknowledges that NationsBank and NMS on behalf of the Borrower will
cause a substantial portion of the Commitments to be acquired by other
financial institutions subsequent to the Closing Date. NationsBank, at
the request of the Borrower and in order to expedite the HPG
Acquisition, has agreed to provide all the Commitments at the Closing
Date. The Borrower agrees that during a period of up to 90 days
following the Closing Date one or more assignments of portions of the
Commitments will occur and that to the extent the Borrower has
outstanding Eurodollar Rate Loans the Borrower will likely incur
additional costs, fees and charges under Section 6.5 hereof. The
Borrower agrees to immediately reimburse the Agent and NationsBank for
any such costs, fees and charges. In addition, the Borrower agrees that
the incurrence of such costs, fees and charges shall not be the basis
for the Borrower withholding its consent or approval of any Person as
an Eligible Assignee. The Borrower further agrees to pay on demand all
costs and expenses of the Agent and the Lenders, if
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any (including, without limitation, reasonable attorneys' fees and
expenses), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Loan Documents
and the other documents to be delivered hereunder.
(b) The Borrower agrees to indemnify and hold harmless the
Agent and each Lender and each of their affiliates and their respective
officers, directors, employees, agents, and advisors (each, an
"Indemnified Party") from and against any and all claims, damages,
losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation, or
proceeding or preparation of defense in connection therewith) the Loan
Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans, except to the extent such
claim, damage, loss, liability, cost, or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful
misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 13.5 applies, such
indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by the Borrower, its directors,
shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or
not the transactions contemplated hereby are consummated. The Borrower
agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to it, any of its
Subsidiaries, any Guarantor, or any security holders or creditors
thereof arising out of, related to or in connection with the
transactions contemplated herein, except to the extent that such
liability is found in a final non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified party's
gross negligence or willful misconduct; provided, however, in no event
shall any Indemnified Party be liable for punitive, consequential,
indirect or special damages, as opposed to direct damages.
(c) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 13.5 shall survive the Facility
Termination Date and the expiration or termination of this Agreement.
XIII.6. Amendments and Waivers. Any provision of this Agreement or
any other Loan Document may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Lenders
(and, if Article XII or the rights or duties of the Agent are affected thereby,
by the Agent); provided that no such amendment or waiver shall, unless signed by
all the Lenders, (i) increase the Commitments of the Lenders, (ii) reduce the
principal of or rate of interest on any Loan or any fees or other amounts
payable hereunder, (iii) postpone any date fixed for the payment of any
scheduled installment of principal of or interest on any Loan or any fees or
other amounts payable hereunder or for termination of any
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Commitment, or (iv) change the percentage of the Commitments or of the unpaid
principal amount of the Notes, or the number of Lenders, which shall be required
for the Lenders or any of them to take any action under this Section 13.5 or any
other provision of this Agreement or (v) release Guarantors or all or
substantially all of the Collateral other than as otherwise permitted herein;
and provided further that no such amendment or waiver shall, unless signed by
Lenders holding more than 50% of the Term Loan A Commitments, Term Loan B
Commitments or Term Loan C Commitments, as applicable, change the application of
any payment of Term Loan A, Term Loan B or Term Loan C.
XIII.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
XIII.8. Termination. The termination of this Agreement shall not
affect any rights of the Borrower, the Lenders or the Agent or any obligation of
the Borrower, the Lenders or the Agent, arising prior to the effective date of
such termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. The rights granted to the Agent for the benefit of the
Lenders under the Loan Documents shall continue in full force and effect,
notwithstanding the termination of this Agreement, until all of the Obligations
have been paid in full after the termination hereof (other than Obligations in
the nature of continuing indemnities or expense reimbursement obligations not
yet due and payable, which shall continue) or the Borrower has furnished the
Lenders and the Agent with an indemnification satisfactory to the Agent and each
Lender with respect thereto. All representations, warranties, covenants, waivers
and agreements contained herein shall survive termination hereof until payment
in full of the Obligations unless otherwise provided herein. Notwithstanding the
foregoing, if after receipt of any payment of all or any part of the
Obligations, any Lender is for any reason compelled to surrender such payment to
any Person because such payment is determined to be void or voidable as a
preference, impermissible setoff, a diversion of trust funds or for any other
reason, this Agreement shall continue in full force and the Borrower shall be
liable to, and shall indemnify and hold the Agent or such Lender harmless for,
the amount of such payment surrendered until the Agent or such Lender shall have
been finally and irrevocably paid in full. The provisions of the foregoing
sentence shall be and remain effective notwithstanding any contrary action which
may have been taken by the Agent or the Lenders in reliance upon such payment,
and any such contrary action so taken shall be without prejudice to the Agent or
the Lenders' rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.
XIII.9. Confidentiality. The Agent and each Lender (each, a "Lending
Party") agrees to keep confidential any information furnished or made available
to it by the Borrower pursuant to this Agreement that is marked confidential;
provided that nothing herein shall prevent any
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Lending Party from disclosing such information (a) to any other Lending Party or
any affiliate of any Lending Party, or any officer, director, employee, agent,
or advisor of any Lending Party or affiliate of any Lending Party, (b) to any
other Person if reasonably incidental to the administration of the credit
facility provided herein, (c) as required by any law, rule, or regulation, (d)
upon the order of any court or administrative agency, (e) upon the request or
demand of any regulatory agency or authority, (f) that is or becomes available
to the public or that is or becomes available to any Lending Party other than as
a result of a disclosure by any Lending Party prohibited by this Agreement, (g)
in connection with any litigation to which such Lending Party or any of its
affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Agreement or any other Loan Document, and (i)
subject to provisions substantially similar to those contained in this Section
13.9, to any actual or proposed participant or assignee.
XIII.10. Severability. If any provision of this Agreement or the
other Loan Documents shall be determined to be illegal or invalid as to one or
more of the parties hereto, then such provision shall remain in effect with
respect to all parties, if any, as to whom such provision is neither illegal nor
invalid, and in any event all other provisions hereof shall remain effective and
binding on the parties hereto.
XIII.11. Entire Agreement. This Agreement, together with the other
Loan Documents, constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all previous proposals,
negotiations, representations, commitments and other communications between or
among the parties, both oral and written, with respect thereto.
XIII.12. Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of this
Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.
XIII.13. Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under applicable law shall not exceed the Highest Lawful Rate (as such term is
defined below). If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined below), the outstanding amount of the Loans made hereunder
shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at all
times been in effect. In addition, if when the Loans made hereunder are repaid
in full the total interest due hereunder (taking into account the increase
provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect, then to the extent permitted by law, the
Borrower shall pay to the Agent an amount equal to the difference between the
amount of interest paid and the amount of interest which would have been paid if
the Highest Lawful Rate had at all times been in effect. Notwithstanding the
foregoing, it is the intention of
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the Lenders and the Borrower to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration
which constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be canceled automatically and, if previously paid, shall at such
Lender's option be applied to the outstanding amount of the Loans made hereunder
or be refunded to the Borrower. As used in this paragraph, the term "Highest
Lawful Rate" means the maximum lawful interest rate, if any, that at any time or
from time to time may be contracted for, charged, or received under the laws
applicable to such Lender which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable laws now
allow.
XIII.14. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN
THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL BE
GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.
(b) THE BORROWER AND EACH LENDER HEREBY EXPRESSLY AND
IRREVOCABLY AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT
SITTING IN NEW YORK AND, BY THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER AND EACH LENDER EXPRESSLY WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN, OR TO THE
EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN
ANY SUCH SUIT, ACTION OR PROCEEDING, AND THE BORROWER AND EACH LENDER
HEREBY IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) THE BORROWER AND EACH LENDER AGREES THAT SERVICE OF
PROCESS MAY BE MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND
COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE
ADDRESS OF THE BORROWER PROVIDED IN SECTION 13.2 HEREOF, BY ANY OTHER
METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN
THE STATE OF FLORIDA.
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(d) NOTHING CONTAINED IN SUBSECTIONS (A) OR (B) HEREOF SHALL
PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE
COURTS OF ANY JURISDICTION WHERE THE BORROWER OR ANY OF THE BORROWER'S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY
THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO
THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER
COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER
APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION THEREWITH, THE BORROWER, THE
AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE
TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.
[Signatures on following pages]
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124
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
WINDMERE-DURABLE HOLDINGS, INC.
WITNESS:
By:
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President-Finance and
Administration
NATIONSBANK, NATIONAL ASSOCIATION,
AS AGENT
By:
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
Credit Agreement Signature Page 1
125
NATIONSBANK, NATIONAL ASSOCIATION
By:
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
Domestic Lending Office:
NationsBank, National Association
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
Wire Transfer Instructions:
NationsBank, National Association
ABA # 000000000
Account No.:1366212250600
Reference: Corporate Credit Services
Attention: Windmere
Credit Agreement Signature Page 2
