EXHIBIT 10.3
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CREDIT AGREEMENT
among
MOTORS AND GEARS INDUSTRIES, INC.,
VARIOUS BANKS,
and
BANKERS TRUST COMPANY,
as AGENT
__________________________________
Dated as of November 7, 1996
__________________________________
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TABLE OF CONTENTS
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Page
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SECTION 1. Amount and Terms of Credit........................ 1
1.01 The Commitments................................... 1
1.02 Minimum Amount of Each Borrowing.................. 3
1.03 Notice of Borrowing............................... 4
1.04 Disbursement of Funds............................. 5
1.05 Notes............................................. 5
1.06 Conversions....................................... 6
1.07 Pro Rata Borrowings............................... 7
1.08 Interest.......................................... 7
1.09 Interest Periods.................................. 8
1.10 Increased Costs, Illegality, etc.................. 9
1.11 Compensation...................................... 11
1.12 Change of Lending Office.......................... 12
1.13 Replacement of Banks.............................. 12
SECTION 2. Letters of Credit................................. 14
2.01 Letters of Credit................................. 14
2.02 Minimum Stated Amount............................. 15
2.03 Letter of Credit Requests......................... 15
2.04 Letter of Credit Participations................... 16
2.05 Agreement to Repay Letter of Credit Drawings...... 18
2.06 Increased Costs................................... 19
SECTION 3. Fees; Reductions of Commitment.................... 20
3.01 Fees.............................................. 20
3.02 Voluntary Termination of Unutilized Commitments... 21
3.03 Mandatory Reduction of Commitments................ 22
SECTION 4. Prepayments; Payments; Taxes...................... 24
4.01 Voluntary Prepayments............................. 24
4.02 Mandatory Repayments and Cash Collateralizations.. 25
4.03 Method and Place of Payment....................... 26
4.04 Net Payments; Taxes............................... 26
SECTION 5. Conditions Precedent to Credit Events on the Initial
Borrowing Date.................................. 28
5.01 Execution of Agreement; Notes..................... 28
5.02 Officer's Certificate............................. 28
5.03 Fees, etc......................................... 29
5.04 Opinions of Counsel............................... 29
5.05 Corporate Documents; Proceedings; etc............. 29
5.06 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Employment Agreements;
Collective Bargaining Agreements; Debt Agreements;
Tax Sharing Agreements; Material Contracts....... 30
5.07 Adverse Change.................................... 31
5.08 Litigation........................................ 31
5.09 Approvals, etc.................................... 31
5.10 Issuance of Senior Unsecured Notes................ 32
5.11 Consummation of the Acquisition and the Merger.... 32
5.12 Refinancing of Existing Credit Agreement.......... 33
5.13 Pledge Agreement.................................. 34
5.14 Security Agreement................................ 34
5.15 Subsidiary Guaranty............................... 35
5.16 Stockholders' Agreement, Subscription Agreements,
Consulting Agreements, Affiliate Leases, etc..... 35
5.17 Consent Letter.................................... 36
5.18 Solvency Certificate; Environmental Assessments;
and Insurance Certificates....................... 36
5.19 Existing Indebtedness............................. 36
5.20 Financial Statements; Pro Forma Financial
Information; Projections......................... 37
5.21 Existing Tax Sharing Agreement.................... 37
5.22 Existing Seller Letter of Credit Agreement........ 38
5.23 Intercompany Notes................................ 38
SECTION 6. Conditions Precedent to All Credit Events......... 38
6.01 No Default; Representations and Warranties........ 38
6.02 Adverse Change, etc............................... 39
6.03 Litigation........................................ 39
6.04 Notice of Borrowing; Letter of Credit Request..... 39
SECTION 7. Representations and Warranties.................... 39
7.01 Corporate Status.................................. 40
7.02 Corporate Power and Authority..................... 40
7.03 No Violation...................................... 40
7.04 Governmental Approvals............................ 41
7.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; Projections; etc........ 41
7.06 Litigation........................................ 44
7.07 True and Complete Disclosure...................... 44
7.08 Use of Proceeds; Margin Regulations............... 45
7.09 Tax Returns and Payments.......................... 45
7.10 Compliance with ERISA............................. 45
7.11 Security Documents................................ 46
7.12 Representations and Warranties in Documents....... 47
7.13 Properties........................................ 47
7.14 Capitalization.................................... 47
7.15 Subsidiaries...................................... 48
7.16 Compliance with Statutes, etc..................... 48
7.17 Investment Company Act............................ 48
7.18 Public Utility Holding Company Act................ 48
7.19 Environmental Matters............................. 49
7.20 Labor Relations................................... 49
7.21 Patents, Licenses, Franchises and Formulas........ 50
7.22 Indebtedness...................................... 50
7.23 Transaction....................................... 50
7.24 Special Purpose Corporations...................... 51
7.25 Subordinated Notes................................ 51
7.26 Insurance......................................... 51
SECTION 8. Affirmative Covenants............................. 51
8.01 Information Covenants............................. 52
8.02 Books, Records and Inspections.................... 55
8.03 Maintenance of Property; Insurance................ 56
8.04 Corporate Franchises.............................. 57
8.05 Compliance with Statutes, etc..................... 57
8.06 Compliance with Environmental Laws................ 57
8.07 ERISA............................................. 58
8.08 End of Fiscal Years; Fiscal Quarters.............. 59
8.09 Performance of Obligations........................ 59
8.10 Payment of Taxes.................................. 59
8.11 Additional Security; Further Assurances; etc...... 60
8.12 Maintenance of Corporate Separateness............. 63
8.13 Use of Proceeds................................... 63
8.14 UCC Searches...................................... 63
8.15 Permitted Transactions............................ 63
8.16 Foreign Subsidiaries Security..................... 67
8.17 Receivables Facility Transaction.................. 68
SECTION 9. Negative Covenants................................ 68
9.01 Liens............................................. 68
9.02 Consolidation, Merger, Purchase or Sale of
Assets, etc...................................... 72
9.03 Restricted Payments............................... 75
9.04 Indebtedness...................................... 80
9.05 Advances, Investments and Loans................... 83
9.06 Transactions with Affiliates...................... 87
9.07 Changes in Business............................... 89
9.08 Consolidated Interest Coverage Ratio.............. 89
9.09 Leverage Ratio.................................... 90
9.10 Limitation on Modifications of Certain Indebtedness;
Modifications of Certificate of Incorporation,
By-Laws and Certain Agreements; etc.............. 90
9.11 Limitation on Certain Restrictions on Subsidiaries 93
9.12 Limitation on Issuance of Capital Stock........... 93
9.13 Limitation on Creation of Subsidiaries............ 94
SECTION 10. Events of Default................................ 94
10.01 Payments......................................... 94
10.02 Representations, etc............................. 94
10.03 Covenants........................................ 95
10.04 Default Under Other Agreements................... 95
10.05 Bankruptcy, etc.................................. 96
10.06 ERISA............................................ 96
10.07 Security Documents............................... 97
10.08 Guaranties....................................... 97
10.09 Judgments........................................ 97
10.10 Change of Control................................ 97
10.11 Senior Unsecured Notes; Parent Subordinated
Intercompany Note............................... 98
10.12 Certain Tax Payments............................. 98
SECTION 11. Definitions and Accounting Terms................. 99
11.01 Defined Terms.................................... 99
SECTION 12. The Agent........................................145
12.01 Appointment......................................145
12.02 Nature of Duties.................................145
12.03 Lack of Reliance on the Agent....................145
12.04 Certain Rights of the Agent......................146
12.05 Reliance.........................................146
12.06 Indemnification..................................146
12.07 The Agent in its Individual Capacity.............147
12.08 Holders..........................................147
12.09 Resignation by the Agent.........................147
SECTION 13. Miscellaneous....................................148
13.01 Payment of Expenses, etc.........................148
13.02 Right of Setoff..................................149
13.03 Notices..........................................149
13.04 Benefit of Agreement.............................150
13.05 No Waiver; Remedies Cumulative...................151
13.06 Payments Pro Rata................................152
13.07 Calculations; Computations.......................152
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL.............................153
13.09 Counterparts.....................................154
13.10 Effectiveness....................................154
13.11 Headings Descriptive.............................155
13.12 Amendment or Waiver; etc.........................155
13.13 Survival.........................................156
13.14 Domicile of Loans................................156
13.15 Confidentiality..................................157
13.16 Register.........................................157
SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Real Property
SCHEDULE IV Projections
SCHEDULE V Subsidiaries
SCHEDULE VI Scheduled Existing Indebtedness
SCHEDULE VII Insurance
SCHEDULE VIII Existing Liens
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B-1 Form of Revolving Note
EXHIBIT B-2 Form of Swingline Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(ii) Certificate
EXHIBIT E-1 Form of Opinion of Xxxxx, Xxxxx & Xxxxx
EXHIBIT E-2 Form of Opinion of Xxxxx, Cave
EXHIBIT F Form of Officers' Certificate
EXHIBIT G Form of Pledge Agreement
EXHIBIT H Form of Security Agreement
EXHIBIT I Form of Subsidiary Guaranty
EXHIBIT J Form of Consent Letter
EXHIBIT K Form of Officer's Solvency Certificate
EXHIBIT L Form of Non-Wholly-Owned Subsidiary Guaranty
EXHIBIT M Form of Intercompany Note
EXHIBIT N Form of Subordination Provisions
EXHIBIT O Form of Existing Seller Subordinated Note
EXHIBIT P Form of Assignment and Assumption Agreement
EXHIBIT Q Form of Existing Seller Installment Note
EXHIBIT R Form of Shareholder Subordinated Note
EXHIBIT S Form of Parent Subordinated Intercompany Note
CREDIT AGREEMENT, dated as of November 7, 1996, among MOTORS AND
GEARS INDUSTRIES, INC., a Delaware corporation (the "Borrower"), the Banks
party hereto from time to time and BANKERS TRUST COMPANY, as Agent (all
capitalized terms used herein and defined in Section 11 are used herein as
therein defined).
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available the credit facility
provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 The Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Bank severally agrees, at any time and
from time to time on and after the Initial Borrowing Date and prior to the
Final Maturity Date, to make a loan or loans (each, a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrower, which Revolving
Loans:
(i) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar
Loans, provided that (x) except as otherwise specifically provided in
Section 1.10(b), all Revolving Loans comprising the same Borrowing
shall at all times be of the same Type and (y) unless the Agent has
determined that the Syndication Date has occurred, no more than one
Borrowing of Revolving Loans to be maintained as Eurodollar Loans may
be incurred (whether pursuant to this Section 1.01(a) or by way of
conversion pursuant to Section 1.06) prior to the 60th day after the
Initial Borrowing Date (which Borrowing of Eurodollar Loans may only
have an Interest Period of one month, and which Borrowing may only be
made on a single date occurring on or prior to the fifth day
following the Initial Borrowing Date);
(ii) may be repaid and reborrowed in accordance with the
provisions hereof; and
(iii) shall not exceed for any Bank at any time outstanding that
aggregate principal amount which, when added to the product of (x)
such Bank's Percentage and (y) the sum of (I) the aggregate amount of
all Letter of Credit Outstandings (exclusive of Unpaid Drawings which
are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) at such
time and (II) the aggregate principal amount of all Swingline Loans
(exclusive of Swingline Loans which are repaid with the proceeds of,
and simultaneously with the incurrence of, the respective incurrence
of Revolving Loans) then outstanding, equals the Available Commitment
of such Bank at such time.
Notwithstanding anything to the contrary contained above, the aggregate
principal amount of Revolving Loans incurred on the Initial Borrowing Date
may not exceed $5,000,000.
(b) Subject to and upon the terms and conditions set forth
herein, the Swingline Bank agrees to make at any time and from time to time
after the Initial Borrowing Date and prior to the Swingline Expiry Date, a
loan or loans (each, a "Swingline Loan" and, collectively, the "Swingline
Loans") to the Borrower, which Swingline Loans:
(i) shall be made and maintained as Base Rate Loans;
(ii) may be repaid and reborrowed in accordance with the
provisions hereof;
(iii) shall not exceed in aggregate principal amount at any time
outstanding, when combined with (x) the aggregate principal amount of
all Revolving Loans then outstanding and (y) the amount of all Letter
of Credit Outstandings at such time, an amount equal to the Total
Available Commitment at such time (after giving effect to any
reductions thereto on such date); and
(iv) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount.
The Swingline Bank shall not be obligated to make any Swingline Loans at a
time when a Bank Default exists unless the Swingline Bank has entered into
arrangements satisfactory to it to eliminate the Swingline Bank's risk with
respect to the Bank which is subject of such Bank Default, including by
cash collateralizing such Bank's Percentage of the outstanding Swingline
Loans. Notwithstanding anything to the contrary contained in this Section
1.01(b), the Swingline Bank shall not make any Swingline Loan after
receiving a written notice from the Borrower or the Required Banks stating
that a Default or an Event of Default exists and is continuing until such
time as the Swingline Bank shall have received written notice of (i)
rescission of all such notices from the party or parties originally
delivering such notice, (ii) the waiver of such Default or Event of Default
by the Required Banks or (iii) the Agent in good faith believes that such
Default or Event of Default has ceased to exist.
(c) On any Business Day, the Swingline Bank may, in its sole
discretion, give notice to the Banks that its outstanding Swingline Loans
shall be funded with a Borrowing of Revolving Loans (provided that such
notice shall be deemed to have been automatically given upon the occurrence
of a Default or an Event of Default under Section 10.05 or upon the
exercise of any of the remedies provided in the last paragraph of Section
10), in which case a Borrowing of Revolving Loans constituting Base Rate
Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the
immediately succeeding Business Day from all Banks (without giving effect
to any terminations and/or reductions thereto pursuant to the last
paragraph of Section 10) pro rata on the basis of their respective
Percentages (determined before giving effect to any termination of the
Commitments pursuant to the last paragraph of Section 10) and the proceeds
thereof shall be applied directly to the Swingline Bank to repay the
Swingline Bank for such outstanding Swingline Loans. Each such Bank hereby
irrevocably agrees to make Revolving Loans upon one Business Day's notice
pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by
the Swingline Bank notwithstanding (i) that the amount of the Mandatory
Borrowing may not comply with the minimum amount for Borrowings otherwise
required hereunder, (ii) whether any conditions specified in Section 5 or 6
are then satisfied, (iii) whether a Default or an Event of Default then
exists, (iv) the date of such Mandatory Borrowing and (v) the amount of the
Total Available Commitment at such time. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower), then
each such Bank hereby agrees that it shall forthwith purchase (as of the
date the Mandatory Borrowing would otherwise have occurred, but adjusted
for any payments received from the Borrower on or after such date and prior
to such purchase) from the Swingline Bank such participations in the
outstanding Swingline Loans as shall be necessary to cause such Banks to
share in such Swingline Loans ratably based upon their respective
Percentages (determined before giving effect to any termination of the
Commitments pursuant to the last paragraph of Section 10); provided, that
(x) all interest payable on the Swingline Loans shall be for the account of
the Swingline Bank until the date as of which the respective participation
is required to be purchased and, to the extent attributable to the
purchased participation, shall be payable to the participant from and after
such date and (y) at the time any purchase of participations pursuant to
this sentence is actually made, the purchasing Bank shall be required to
pay the Swingline Bank interest on the principal amount of participation
purchased for each day from and including the day upon which the Mandatory
Borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the rate otherwise applicable to
Revolving Loans maintained as Base Rate Loans hereunder for each day
thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing of Loans under a respective Tranche shall not be
less than the Minimum Borrowing Amount for such Tranche, provided that
Mandatory Borrowings shall be in the amounts required by Section 1.01(c).
More than one Borrowing may occur on the same date, but at no time shall
there be outstanding more than six Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires
to make a Borrowing hereunder (excluding Borrowings of Swingline Loans and
Mandatory Borrowings), the Borrower shall give the Agent at its Notice
Office at least one Business Day's prior written notice (or telephonic
notice promptly confirmed in writing) of each Base Rate Loan and at least
three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) of each Eurodollar Loan to be made hereunder,
provided that any such notice shall be deemed to have been given on a
certain day only if given before 11:00 A.M. (New York time) on such day.
Each such written notice or written confirmation of telephonic notice
(each, a "Notice of Borrowing"), except as otherwise expressly provided in
Section 1.10, shall be irrevocable and shall be given by an Authorized
Officer of the Borrower in the form of Exhibit A, appropriately completed
to specify the aggregate principal amount of the Revolving Loans to be made
pursuant to such Borrowing, the date of such Borrowing (which shall be a
Business Day) and whether the Revolving Loans being made pursuant to such
Borrowing are to be initially maintained as Base Rate Loans or Eurodollar
Loans and, if Eurodollar Loans, the initial Interest Period to be
applicable thereto. The Agent shall promptly give each Bank notice of such
proposed Borrowing, of such Bank's proportionate share thereof and of the
other matters required by the immediately preceding sentence to be
specified in the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, an Authorized Officer of the Borrower shall give
the Swingline Bank not later than 1:00 P.M. (New York time) on the date
that a Swingline Loan is to be made, written notice (or telephonic notice
confirmed in writing) of each Swingline Loan to be made hereunder. Each
such notice shall be irrevocable and specify in each case (A) the date of
Borrowing (which shall be a Business Day) and (B) the aggregate principal
amount of Swingline Loans to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(c), with the Borrower irrevocably agreeing, by
its incurrence of any Swingline Loan, to the making of the Mandatory
Borrowings as set forth in Section 1.01(c).
(c) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice of any Borrowing of Loans, the
Agent or the Swingline Bank, as the case may be, may act without liability
upon the basis of telephonic notice of such Borrowing, believed by the
Agent or the Swingline Bank, as the case may be, in good faith to be from
an Authorized Officer of the Borrower prior to receipt of written
confirmation. In each such case, the Borrower hereby waives the right to
dispute the Agent's and the Swingline Bank's record of the terms of such
telephonic notice of such Borrowing of Loans.
1.04 Disbursement of Funds. No later than 12:00 Noon (New York
time) on the date specified in each Notice of Borrowing (or (x) in the case
of Swingline Loans, no later than the close of business on the date
specified pursuant to Section 1.03(b)(i) or (y) in case of Mandatory
Borrowings, not later than 12:00 Noon (New York time) on the date specified
in Section 1.01(c)), each Bank will make available its pro rata portion
(based on the Percentages of the Banks) of each Borrowing requested to be
made on such date (or in the case of Swingline Loans, the Swingline Bank
shall make available the full amount thereof). All such amounts shall be
made available in Dollars and in immediately available funds at the Payment
Office of the Agent, and the Agent will make available to the Borrower at
the Payment Office, in Dollars and in immediately available funds, the
aggregate of the amounts so made available by the Banks (prior to 1:00 P.M.
(New York time)) on such day, to the extent of funds actually received by
the Agent prior to 12:00 Noon (New York time) on such day. Unless the
Agent shall have been notified by any Bank prior to the date of Borrowing
that such Bank does not intend to make available to the Agent such Bank's
portion of any Borrowing to be made on such date, the Agent may assume that
such Bank has made available such amount to the Agent on such date of
Borrowing and the Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Agent by such Bank, the Agent
shall be entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay such corresponding amount forthwith upon
the Agent's demand therefor, the Agent shall promptly notify the Borrower
and the Borrower shall pay such corresponding amount to the Agent within
three Business Days following such notice. The Agent shall also be
entitled to recover on demand from such Bank or the Borrower, as the case
may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Agent to the
Borrower until the date such corresponding amount is recovered by the
Agent, at a rate per annum equal to (i) if recovered from such Bank, the
overnight Federal Funds Rate and (ii) if recovered from the Borrower, the
rate of interest applicable to the respective Borrowing, as determined
pursuant to Section 1.08. Nothing in this Section 1.04 shall be deemed to
relieve any Bank from its obligation to make Revolving Loans hereunder or
to prejudice any rights which the Borrower may have against any Bank as a
result of any failure by such Bank to make Revolving Loans hereunder.
1.05 Notes.(a) The Borrower's obligation to pay the principal
of, and interest on, the Loans made by each Bank shall be evidenced (i) if
Revolving Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-1, with blanks
appropriately completed in conformity herewith (each, a "Revolving Note"
and, collectively, the "Revolving Notes") and (ii) if Swingline Loans, by a
promissory note duly executed and delivered by the Borrower substantially
in the form of Exhibit B-2, with blanks appropriately completed in
conformity herewith (the "Swingline Note").
(b) The Revolving Note issued to each Bank shall (i) be
executed by the Borrower, (ii) be payable to the order of such Bank or its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a
stated principal amount equal to the Commitment of such Bank and be payable
in the principal amount of the Revolving Loans evidenced thereby from time
to time, (iv) mature on the Final Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base
Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby,
(vi) be subject to voluntary repayment as provided in Section 4.01 and
mandatory repayment as provided in Section 4.02 and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.
(c) The Swingline Note issued to the Swingline Bank shall (i)
be executed by the Borrower, (ii) be payable to the order of the Swingline
Bank or its registered assigns and be dated the Initial Borrowing Date,
(iii) be in a stated principal amount equal to the Maximum Swingline Amount
and be payable in the principal amount of the outstanding Swingline Loans
evidenced thereby from time to time, (iv) mature on the Swingline Expiry
Date, (v) bear interest as provided in the appropriate clause of Section
1.08 in respect of the Base Rate Loans evidenced thereby, (vi) be subject
to voluntary repayment as provided in Section 4.01 and mandatory repayment
as provided in Section 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(d) Each Bank will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will prior to
any transfer of any of its Notes endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make
any such notation shall not affect the Borrower's obligations in respect of
such Loans.
1.06 Conversions. The Borrower shall have the option to
convert, on any Business Day occurring after the Initial Borrowing Date,
all or a portion equal to at least the applicable Minimum Borrowing Amount
of the outstanding principal amount of Loans made pursuant to one or more
Borrowings of one or more Types of Loans into a Borrowing of another Type
of Loan, provided that (i) except as otherwise provided in Section 1.10(b),
Eurodollar Loans may be converted into Base Rate Loans only on the last day
of an Interest Period applicable to the Loans being converted and no
partial conversion of a Borrowing of Eurodollar Loans shall reduce the
outstanding principal amount of such Eurodollar Loans made pursuant to a
single Borrowing to less than the Minimum Borrowing Amount applicable
thereto, (ii) Base Rate Loans may only be converted into Eurodollar Loans
if no Default under Sections 10.01 or 10.05 and no Event of Default is in
existence on the date of conversion, (iii) unless the Agent has determined
that the Syndication Date has occurred, prior to the 60th day after the
Initial Borrowing Date, conversions of Base Rate Loans into Eurodollar
Loans may only be made within 5 days after the Initial Borrowing Date and
so long as any such conversion is effective on the first day of the first
Interest Period referred to in clause (y) of Section 1.01(a)(i) and so long
as such conversion does not result in a greater number of Borrowings of
Eurodollar Loans prior to the 60th day after the Initial Borrowing Date as
are permitted under Section 1.01(a)(i), (iv) no conversion pursuant to this
Section 1.06 shall result in a greater number of Borrowings of Eurodollar
Loans than is permitted under Section 1.02 and (v) Swingline Loans may not
be converted pursuant to this Section 1.06. Each such conversion shall be
effected by the Borrower by giving the Agent at its Notice Office prior to
11:00 A.M. (New York time) at least three Business Days' prior written
notice (each, a "Notice of Conversion") specifying the Revolving Loans to
be so converted, the Borrowing(s) pursuant to which such Revolving Loans
were made and, if to be converted into Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Agent shall give each Bank
prompt notice of any such proposed conversion affecting any of its
Revolving Loans.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans
under this Agreement shall be incurred from the Banks pro rata on the basis
of their Commitments; provided that all Borrowings of Revolving Loans made
pursuant to a Mandatory Borrowing shall be incurred by the Borrower from
the Banks pro rata on the basis of their Percentages. It is understood
that no Bank shall be responsible for any default by any other Bank of its
obligation to make Revolving Loans hereunder and that each Bank shall be
obligated to make the Revolving Loans provided to be made by it hereunder,
regardless of the failure of any other Bank to make its Revolving Loans
hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan made to the
Borrower from the date the proceeds thereof are made available to the
Borrower until the earlier of (i) the maturity (whether by acceleration or
otherwise) of such Base Rate Loan and (ii) the conversion of such Base Rate
Loan to a Eurodollar Loan pursuant to Section 1.06, at a rate per annum
which shall be equal to the sum of the Applicable Margin plus the Base Rate
in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan made to the Borrower from
the date the proceeds thereof are made available to the Borrower until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such
Eurodollar Loan and (ii) the conversion of such Eurodollar Loan to a Base
Rate Loan pursuant to Section 1.06, 1.09 or 1.10, as applicable, at a rate
per annum which shall, during each Interest Period applicable thereto, be
equal to the sum of the Applicable Margin plus the Eurodollar Rate for such
Interest Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount
payable hereunder shall, in each case, bear interest at a rate per annum
equal to the greater of (x) 2% per annum in excess of the rate otherwise
applicable to Base Rate Loans from time to time and (y) the rate which is
2% in excess of the rate then borne by such Loans, in each case with such
interest to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable
(i) in respect of each Base Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on the
last day of each Interest Period applicable thereto and, in the case of an
Interest Period in excess of three months, on each date occurring at three
month intervals after the first day of such Interest Period and (iii) in
respect of each Loan, on any repayment or prepayment (except voluntary and
mandatory prepayments of Swingline Loans and Revolving Loans maintained as
Base Rate Loans where the Total Commitment has not been, and is not then
being, terminated (on the amount repaid or prepaid), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Agent shall
determine the Eurodollar Rate for the respective Interest Period or
Interest Periods and shall promptly notify the Borrower and the Banks
thereof. Each such determination shall, absent manifest error, be final
and conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or
conversion into, any Eurodollar Loan (in the case of the initial Interest
Period applicable thereto) or on the third Business Day prior to the
expiration of an Interest Period applicable to such Eurodollar Loan (in the
case of any subsequent Interest Period), the Borrower shall have the right
to elect, by having an Authorized Officer of the Borrower give the Agent
notice thereof, the interest period (each, an "Interest Period") applicable
to such Eurodollar Loan, which Interest Period shall, at the option of the
Borrower (but otherwise subject to the provisions of Section 1.01(a)(i)(y)
and 1.06(iii)), be a one, two, three or six-month period or, to the extent
approved by all Banks, a nine-month or twelve-month period; provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including
the date of any conversion thereto from a Revolving Loan of a
different Type) and each Interest Period occurring thereafter in
respect of such Eurodollar Loan shall commence on the day on which
the next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan
begins on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period, such
Interest Period shall end on the last Business Day of such calendar
month;
(iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, however, that if any Interest
Period for a Eurodollar Loan would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;
(v) no Interest Period may be selected at any time when a
Default under Section 10.01 or 10.05 or any Event of Default is then
in existence; and
(vi) no Interest Period in respect of any Borrowing of
Revolving Loans shall be selected which extends beyond the Final
Maturity Date.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such
Eurodollar Loans as provided above, the Borrower shall be deemed to have
elected to convert such Eurodollar Loans into Base Rate Loans effective as
of the expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that
any Bank shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto but,
with respect to clause (i) below, may be made only by the Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for
in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loan because of (x) any change since the
date of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the
force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for example, but
not limited to: (A) a change in the basis of taxation of payment to
any Bank of the principal of or interest on the Notes or any other
amounts payable hereunder (except for changes with respect to any tax
imposed on, or measured by, the net income or net profits of such
Bank pursuant to the laws of the jurisdiction in which such Bank is
organized or in which such Bank's principal office or applicable
lending office is located or any subdivision thereof or therein), or
(B) a change in official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the extent included
in the computation of the Eurodollar Rate and/or (y) other
circumstances (other than an adverse change in the credit quality of
a given Bank) since the date of this Agreement affecting such Bank or
the interbank Eurodollar market or the position of such Bank in such
market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank
in good faith with any governmental request, order or guideline
(whether or not having force of law) or (z) impracticable as a result
of a contingency occurring after the date of this Agreement which
materially and adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent, in the case of clause
(i) above) shall promptly give notice (by telephone confirmed in writing)
to the Borrower and, except in the case of clause (i) above, to the Agent
of such determination (which notice the Agent shall promptly transmit to
each of the other Banks). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the Agent
notifies the Borrower and the Banks that the circumstances giving rise to
such notice by the Agent no longer exist, and any Notice of Borrowing or
Notice of Conversion given by the Borrower with respect to Eurodollar Loans
which have not yet been incurred (including by way of conversion) shall be
deemed, in the case of a Notice of Borrowing, to instead constitute a
Notice of Borrowing for a Borrowing of Base Rate Loans in a like principal
amount as the Eurodollar Loans requested or, in the case of a Notice of
Conversion, rescinded by the Borrower, (y) in the case of clause (ii) above
the Borrower shall pay to such Bank, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Bank in its sole
discretion shall determine) as shall be required to compensate such Bank
for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such Bank,
showing the basis for the calculation thereof, submitted to the Borrower by
such Bank in good faith shall, absent manifest error, be final and
conclusive and binding on all the parties hereto, although the failure to
give any such notice shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this Section 1.10(a) upon
the subsequent receipt of such notice) and (z) in the case of clause (iii)
above, the Borrower shall take one of the actions specified in Section
1.10(b) as promptly as possible and, in any event, within the time period
required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may
(and in the case of a Eurodollar Loan affected by the circumstances
described in Section 1.10(a)(iii) shall) either (x) if the affected
Eurodollar Loan is then being made initially or pursuant to a conversion,
cancel the respective Borrowing by giving the Agent telephonic notice
(confirmed in writing) on the same date that the Borrower was notified by
the affected Bank or the Agent pursuant to Section 1.10(a)(ii) or (iii), or
(y) if the affected Eurodollar Loan is then outstanding, upon at least
three Business Days' written notice to the Agent, require the affected Bank
to convert such Eurodollar Loan into a Base Rate Loan, provided that, (i)
any unaffected Bank shall continue to be obligated to extend its portion of
the respective Borrowing as Eurodollar Loans (unless the respective
Borrowing is cancelled or the Borrower elects to convert same into Base
Rate Loans) and (ii) if more than one Bank is affected at any time, then
all affected Banks must be treated the same pursuant to this Section
1.10(b).
(c) If at any time any Bank determines that the introduction
after the date of this Agreement of, or any change after the date of this
Agreement in, any applicable law or governmental rule, regulation, order,
guideline, directive or request (whether or not having the force of law)
concerning capital adequacy, or any change in interpretation or
administration thereof by any governmental authority, central bank or
comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's Commitment
hereunder or its obligations hereunder, then the Borrower shall pay to such
Bank, upon its written demand therefor, such additional amounts as shall be
required to compensate such Bank or such other corporation for the
increased cost to such Bank or such other corporation or the reduction in
the rate of return to such Bank or such other corporation as a result of
such increase of capital. Each Bank, upon determining that any additional
amounts will be payable pursuant to this Section 1.10(c), will give prompt
written notice thereof to the Borrower (a copy of which shall be sent by
such Bank to the Agent), which notice shall show the basis for calculation
of such additional amounts, although the failure to give any such notice
shall not release or diminish any of the Borrower's obligations to pay
additional amounts pursuant to this Section 1.10(c) upon the subsequent
receipt of such notice. A Bank's reasonable good faith determination of
compensation owing under this Section 1.10(c) shall, absent manifest error,
be final and conclusive and binding on all the parties hereto.
1.11 Compensation. The Borrower shall compensate each Bank,
upon its written request (which request shall set forth the basis for
requesting such compensation), for all losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans but excluding any loss
of anticipated profit) which such Bank may sustain: (i) if for any reason
(other than a default by such Bank or the Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date
specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by the Borrower or deemed withdrawn pursuant to
Section 1.10(a)); (ii) if any repayment (including any repayment made
pursuant to Section 4.01 or 4.02 or as a result of an acceleration of the
Loans pursuant to Section 10 or as a result of a replacement of a Bank
pursuant to Section 1.13 or 13.12(b)) or conversion of any of the
Borrower's Eurodollar Loans occurs on a date which is not the last day of
an Interest Period with respect thereto; (iii) if any prepayment of any of
the Borrower's Eurodollar Loans is not made on any date specified in a
notice of prepayment given by the Borrower; or (iv) as a consequence of (x)
any other default by the Borrower to repay its Loans when required by the
terms of this Agreement or any Note held by such Bank or (y) any election
made pursuant to Section 1.10(b). A Bank's basis for requesting
compensation pursuant to this Section 1.11 and a Bank's calculation of the
amount thereof, shall, absent manifest error, be final and conclusive and
binding on all parties hereto.
1.12 Change of Lending Office. Each Bank agrees that on the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii)
or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to
such Bank, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Bank) to designate
another lending office for any Revolving Loans or Letters of Credit
affected by such event, provided that such designation is made on such
terms that such Bank and its lending office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of such Section. Nothing in this
Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the right of any Bank provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Banks. If any Bank (x) becomes a
Defaulting Bank, (y) refuses to consent to certain proposed changes,
waivers, discharges or terminations with respect to this Agreement which
have been approved by the Required Banks as provided in Section 13.12(b) or
(z) is owed increased costs under Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 2.06 or Section 4.04 in a material amount in excess of
those being generally charged by the other Banks, the Borrower shall have
the right, in accordance with the requirements of Section 13.04(b), if no
Default or Event of Default will exist immediately after giving effect to
the respective replacement, to either replace such Bank (the "Replaced
Bank") with one or more Eligible Transferee or Eligible Transferees
(collectively, the"Replacement Bank"), none of whom shall constitute a
Defaulting Bank at the time of such replacement and each of whom shall be
reasonably acceptable to the Agent; provided, that:
(i) at the time of any replacement pursuant to this Section
1.13, the Replacement Bank shall enter into one or more Assignment
and Assumption Agreements pursuant to Section 13.04(b) (and with all
fees payable pursuant to said Section 13.04(b) to be paid by the
Replacement Bank) pursuant to which the Replacement Bank shall
acquire the Commitment and all outstanding Revolving Loans of, and
participations in Letters of Credit by, the Replaced Bank and, in
connection therewith, shall pay to (x) the Replaced Bank in respect
thereof, an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Revolving
Loans of the Replaced Bank, (B) an amount equal to all Unpaid
Drawings that have been funded by (and not reimbursed to) such
Replaced Bank, together with all then unpaid interest with respect
thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Bank pursuant to
Section 3.01, (y) the respective Issuing Bank, an amount equal to
such Replaced Bank's Percentage (in each case for this purpose,
determined as if the adjustment described in clause (y) of the
immediately succeeding sentence had been made with respect to such
Replaced Bank) of any Unpaid Drawing (which at such time remains an
Unpaid Drawing) with respect to Letters of Credit issued by such
Issuing Bank to the extent such amount was not theretofore funded by
such Replaced Bank and (z) the Swingline Bank, an amount equal to
such Replaced Bank's Percentage (in each case for this purpose,
determined as if the adjustment described in clause (y) of the
immediately succeeding sentence had been made with respect to such
Replaced Bank) of any Mandatory Borrowing to the extent such amount
was not theretofore funded by such Replaced Bank; and
(ii) all obligations of the Borrower owing to the Replaced Bank
(other than those (a) specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is
concurrently being, paid or (b) relating to the Revolving Loans
and/or the Commitment of the respective Replaced Bank which will
remain outstanding after giving effect to the respective replacement)
shall be paid in full to such Replaced Bank concurrently with such
replacement.
Upon the execution of the respective Assignment and Assumption Agreements,
the payment of amounts referred to in clauses (i) and (ii) above,
recordation of the assignment on the Register by the Agent pursuant to
Section 13.16 and, if so requested by the Replacement Bank, delivery to the
Replacement Bank of the appropriate Revolving Note or Revolving Notes
executed by the Borrower, (x) the Replacement Bank shall become a Bank
hereunder and the Replaced Bank shall cease to constitute a Bank hereunder,
except with respect to indemnification provisions under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 13.01 and
13.06), which shall survive as to such Replaced Bank and (y) the
Percentages of the Banks shall be automatically adjusted at such time to
give effect to such replacement.
SECTION 2. Letters of Credit.
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2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request an Issuing Bank, at
any time and from time to time on and after the Initial Borrowing Date and
prior to the third Business Day (or the 30th day in the case of Trade
Letters of Credit) preceding the Final Maturity Date to issue, (x) for the
account of the Borrower and for the benefit of any holder (or any trustee,
agent or other similar representative for any such holders) of L/C
Supportable Indebtedness, irrevocable standby letters of credit in a form
customarily used by such Issuing Bank or in such other form as has been
approved by such Issuing Bank (each such standby letter of credit, a
"Standby Letter of Credit") in support of such L/C Supportable Indebtedness
and (y) for the account of the Borrower and for the benefit of sellers of
goods to the Borrower or any Subsidiary Guarantor in the ordinary course of
business, irrevocable sight trade letters of credit in a form customarily
used by such Issuing Bank or in such other form as has been approved by
such Issuing Bank (each such trade letter of credit, a "Trade Letter of
Credit", and each such Standby Letter of Credit and Trade Letter of Credit,
a "Letter of Credit" and, collectively, the "Letters of Credit"). All
Letters of Credit shall be denominated in Dollars.
(b) Subject to and upon the terms and conditions set forth
herein, each Issuing Bank hereby agrees that it will, at any time and from
time to time on and after the Initial Borrowing Date and prior to the third
Business Day (or the 30th day in the case of Trade Letters of Credit)
preceding the Final Maturity Date, following its receipt of the respective
Letter of Credit Request, issue for the account of the Borrower one or more
Letters of Credit, (x) in the case of Trade Letters of Credit, in support
of trade obligations of the Borrower or any Subsidiary Guarantor that arise
in the ordinary course of business or (y) in the case of Standby Letters of
Credit, in support of such L/C Supportable Indebtedness as is permitted to
remain outstanding without giving rise to a Default or Event of Default
hereunder; provided that the respective Issuing Bank shall be under no
obligation to issue any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain such Issuing Bank from issuing such Letter of Credit or any
requirement of law applicable to such Issuing Bank or any request or
directive (whether or not having the force of law) from any
governmental authority with jurisdiction over such Issuing Bank shall
prohibit, or request that such Issuing Bank refrain from, the
issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon such Issuing Bank with respect to
such Letter of Credit any restriction or reserve or capital
requirement (for which such Issuing Bank is not otherwise
compensated) not in effect on the date hereof, or any unreimbursed
loss, cost or expense which was not applicable, in effect or known to
such Issuing Bank as of the date hereof and which such Issuing Bank
in good xxxxx xxxxx material to it;
(ii) such Issuing Bank shall have received written notice from
the Required Banks prior to the issuance of such Letter of Credit of
the type described in the last sentence of Section 2.03(b); or
(iii) a Bank Default exists, unless such Issuing Bank has
entered into arrangements satisfactory to it and the Borrower to
eliminate such Issuing Bank's risk with respect to the Bank which is
the subject of the Bank Default, including by cash collateralizing
such Bank's Percentage of the Letter of Credit Outstandings.
(c) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid on the
date of, and prior to the issuance of, the respective Letter of Credit) at
such time, would exceed either (x) $10,000,000 or (y) when added to the
aggregate principal amount of all Revolving Loans and Swingline Loans then
outstanding, an amount equal to the Total Available Commitment then in
effect, (ii)(x) each Standby Letter of Credit shall by its terms terminate
on or before the date which occurs 12 months after the date of the issuance
thereof (although any such Standby Letter of Credit may be extendable for
successive periods of up to 12 months, but not beyond the third Business
Day preceding the Final Maturity Date, on terms acceptable to the
respective Issuing Bank) and (y) each Trade Letter of Credit shall by its
terms terminate on or before the date occurring not later than 360 days
after such Trade Letter of Credit's date of issuance and (iii) (x) no
Standby Letter of Credit shall have an expiry date occurring later than the
third Business Day preceding the Final Maturity Date and (y) no Trade
Letter of Credit shall have an expiry date occurring later than 30 days
prior to the Final Maturity Date.
2.02 Minimum Stated Amount. The Stated Amount of each Letter
of Credit shall be not less than $50,000 or such lesser amount as is
acceptable to the respective Issuing Bank.
2.03 Letter of Credit Requests. (a) Whenever the Borrower
desires that a Letter of Credit be issued for its account, the Borrower
shall give the Agent and the respective Issuing Bank at least 5 days' (or
such shorter period as is acceptable to such Issuing Bank in any given
case) written notice prior to the proposed date of issuance (which shall be
a Business Day). Each notice shall be in the form of Exhibit C (each, a
"Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed
to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the
requirements of, Section 2.01(c). Unless the respective Issuing Bank has
received notice from the Required Banks before it issues a Letter of Credit
that one or more of the applicable conditions specified in Section 5 or 6,
as the case may be, are not then satisfied, or that the issuance of such
Letter of Credit would violate Section 2.01(c), then such Issuing Bank may
issue the requested Letter of Credit for the account of the Borrower in
accordance with such Issuing Bank's usual and customary practices.
2.04 Letter of Credit Participations. (a) Immediately upon
the issuance by any Issuing Bank of any Letter of Credit, such Issuing Bank
shall be deemed to have sold and transferred to each Bank, other than such
Issuing Bank (each such Bank, in its capacity under this Section 2.04, a
"Participant"), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Bank,
without recourse or warranty, an undivided interest and participation, to
the extent of such Participant's Percentage, in such Letter of Credit, each
substitute letter of credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto, and
any security therefor or guaranty pertaining thereto. Upon any change in
the Commitments or Percentages of the Banks pursuant to Section 1.13 or
13.04, it is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this Section 2.04 to reflect the new Percentages
of the assignor and assignee Bank or of all Banks, as the case may be.
(b) In determining whether to pay under any Letter of Credit,
such Issuing Bank shall have no obligation relative to the other Banks
other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under
or in connection with any Letter of Credit issued by it if taken or omitted
in the absence of gross negligence or willful misconduct, shall not create
for such Issuing Bank any resulting liability to the Borrower or any Bank.
(c) In the event that any Issuing Bank makes any payment under
any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to such Issuing Bank pursuant to Section
2.05(a), such Issuing Bank shall promptly notify the Agent, which shall
promptly notify each Participant of such failure, and each Participant
shall promptly and unconditionally pay to the Agent for the account of such
Issuing Bank the amount of such Participant's Percentage of such
unreimbursed payment in Dollars and in same day funds. If the Agent so
notifies, prior to 11:00 A.M. (New York time) on any Business Day, any
Participant required to fund a payment under a Letter of Credit, such
Participant shall make available to the Agent at the Payment Office of the
Agent for the account of the respective Issuing Bank in Dollars such
Participant's Percentage of the amount of such payment on such Business Day
in same day funds. If and to the extent such Participant shall not have so
made its Percentage of the amount of such payment available to the Agent
for the account of the respective Issuing Bank, such Participant agrees to
pay to the Agent for the account of such Issuing Bank, forthwith on demand
such amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Agent for the account of such
Issuing Bank at the overnight Federal Funds Rate. The failure of any
Participant to make available to the Agent for the account of the
respective Issuing Bank its Percentage of any payment under any Letter of
Credit issued by it shall not relieve any other Participant of its
obligation hereunder to make available to the Agent for the account of such
Issuing Bank its Percentage of any such Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for
the failure of any other Participant to make available to the Agent for the
account of such Issuing Bank such other Participant's Percentage of any
such payment.
(d) Whenever any Issuing Bank receives a payment of a
reimbursement obligation as to which the Agent has received for the account
of such Issuing Bank any payments from the Participants pursuant to clause
(c) above, such Issuing Bank shall pay to the Agent and the Agent shall
promptly pay each Participant which has paid its Percentage thereof, in
Dollars and in same day funds, an amount equal to such Participant's share
(based on the proportionate aggregate amount funded by such Participant to
the aggregate amount funded by all Participants) of the principal amount of
such reimbursement obligation and interest thereon accruing after the
purchase of the respective participations.
(e) Each Issuing Bank shall, promptly after each issuance of,
or amendment or modification to, a Standby Letter of Credit issued by it,
give the Agent, each Participant and the Borrower written notice of the
issuance of, or amendment or modification to, such Letter of Credit, which
notice shall be accompanied by a copy of such Standby Letter of Credit and
each such amendment or modification thereto.
(f) Each Issuing Bank (other than BTCo) shall deliver to the
Agent, promptly on the first Business Day of each week, by facsimile
transmission, a report setting forth the aggregate daily Stated Amount
available to be drawn under the outstanding Trade Letters of Credit issued
by such Issuing Bank for the previous week. The Agent shall, within 10
days after the last Business Day of each calendar month, deliver to each
Participant a report setting forth for such preceding calendar month the
aggregate daily Stated Amount available to be drawn under all outstanding
Trade Letters of Credit during such calendar month.
(g) The obligations of the Participants to make payments to the
Agent for the account of the respective Issuing Bank with respect to
Letters of Credit issued by it shall be irrevocable and not subject to any
qualification or exception whatsoever and shall be made in accordance with
the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which any Credit Party or any of its Subsidiaries may have at any
time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Agent, any Bank, any Issuing Bank, any
Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction
between any Credit Party or any of its Subsidiaries and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the respective Issuing Bank, by making
payment to the Agent in immediately available funds at the Payment Office
(or by making the payment directly to such Issuing Bank at such location as
may otherwise have been agreed upon by the Borrower and such Issuing Bank),
for any payment or disbursement made by such Issuing Bank under any Letter
of Credit issued by it (each such amount so paid until reimbursed, an
"Unpaid Drawing"), not later than the second Business Day after the Agent
or the Issuing Bank notifies the Borrower of such payment or disbursement,
with interest on the amount so paid or disbursed by such Issuing Bank, to
the extent not reimbursed prior to 12:00 Noon (New York time) on the date
of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date such Issuing Bank is reimbursed by the
Borrower therefor at a rate per annum which shall be the Base Rate in
effect from time to time plus the Applicable Margin for Base Rate Loans,
provided, however, to the extent such amounts are not reimbursed prior to
12:00 Noon (New York time) on the third Business Day following notice to
the Borrower by the Agent or the respective Issuing Bank of such payment or
disbursement, interest shall thereafter accrue on the amounts so paid or
disbursed by such Issuing Bank (and until reimbursed by the Borrower) at a
rate per annum which shall be the Base Rate in effect from time to time
plus the Applicable Margin for Base Rate Loans plus 2%, in each such case,
with interest to be payable on demand; provided further, that it is
understood and agreed, however, that the notices referred to above in this
clause (a) and in the immediately preceding proviso shall not be required
to be given if a Default or an Event of Default under Section 10.05 shall
have occurred and be continuing (in which case the Unpaid Drawings shall be
due and payable immediately without presentment, demand, protest or notice
of any kind (all of which are hereby waived by each Credit Party) and shall
bear interest at the rate provided in the foregoing proviso on and after
the third Business Day following the respective Drawing). The respective
Issuing Bank shall give the Borrower prompt notice of each Drawing under
any Letter of Credit, provided that the failure to give any such notice
shall in no way affect, impair or diminish the Borrower's obligations
hereunder.
(b) The obligation of the Borrower under this Section 2.05 to
reimburse the respective Issuing Bank with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which any Credit Party may have
or have had against any Bank (including in its capacity as Issuing Bank or
as Participant), including, without limitation, any defense based upon the
failure of any drawing under a Letter of Credit (each, a "Drawing") to
conform to the terms of such Letter of Credit or any nonapplication or
misapplication by the beneficiary of the proceeds of such Drawing; the
respective Issuing Bank's only obligation to the Borrower being to confirm
that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to substantially comply
on their face with requirements of such Letter of Credit; provided,
however, that the Borrower shall not be obligated to reimburse such Issuing
Bank for any wrongful payment made by such Issuing Bank under a Letter of
Credit issued by it as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Issuing Bank. Any
action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for such Issuing
Bank any resulting liability to the Borrower.
2.06 Increased Costs. If at any time after the date of this
Agreement any Issuing Bank or any Participant determines that the
introduction of or any change in any applicable law, rule, regulation,
order, guideline or request or in the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Issuing Bank or any
Participant with any request or directive by any such authority (whether or
not having the force of law) shall either (i) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement
against Letters of Credit issued by any Issuing Bank or participated in by
any Participant, or (ii) impose on any Issuing Bank or any Participant any
other conditions relating, directly or indirectly, to this Agreement or any
Letter of Credit, and the result of any of the foregoing is to increase the
cost to any Issuing Bank or any Participant of issuing, maintaining or
participating in any Letter of Credit, or reduce the amount of any sum
received or receivable by any Issuing Bank or any Participant hereunder or
reduce the rate of return on its capital with respect to Letters of Credit,
then, upon demand to the Borrower by any Issuing Bank or any Participant (a
copy of which demand shall be sent by such Issuing Bank or such Participant
to the Agent), the Borrower shall pay to such Issuing Bank or such
Participant such additional amount or amounts as will compensate such Bank
for such increased cost or reduction in the amount receivable or reduction
on the rate of return on its capital. Any Issuing Bank or any Participant,
upon determining that any additional amounts will be payable pursuant to
this Section 2.06, will give prompt written notice thereof to the Borrower,
which notice shall include a certificate submitted to the Borrower by such
Issuing Bank or such Participant (a copy of which certificate shall be sent
by such Issuing Bank or such Participant to the Agent), setting forth the
basis for the calculation of such additional amount or amounts necessary to
compensate such Issuing Bank or such Participant, although failure to give
any such notice shall not release or diminish the Borrower's obligations to
pay additional amounts pursuant to this Section 2.06. The certificate
required to be delivered pursuant to this Section 2.06 shall, absent
manifest error, be final, conclusive and binding on the Borrower.
SECTION 3. Fees; Reductions of Commitment.
------------------------------
3.01 Fees. (a) The Borrower agrees to pay to the Agent for
distribution to each Non-Defaulting Bank a commitment commission (the
"Commitment Commission") for the period from the Effective Date to but not
including the Final Maturity Date (or such earlier date as the Total
Commitment shall have been terminated), computed at a rate equal to the
Applicable Commitment Commission Percentage on the daily average Unutilized
Commitment of such Non-Defaulting Bank as in effect from time to time.
Accrued Commitment Commission shall be due and payable in arrears on each
Quarterly Payment Date and on the Final Maturity Date or such earlier date
upon which the Total Commitment is terminated.
(b) The Borrower agrees to pay to the Agent for distribution to
each Non-Defaulting Bank with a Commitment (based on their respective
Percentages) a fee in respect of each Letter of Credit issued hereunder
(the "Letter of Credit Fee"), for the period from and including the date of
issuance of such Letter of Credit to and including the date of termination
of such Letter of Credit, computed at a rate per annum equal to (i) in the
case of a Standby Letter of Credit, the Applicable Margin for Eurodollar
Loans on the daily Stated Amount of such Standby Letter of Credit and (ii)
in the case of a Trade Letter of Credit, the Trade L/C Percentage on the
daily Stated Amount of such Trade Letter of Credit. Accrued Letter of
Credit Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and upon the termination of the Total Commitment or the first
day thereafter upon which no Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the respective Issuing Bank,
for its own account, upon each payment under, issuance of, or amendment to,
any Letter of Credit, such amount as shall at the time of such event be the
administrative charge which such Issuing Bank is generally imposing in
connection with such occurrence with respect to letters of credit.
(d) The Borrower agrees to pay to the Agent, for its own
account, such other fees as have been agreed to in writing by the Borrower
and the Agent.
3.02 Voluntary Termination of Unutilized Commitments. (a)
Upon at least three Business Days' prior notice to the Agent at its Notice
Office (which notice the Agent shall promptly transmit to each of the
Banks), the Borrower shall have the right, at any time or from time to
time, without premium or penalty, to terminate the Total Unutilized
Commitment, in whole or in part, provided that (i) any partial reduction to
the Total Unutilized Commitment pursuant to this Section 3.02 shall be in
an amount of at least $500,000, and, if greater, in an integral multiple of
$100,000, (ii) any reduction to the Total Unutilized Commitment prior to
the Initial Borrowing Date may only be made in connection with a
termination in full of the Total Commitment, (iii) each such reduction
shall apply proportionately to permanently reduce the Commitment of each
Bank, and (iv) the reduction to the Total Unutilized Commitment shall in no
case be in an amount which would cause the Commitment of any Bank to be
reduced (as required by the preceding clause (iii)) by an amount which
exceeds the remainder of (x) the Unutilized Commitment of such Bank as in
effect immediately before giving effect to such reduction minus (y) such
Bank's Percentage of the aggregate principal amount of Swingline Loans then
outstanding. If at the time of any reduction to the Total Unutilized
Commitment pursuant to the preceding provisions of this Section 3.02(a) the
amount of the Blocked Commitment is in excess of $0, the Borrower may
specify (in its notice of the reduction to the Total Unutilized Commitment
pursuant to this Section 3.02(a)) that the amount of the reduction shall
also apply to reduce the amount of the Blocked Commitment as then in effect
(in which case the amount of the Blocked Commitment shall be so reduced) by
an amount equal to the lesser of (x) the amount of the Blocked Commitment
as in effect prior to the reduction pursuant to this sentence and (y) the
amount of the reduction to the Total Unutilized Commitment then being
effected pursuant to this Section 3.02(a).
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect
to this Agreement which have been approved by the Required Banks as
provided in Section 13.12(b), the Borrower may, upon five Business Days'
written notice to the Agent at its Notice Office (which notice the Agent
shall promptly transmit to each of the Banks) terminate all of the
Commitment of such Bank so long as all Revolving Loans, together with
accrued and unpaid interest, Fees and all other amounts owing to such Bank
are repaid concurrently with the effectiveness of such termination (at
which time Schedule I shall be deemed modified to reflect such changed
amounts), and at such time, such Bank shall no longer constitute a "Bank"
for purposes of this Agreement, except with respect to indemnifications
under this Agreement (including, without limitation, Sections 1.10, 1.11,
2.06, 4.04, 13.01 and 13.06), which shall survive as to such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total
Commitment (and the Commitment of each Bank) shall terminate on November
30, 1996 unless the Initial Borrowing Date has occurred on or before such
date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Commitment (and the Commitment of
each Bank) shall terminate in its entirety on the Final Maturity Date.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Effective Date upon
which the Borrower or any of its Subsidiaries receives any proceeds from
any incurrence by the Borrower or any of its Subsidiaries of Indebtedness
for borrowed money (other than Indebtedness for borrowed money permitted to
be incurred pursuant to Section 9.04 as such Section is in effect on the
Effective Date), the Total Commitment shall be reduced by an amount equal
to 100% of the Net Cash Proceeds therefrom.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date on and after the Effective Date
on which the Borrower or any of its Subsidiaries receives any proceeds from
any Recovery Event, the Total Commitment shall be reduced by an amount
equal to 100% of the proceeds of such Recovery Event (net of reasonable
costs including, without limitation, reasonable legal costs and expenses,
and the estimated marginal increase in income taxes which will be payable
by the Borrower or any of its Subsidiaries in connection with such Recovery
Event); provided that (x) so long as no Default under Section 10.01 or
10.05 and no Event of Default then exists and such proceeds do not exceed
$7,500,000, such proceeds shall not be required to be so applied on such
date to the extent that an Authorized Officer of the Borrower has delivered
a certificate to the Agent on or prior to such date stating that such
proceeds shall be used or shall be committed to be used to replace or
restore any properties or assets in respect of which such proceeds were
paid within a period specified in such certificate not to exceed 180 days
after the date of receipt of such proceeds with respect to such Recovery
Event (which certificate shall set forth the estimates of the proceeds to
be so expended) and (y) so long as no Default under Section 10.01 or 10.05
and no Event of Default then exists and to the extent that (a) the amount
of such proceeds exceeds $7,500,000, (b) the amount of such proceeds equals
100% of the cost of replacement or restoration of the properties or assets
in respect of which such proceeds were paid as determined by the Borrower
and as supported by such estimates or bids from contractors or
subcontractors or such other supporting information as the Agent may
reasonably request, (c) an Authorized Officer of the Borrower has delivered
to the Agent a certificate on or prior to the date the application would
otherwise be required pursuant to this Section 3.03(d) in the form
described in clause (x) above and also certifying its determination as
required by preceding clause (b) and certifying the sufficiency of business
interruption insurance as required by succeeding clause (d), and (d) an
Authorized Officer of the Borrower has delivered to the Agent such evidence
as the Agent may reasonably request in form and substance reasonably
satisfactory to the Agent establishing that the Borrower has sufficient
business interruption insurance and that the Borrower will be receiving
regular payments thereunder in such amounts and at such times as are
necessary to satisfy all obligations and expenses of the Borrower
(including, without limitation, all debt service requirements, including
pursuant to this Agreement) without any delay or extension thereof, for the
period from the date of the respective casualty, condemnation or other
event giving rise to the Recovery Event and continuing through the
completion of the replacement or restoration of respective properties or
assets, then the entire amount of the proceeds of such Recovery Event and
not just the portion in excess of $7,500,000 shall be deposited with the
Agent pursuant to a cash collateral arrangement reasonably satisfactory to
the Agent whereby such proceeds shall be disbursed to the Borrower from
time to time as needed to pay actual costs incurred by it in connection
with the replacement or restoration of the respective properties or assets
(pursuant to such certification requirements as may be established by the
Agent), provided further that at any time while a Default exists under
either of Sections 10.01 or 10.05 or any Event of Default has occurred and
is continuing (other than an Event of Default existing solely as a result
of the violation of either or both of Sections 9.08 and 9.09, but in each
case only if, and to the extent, that the violation of said covenant has
occurred as a result of the underlying event giving rise to the Recovery
Event), the Required Banks may direct the Agent (in which case the Agent
shall, and is hereby authorized by the Borrower to, follow said directions)
to apply any or all proceeds then on deposit in such collateral account to
the repayment of Obligations hereunder in the same manner as proceeds would
be applied pursuant to the Security Agreement, and provided further, that
if all or any portion of such proceeds not required to be applied to reduce
the Total Commitment pursuant to the second preceding proviso (whether
pursuant to clause (x) or (y) thereof) are either (A) not so used or
committed to be so used within 180 days after the date of the respective
Recovery Event or (B) if committed to be used within 180 days after the
date of receipt of such net proceeds and not so used within 18 months after
the date of the respective Recovery Event then, in either such case, such
remaining portion not used or committed to be used in the case of preceding
clause (A) and not used in the case of preceding clause (B) shall be
applied on the date which is 180 days after the date of the respective
Recovery Event in the case of clause (A) above or the date occurring 18
months after the date of the respective Recovery Event in the case of
clause (B) above as a mandatory reduction in the Total Commitment.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Commitment shall be reduced (x) on
the Receivables Facility Transaction Date, by an amount equal to the
Initial Receivables Facility Proceeds received on such date by the Borrower
and the Designated Credit Parties and (y) on each date after the
Receivables Facility Transaction Date upon which Attributed Receivables
Facility Indebtedness is incurred, by the amount (if any) by which the
aggregate Attributed Receivables Facility Indebtedness at such time exceeds
the Receivables Facility Threshold Amount as then in effect.
(f) Each reduction to the Total Commitment pursuant to this
Section 3.03 shall be applied proportionately to reduce the Commitment of
each Bank.
SECTION 4. Prepayments; Payments; Taxes.
----------------------------
4.01 Voluntary Prepayments. (a) The Borrower shall have the
right to prepay the Loans, without premium or penalty, in whole or in part
at any time and from time to time on the following terms and conditions:
(i) an Authorized Officer of the Borrower shall give the Agent
prior to 12:00 Noon (New York time) at its Notice Office (x) at least
one Business Day's prior written notice (or telephonic notice
promptly confirmed in writing) of the Borrower's intent to prepay
Base Rate Loans (or, in the case of Swingline Loans, same day written
notice, so long as such notice is given prior to 1:00 P.M. (New York
time)) and (y) at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of the Borrower's
intent to prepay Eurodollar Loans, whether Revolving Loans or
Swingline Loans shall be prepaid, the amount of such prepayment and
the Types of Loans to be prepaid and, in the case of Eurodollar
Loans, the specific Borrowing or Borrowings pursuant to which made,
which notice the Agent shall promptly transmit to each of the Banks;
(ii) each prepayment shall be in an aggregate principal amount
of at least $500,000 and, if greater, in an integral multiple of
$100,000 (or, in the case of Swingline Loans, $10,000 and, if
greater, in an integral multiple of $5,000), provided, that if any
partial prepayment of Eurodollar Loans made pursuant to any Borrowing
shall reduce the outstanding Eurodollar Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount
applicable thereto, then such Borrowing shall be converted at the end
of the then current Interest Period into a Borrowing of Base Rate
Loans and any election of an Interest Period with respect thereto
given by the Borrower shall have no force or effect;
(iii) each prepayment in respect of any Loans made pursuant to a
Borrowing shall, except as provided in clause (v) below and Section
4.01(b), be applied pro rata among such Loans;
(iv) any prepayment of Eurodollar Loans pursuant to this
Section 4.01(a) may only be made on the last day of an Interest
Period applicable thereto; and
(v) at the Borrower's election in connection with any
prepayment of Revolving Loans pursuant to this Section 4.01, such
prepayment shall not be applied to any Revolving Loan of a Defaulting
Bank.
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect
to this Agreement which have been approved by the Required Banks as
provided in Section 13.12(b), the Borrower shall have the right, upon five
Business Days' prior written notice to the Agent at its Notice Office
(which notice the Agent shall promptly transmit to each of the Banks) to
repay all Revolving Loans, together with accrued and unpaid interest, Fees,
and other amounts owing to such Bank in accordance with, and subject to the
requirements of, said Section 13.12(b), so long as (A) in the case of the
repayment of Revolving Loans of any Bank pursuant to this Section 4.01(b),
the Commitment of such Bank is terminated concurrently with such repayment
(at which time Schedule I shall be deemed modified to reflect the changed
Commitments) and (B) the consents required by Section 13.12(b) in
connection with the repayment pursuant to this Section 4.01(b) have been
obtained.
4.02 Mandatory Repayments and Cash Collateralizations. (a) On
any day on which the sum of the aggregate outstanding principal amount of
the Revolving Loans, Swingline Loans and the Letter of Credit Outstandings
exceeds the Total Available Commitment as then in effect, the Borrower
shall prepay on such day principal of Swingline Loans and after the
Swingline Loans have been repaid in full, the principal of Revolving Loans
in an amount equal to such excess. If, after giving effect to the
prepayment of all outstanding Swingline Loans and all outstanding Revolving
Loans, the aggregate amount of the Letter of Credit Outstandings exceeds
the Total Available Commitment as then in effect, the Borrower shall pay to
the Agent at the Payment Office on such date an amount of cash or Cash
Equivalents equal to the amount of such excess (up to a maximum amount
equal to the Letter of Credit Outstandings at such time), such cash or Cash
Equivalents to be held as security for all obligations of the Borrower to
Banks hereunder in a cash collateral account to be established by the
Agent.
(b) With respect to each repayment of Loans required by this
Section 4.02, the Borrower may designate the Types of Loans of the
respective Tranche which are to be repaid and, in the case of Eurodollar
Loans, the specific Borrowing or Borrowings of Revolving Loans pursuant to
which made, provided that: (i) repayments of Eurodollar Loans pursuant to
this Section 4.02 may only be made on the last day of an Interest Period
applicable thereto unless all Eurodollar Loans with Interest Periods ending
on such date of required repayment and all Base Rate Loans of the
respective Tranche have been paid in full; (ii) if any repayment of
Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount
less than the Minimum Borrowing Amount applicable thereto, such Borrowing
shall be converted at the end of the then current Interest Period into a
Borrowing of Base Rate Loans; and (iii) each repayment of Loans made
pursuant to a Borrowing shall be applied pro rata among such Loans. In the
absence of a designation by the Borrower as described in the preceding
sentence, the Agent shall, subject to the above, make such designation in
its sole discretion.
(c) Notwithstanding anything to the contrary contained in this
Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date and (ii) all Revolving Loans then outstanding
shall be repaid in full on the Final Maturity Date.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Agent for the account of the Bank or Banks entitled
thereto not later than 12:00 Noon (New York time) (or 1:00 P.M. (New York
time) in the case of Swingline Loans) on the date when due and shall be
made in Dollars in immediately available funds at the Payment Office of the
Agent. Whenever any payment to be made hereunder or under any Note shall
be stated to be due on a day which is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the
applicable rate during such extension.
4.04 Net Payments; Taxes. (a) All payments made by any Credit
Party hereunder or under any Note will be made without setoff, counterclaim
or other defense. Except as provided in Section 4.04(b), all such payments
will be made free and clear of, and without deduction or withholding for,
any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in
the second succeeding sentence, any tax imposed on or measured by the net
income or net profits of a Bank, pursuant to the laws of the jurisdiction
in which it is organized or the jurisdiction in which the principal office
or applicable lending office of such Bank is located or any subdivision
thereof or therein) and all interest, penalties or similar liabilities with
respect to such non-excluded taxes, levies, imposts, duties, fees,
assessments or other charges (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively
as "Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to
pay the full amount of such Taxes, and such additional amounts as may be
necessary so that every payment of all amounts due under this Agreement or
under any Note, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein or in such
Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Bank, upon the
written request of such Bank, for taxes imposed on or measured by the net
income or net profits of such Bank pursuant to the laws of the jurisdiction
in which such Bank is organized or in which the principal office or
applicable lending office of such Bank is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which
such Bank is organized or in which the principal office or applicable
lending office of such Bank is located and for any withholding of income or
similar taxes as such Bank shall determine are payable by, or withheld
from, such Bank in respect of such amounts so paid to or on behalf of such
Bank pursuant to the preceding sentence and in respect of any amounts paid
to or on behalf of such Bank pursuant to this sentence. The Borrower will
furnish to the Agent within 45 days after the date the payment of any Taxes
is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower. The Borrower agrees to indemnify
and hold harmless each Bank, and reimburse such Bank upon its written
request, for the amount of any Taxes so levied or imposed and paid by such
Bank.
(b) Each Bank that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Agent on or prior to the
Effective Date, or in the case of a Bank that is an assignee or transferee
of an interest under this Agreement pursuant to Section 1.13 or 13.04
(unless the respective Bank was already a Bank hereunder immediately prior
to such assignment or transfer), on the date of such assignment or transfer
to such Bank, (i) two accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001 (or successor forms) certifying
to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement
and under any Note, or (ii) if the Bank is not a "bank" within the meaning
of Section 881(c)(3)(A) of the Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete
original signed copies of Internal Revenue Service Form W-8 (or successor
form) certifying to such Bank's entitlement to a complete exemption from
United States withholding tax with respect to payments of interest to be
made under this Agreement and under any Note. In addition, each Bank
agrees that from time to time after the Effective Date, when a lapse in
time or change in circumstances renders the previous certification obsolete
or inaccurate in any material respect, it will deliver to the Borrower and
the Agent two new accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001, or Form W-8 and a Section 4.04(b)(ii)
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Bank to a continued
exemption from or reduction in United States withholding tax with respect
to payments under this Agreement and any Note, or it shall immediately
notify the Borrower and the Agent of its inability to deliver any such Form
or Certificate, in which case such Bank shall not be required to deliver
any such Form or Certificate pursuant to this Section 4.04(b).
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 13.04(b) and the immediately succeeding sentence, (x)
the Borrower shall be entitled, to the extent it is required to do so by
law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or
therein) from interest, Fees or other amounts payable hereunder for the
account of any Bank which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes to the extent that such Bank has not provided to the Borrower U.S.
Internal Revenue Service Forms that establish a complete exemption from
such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 4.04(a) to gross-up payments to be made to a Bank in
respect of income or similar taxes imposed by the United States if (I) such
Bank has not provided to the Borrower the Internal Revenue Service Forms
required to be provided to the Borrower pursuant to this Section 4.04(b) or
(II) in the case of a payment, other than interest, to a Bank described in
clause (ii) above, to the extent that such Forms do not establish a
complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere
in this Section 4.04 and except as set forth in Section 13.04(b), the
Borrower agrees to pay additional amounts and to indemnify each Bank in the
manner set forth in Section 4.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any
Taxes deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes after the Effective Date (or, if later,
the date such Bank became party to this Agreement) in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of such
Taxes.
(c) If the Borrower pays any additional amount under this
Section 4.04 to a Bank and such Bank determines in its sole discretion that
it has actually received or realized in connection therewith any refund or
any reduction of, or credit against, its Tax liabilities in or with respect
to the taxable year in which the additional amount is paid, such Bank shall
pay to the Borrower an amount that the Bank shall, in its sole discretion,
determine is equal to the net benefit, after tax, which was obtained by the
Bank in such year as a consequence of such refund, reduction or credit.
SECTION 5. Conditions Precedent to Credit Events on the Initial
Borrowing Date. The obligation of each Bank to make Revolving Loans and
the Swingline Bank to make Swingline Loans, and the obligation of each
Issuing Bank to issue Letters of Credit, on the Initial Borrowing Date, is
subject at the time of the making of such Loans or the issuance of such
Letters of Credit to the satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date (i) the Effective Date shall have occurred and (ii) there
shall have been delivered to (x) the Agent for the account of each of the
Banks, the appropriate Revolving Note executed by the Borrower and (y) the
Swingline Bank, the Swingline Note executed by the Borrower, in each case
in the amount, maturity and as otherwise provided herein.
5.02 Officer's Certificate. On the Initial Borrowing Date, the
Agent shall have received a certificate, dated the Initial Borrowing Date
and signed on behalf of the Borrower by the President or any Vice President
of the Borrower, stating all of the conditions in Sections 5.03, 5.07
through 5.12, inclusive, 5.16, 5.21, 6.01, 6.02 and 6.03 have been
satisfied on such date.
5.03 Fees, etc. On the Initial Borrowing Date, the Borrower
shall have paid to the Agent and the Banks all costs, fees and expenses
(including, without limitation, legal fees and expenses) payable to the
Agent and the Banks to the extent then due.
5.04 Opinions of Counsel. On the Initial Borrowing Date, the
Agent shall have received (i) from Xxxxx, Xxxxx & Xxxxx, special counsel to
the Credit Parties, an opinion addressed to the Agent, the Collateral Agent
and each of the Banks and dated the Initial Borrowing Date covering the
matters set forth in Exhibit E-1 and such other matters incident to the
transactions contemplated hereby as the Agent may reasonably request, (ii)
from Bryan, Cave, special counsel to the Credit Parties, an opinion
addressed to the Agent, the Collateral Agent and each of the Banks and
dated the Initial Borrowing Date covering the matters set forth in Exhibit
E-2 and such other matters incident to the transactions contemplated hereby
as the Agent may reasonably request, (iii) from counsel rendering such
opinions, reliance letters addressed to the Agent and each of the Banks and
dated the Initial Borrowing Date with respect to all legal opinions
delivered in connection with the Acquisition, with such legal opinions to
be in form and substance satisfactory to the Agent and (iv) from local
counsel satisfactory to the Agent, opinions each of which (x) shall be
addressed to the Agent, the Collateral Agent and each of the Banks and
dated the Initial Borrowing Date, (y) shall be required to be in form and
substance satisfactory to the Agent and (z) shall cover the perfection of
the security interests granted pursuant to the Security Documents and such
other matters incident to the transactions contemplated herein as the Agent
may reasonably request.
5.05 Corporate Documents; Proceedings; etc. (a) On the
Initial Borrowing Date, the Agent shall have received a certificate, dated
the Initial Borrowing Date, signed by the President or any Vice President
of each Credit Party, and attested to by the Secretary or any Assistant
Secretary of such Credit Party, in the form of Exhibit F with appropriate
insertions, together with copies of the certificate of incorporation and
by-laws (or equivalent organizational documents) of such Credit Party and
the resolutions of such Credit Party referred to in such certificate, and
the foregoing shall be acceptable to the Agent and the Required Banks.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this
Agreement and the other Documents shall be satisfactory in form and
substance to the Agent and the Required Banks, and the Agent shall have
received all information and copies of all documents and papers, including
records of corporate proceedings, governmental approvals, good standing
certificates and bring-down telegrams or facsimiles, if any, which the
Agent may have requested in connection therewith, such documents and papers
where appropriate to be certified by proper corporate or governmental
authorities.
(c) On the Initial Borrowing Date and after giving effect to
the Transaction, the capital structure (including, without limitation, the
terms of any capital stock, options, warrants or other securities issued by
Parent or any of its Subsidiaries) and management of Parent and its
Subsidiaries shall be in form and substance satisfactory to the Agent and
the Required Banks.
5.06 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Employment Agreements; Collective Bargaining
Agreements; Debt Agreements; Tax Sharing Agreements; Material Contracts.
On or prior to the Initial Borrowing Date, there shall have been delivered
to the Agent true and correct copies, certified as true and complete by an
appropriate officer of the Borrower of:
(i) all "employee benefit plans" as defined in Section 3(3) of
ERISA, any profit sharing plans and deferred compensation plans, and
any other plans or arrangements for the benefit of employees of
Parent or any of its Subsidiaries (collectively, the "Employee
Benefit Plans");
(ii) all agreements (including, without limitation,
shareholders' agreements, subscription agreements and registration
rights agreements) entered into by Parent or any of its Subsidiaries
governing the terms and relative rights of its capital stock and any
agreements entered into by shareholders relating to any such entity
with respect to its capital stock (collectively, the "Shareholders'
Agreements");
(iii) all agreements with members of, or with respect to, the
management of Parent or any of its Subsidiaries (collectively, the
"Management Agreements");
(iv) any employment agreements entered into by Parent or any of
its Subsidiaries (collectively, the "Employment Agreements");
(v) all collective bargaining agreements applying or relating
to any employee of Parent or any of its Subsidiaries (collectively,
the "Collective Bargaining Agreements");
(vi) all agreements evidencing or relating to Indebtedness of
Parent or any of its Subsidiaries which is to remain outstanding
after giving effect to the incurrence of Loans on the Initial
Borrowing Date (collectively, the "Debt Agreements");
(vii) tax sharing, tax allocation and other similar agreements
entered into by Parent or any of its Subsidiaries, including, without
limitation, the Existing Tax Sharing Agreement (collectively, the
"Tax Sharing Agreements"); and
(viii) all other material contracts and licenses of Parent and
any of its subsidiaries (collectively, the "Material Contracts");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Collective Bargaining Agreements, Debt
Agreements, Tax Sharing Agreements and Material Contracts shall be in form
and substance satisfactory to the Agent and the Required Banks and shall be
in full force and effect on the Initial Borrowing Date.
5.07 Adverse Change. Since December 31, 1995, nothing shall
have occurred (and the Banks shall have become aware of no facts,
conditions or other information not previously known) which the Agent or
the Required Banks shall reasonably determine could have a material adverse
effect as of the Initial Borrowing Date (i) on the Transaction, (ii) on the
rights or remedies of the Agent or the Banks, or on the ability of any
Credit Party to perform their respective obligations to the Agent and the
Banks or (iii) on the performance, business, operations, property, assets,
nature of assets, liabilities, condition (financial or otherwise) or
prospects of the Acquired Business, Parent, the Borrower, Parent and its
Subsidiaries taken as a whole or the Borrower and its Subsidiaries taken as
a whole.
5.08 Litigation. On the Initial Borrowing Date, no litigation
by any entity (private or governmental) shall be pending or threatened with
respect to (i) the Transaction, the making of the Loans, the issuance of
Letters of Credit, this Agreement, the other Documents or any documentation
executed in connection herewith or with respect to the Transaction or the
transactions contemplated hereby or thereby or with respect to any Existing
Indebtedness or (ii) which the Agent or the Required Banks shall reasonably
determine could have a materially adverse effect on (x) the Transaction or
on the rights or remedies of the Agent or the Banks, or on the ability of
the Credit Parties to perform their respective obligations to the Agent and
the Banks or (y) on the performance, business, operations, property,
assets, nature of assets, liabilities, condition (financial or otherwise)
or prospects of the Acquired Business, Parent, the Borrower, Parent and its
Subsidiaries taken as a whole or the Borrower and its Subsidiaries taken as
a whole.
5.09 Approvals, etc. On or prior to the Initial Borrowing
Date, (i) all necessary governmental (domestic and foreign) and third party
approvals in connection with the Credit Documents and otherwise referred to
herein or therein shall have been obtained and remain in full force and
effect and evidence thereof shall have been provided to the Agent, (ii) all
necessary material governmental (domestic and foreign) and third party
approvals in connection with the Transaction, the transactions contemplated
by the Documents (other than the Credit Documents) and otherwise referred
to therein shall have been obtained and remain in full force and effect and
evidence thereof shall have been provided to the Agent, and (iii) all
applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents or imposes
materially adverse conditions upon the consummation of the Transaction, the
making of the Loans, the issuance of Letters of Credit and the transactions
contemplated by the Documents or otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief or
other restraint pending or notified prohibiting or imposing materially
adverse conditions upon the Transaction or the making of the Loans, the
issuance of Letters of Credit or the transactions contemplated by the
Documents.
5.10 Issuance of Senior Unsecured Notes. (a) On or prior to
the Initial Borrowing Date, (i) Parent shall have received gross cash
proceeds of at least $170,000,000 from the issuance of the Senior Unsecured
Notes (it being understood that such cash proceeds shall include all
amounts directly applied to pay underwriting and placement commissions and
discounts and related fees), (ii) Parent shall have loaned on a
subordinated basis and pursuant to the Parent Subordinated Intercompany
Note as referred to in Section 5.23, the amount of the net cash proceeds
from the issuance of the Senior Unsecured Notes to the Borrower, (iii) the
Borrower shall have utilized the full amount of the subordinated
intercompany loan referred to in preceding clause (iii) to make payments
owing in connection with the Transaction prior to, or concurrently with,
the utilization of any proceeds of Loans for such purpose and (v) the
amount of such proceeds from the issuance of the Senior Unsecured Notes,
when aggregated with up to $5 million of Revolving Loans incurred on the
Initial Borrowing Date, shall be sufficient to effect the Acquisition and
the Refinancing and to pay all fees and expenses arising in connection with
Transaction.
(b) On or prior to the Initial Borrowing Date, the Agent shall
have received true and correct copies of the Senior Unsecured Note
Documents, certified as such by an appropriate officer of the Borrower,
each of which shall have been duly authorized, executed and delivered by
all parties thereto and shall be in full force and effect and in form and
substance satisfactory to the Agent and the Required Banks. The terms and
conditions of the Senior Unsecured Notes (including, without limitation,
amortization, maturities, interest rates, limitations on cash interest
payable, guaranty provisions, security therefor, covenants, defaults,
remedies, redemption provisions and change of control provisions), shall be
in form and substance satisfactory to the Agent and the Required Banks.
5.11 Consummation of the Acquisition and the Merger. (a) On
or prior to the Initial Borrowing Date, there shall have been delivered to
the Agent and the Banks true and correct copies of all Acquisition
Documents and all Merger Documents, certified as such by an officer of the
Borrower, and all terms and conditions of the Acquisition Documents and all
Merger Documents shall be in form and substance satisfactory to the Agent
and the Required Banks and shall not be amended without the consent of the
Required Banks. Each of the Acquisition and the Merger, including all of
the terms and conditions thereof, shall have been duly approved by the
board of directors and (if required by applicable law) the shareholders of
Parent, MK Group, the Borrower, Acquisition Corp., Imperial, Xxxxx and
Gear, and all Acquisition Documents and all Merger Documents shall have
been duly executed and delivered by the parties thereto and shall be in
full force and effect. The representations and warranties set forth in the
Acquisition Documents and the Merger Documents shall be true and correct in
all material respects as if made on and as of the Initial Borrowing Date,
and each of the conditions precedent to (i) Acquisition Corp.'s obligation
to consummate the Acquisition as set forth in the Acquisition Documents and
(ii) Parent's and MK Group's obligations to consummate the Merger shall
have been satisfied to the satisfaction of the Agent and the Required Banks
or waived with the consent of the Agent and the Required Banks.
(b) On the Initial Borrowing Date and concurrently with the
Credit Events then occurring, the Acquisition shall have been consummated
in accordance with all applicable law and the Acquisition Documents
(without giving effect to any amendment or modification thereof or waiver
with respect thereto unless consented to by the Agent and the Required
Banks). The total consideration (excluding the payment of fees and
expenses) in connection with the Acquisition shall not exceed the Purchase
Price. On the Initial Borrowing Date and immediately after giving effect
to the Acquisition, Acquisition Corp. shall have contributed (as an equity
contribution or in return for one or more Transaction Intercompany Notes as
described in Section 5.23(b)) that portion of the Acquired Business
acquired from Xxxxx and Gear to Xxxxx Acquisition Sub. and Gear Acquisition
Sub., respectively, in accordance with all applicable law (the "Asset
Contribution").
(c) On the Initial Borrowing Date and concurrently with the
Credit Events then occurring, the Merger shall have been consummated in
compliance with the Merger Documents and all applicable laws. No cash
consideration shall be payable in connection with the Merger.
Additionally, on the Initial Borrowing Date, (i) the certificate of merger
with respect to the Merger shall have been filed with the Secretaries of
State of the States of Delaware and Illinois and (ii) Parent shall have
contributed (as a common equity contribution) all of the capital stock of
Xxxxxx to the Borrower in accordance with all applicable law (the "MK Stock
Contribution").
5.12 Refinancing of Existing Credit Agreement. (a) On the
Initial Borrowing Date and concurrently with the Credit Events then
occurring, (i) the total commitments under the Existing Credit Agreement
shall have been terminated, and all loans thereunder shall have been repaid
in full, together with interest thereon, (ii) all other amounts owing
pursuant to the Existing Credit Agreement shall have been repaid in full,
(iii) the Existing Credit Agreement shall have been terminated and (iv) the
Agent shall have received evidence in form, scope and substance
satisfactory to it and the Required Banks that the matters set forth in
this Section 5.12 have been satisfied on such date. On the Initial
Borrowing Date and concurrently with the Credit Events then occurring, the
creditors under the Existing Credit Agreement shall have terminated and
released all security interests and Liens on the capital stock of MK Group
or any of its Subsidiaries, or any other assets owned by MK Group or any of
its Subsidiaries granted in connection with the Existing Credit Agreement.
The Agent shall have received such releases of security interests in and
Liens on the capital stock of MK Group or any of its Subsidiaries, or any
other assets owned by MK Group and its Subsidiaries, as may have been
requested by the Agent or the Required Banks, which releases shall be in
form and substance satisfactory to the Agent and the Required Banks.
Without limiting the foregoing, there shall have been delivered (w) proper
termination statements (Form UCC-3 or the appropriate equivalent) for
filing under the UCC of each jurisdiction where a financing statement (Form
UCC-1 or the appropriate equivalent) was filed with respect to MK Group or
any of its Subsidiaries in connection with the security interests created
with respect to the Existing Credit Agreement and the documentation related
thereto, (x) termination or reassignment of any security interest in, or
Lien on, any patents, trademarks, copyrights, or similar interests of MK
Group or any of its Subsidiaries on which filings have been made, (y)
terminations of all mortgages, leasehold mortgages and deeds of trust
created with respect to property of MK Group or any of its Subsidiaries, in
each case, to secure the obligations under the Existing Credit Agreement,
all of which shall be in form and substance satisfactory to the Agent and
the Required Banks, and (z) all collateral owned by MK Group or any of its
Subsidiaries in the possession of Bankers Trust Company, in its capacity as
agent under the Existing Credit Agreement or collateral agent under any
related security document or any other agent, collateral agent or trustee
for the creditors under the Existing Credit Agreement.
5.13 Pledge Agreement. On the Initial Borrowing Date, each of
the Borrower and each Domestic Subsidiary of the Borrower shall have duly
authorized, executed and delivered a Pledge Agreement in the form of
Exhibit G (as modified, supplemented or amended from time to time, the
"Pledge Agreement") and shall have delivered to the Collateral Agent, as
Pledgee, all the Pledged Securities referred to therein then owned by such
Credit Party, (x) endorsed in blank in the case of promissory notes
constituting Pledged Securities and (y) together with executed and undated
irrevocable stock powers, in the case of capital stock constituting Pledged
Securities, and the Pledge Agreement shall be in full force and effect.
5.14 Security Agreement. On the Initial Borrowing Date, each
of the Borrower and each Domestic Subsidiary of the Borrower shall have
duly authorized, executed and delivered a Security Agreement in the form of
Exhibit H (as modified, supplemented or amended from time to time, the
"Security Agreement") covering all of such Credit Party's present and
future Security Agreement Collateral, in each case together with:
(a) proper Financing Statements (Form UCC-1 or the appropriate
local equivalent) fully executed for filing under the UCC or the
appropriate local equivalent of each jurisdiction as may be necessary
or, in the opinion of the Collateral Agent, desirable to perfect the
security interests purported to be created by the Security Agreement;
(b) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, of a recent date listing all
effective financing statements that name any Credit Party, Imperial,
Xxxxx or Gear or any division or other operating unit of such Credit
Party, Imperial, Xxxxx or Gear, as debtor and that are filed in the
jurisdictions referred to in clause (a) above, together with copies
of such other financing statements (none of which shall cover the
Collateral except to the extent evidencing Permitted Liens or in
respect of which the Collateral Agent shall have received termination
statements (Form UCC-3 or the equivalent) or such other termination
statements as shall be required by local law) fully executed for
filing;
(c) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be
necessary or, in the opinion of the Collateral Agent, desirable to
perfect the security interests intended to be created by the Security
Agreement; and
(d) evidence that all other actions necessary or, in the
opinion of the Collateral Agent, desirable to perfect and protect the
security interests purported to be created by the Security Agreement
have been taken;
and the Security Agreement shall be in full force and effect.
5.15 Subsidiary Guaranty. On the Initial Borrowing Date, each
Domestic Subsidiary of the Borrower shall have duly authorized, executed
and delivered the Subsidiary Guaranty in the form of Exhibit I hereto (as
modified, supplemented or amended from time to time, the "Subsidiary
Guaranty"), and the Subsidiary Guaranty shall be in full force and effect.
5.16 Stockholders' Agreement, Subscription Agreements,
Consulting Agreements, Affiliate Leases, etc. On or prior to the Initial
Borrowing Date, the Agent and the Banks shall have received true and
correct copies of each of the JII Services Agreement, the Stockholders'
Agreement, the Management Subscription Agreement, the Director Indemnity
Agreement, each Intercompany Management Consulting Agreement, each M&G
Holdings Management Consulting Agreement, each TJC Management Services
Agreement and each Affiliate Lease, certified as such by an officer of the
Borrower, each of which shall have been duly authorized, executed and
delivered by the respective parties thereto and shall be in full force and
effect and in form and substance satisfactory (including all terms and
conditions thereof), satisfactory to the Agent and the Required Banks.
5.17 Consent Letter. On the Initial Borrowing Date, the Agent
shall have received a letter from CT Corporation System, presently located
at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, substantially in the form of
Exhibit J, indicating its consent to its appointment by each Credit Party
as its agent to receive service of process as specified in Section 13.08
and, if applicable, in the Guaranties.
5.18 Solvency Certificate; Environmental Assessments; and
Insurance Certificates. On or prior to the Initial Borrowing Date, there
shall have been delivered to the Agent:
(a) a solvency certificate addressed to the Agent and each of
the Banks and dated the Initial Borrowing Date from any Authorized
Officer of the Borrower, which solvency certificate shall be in the
form of Exhibit K (appropriately completed), expressing opinions of
value and other appropriate factual information regarding the
solvency of the Borrower (on a stand-alone basis) and the Borrower
and its Subsidiaries (on a consolidated basis), in each case after
giving effect to the Transaction and the incurrence of all financings
contemplated herein;
(b) evidence of insurance (including, without limitation,
business interruption insurance) complying with the requirements of
Section 8.03 for the business and properties of the Borrower and its
Subsidiaries (including, without limitation, the Acquired Business),
in scope, form and substance satisfactory to the Agent and the
Required Banks and naming each of the Collateral Agent, the Agent and
each Bank as an additional insured and the Collateral Agent, on
behalf of the Secured Creditors, as mortgagee/secured party and loss
payee, and stating that such insurance shall not be cancelled or
materially changed without at least 30 days' prior written notice by
the insurer to the Collateral Agent.
5.19 Existing Indebtedness. On the Initial Borrowing Date and
after giving effect to the Transaction and the Loans incurred on the
Initial Borrowing Date, neither Parent nor any of its Subsidiaries shall
have any preferred stock or Indebtedness outstanding except for (i) the
Loans, (ii) the Senior Unsecured Notes (which shall constitute Indebtedness
of Parent only), (iii) Indebtedness existing pursuant to the Earnout
Agreement, (iv) Indebtedness of Xxxxxx in an aggregate principal amount not
to exceed $90 million represented by the Existing Seller Installment Note,
(v) Indebtedness of Xxxxxx in an aggregate principal amount not to exceed
$5 million represented by the Existing Seller Subordinated Note, (vi)
Indebtedness existing pursuant to the Existing Seller Letter of Credit, the
Existing Seller Letter of Credit Collateral Agreement and the Existing
Seller Letter of Credit Agreement, (vii) Indebtedness of the Borrower
pursuant to the Parent Subordinated Intercompany Note, (viii) Indebtedness
pursuant to one or more Transaction Intercompany Notes and (ix) certain
intercompany indebtedness and other indebtedness as is listed on Schedule
VI (with the Indebtedness described in this clause (x) being herein called
"Scheduled Existing Indebtedness" and, together with the Indebtedness
described in clauses, (iv), (v) and (vi) above being herein called the
"Existing Indebtedness"), which Scheduled Existing Indebtedness shall not
exceed $25,000,000 in aggregate principal amount. On and as of the Initial
Borrowing Date, all of the Existing Indebtedness shall remain outstanding
after giving effect to the Transaction and the other transactions
contemplated hereby without any default or events of default existing
thereunder or arising as a result of the Transaction and the other
transactions contemplated hereby (except to the extent amended or waived by
the parties thereto on terms and conditions satisfactory to the Agent and
the Required Banks), and there shall not be any amendments or modifications
to the Debt Agreements other than as requested or approved by the Agent or
the Required Banks. On and as of the Initial Borrowing Date, the Agent and
the Required Banks shall be satisfied with the amount of and the terms and
conditions of all Existing Indebtedness.
5.20 Financial Statements; Pro Forma Financial Information;
Projections. (a) On or prior to the Initial Borrowing Date, the Banks
shall have received all of the financial statements referred to in Section
7.05(a) and such financial statements (i) shall be in form and substance
satisfactory to the Agent and the Required Banks and (ii) shall not
disclose any material adverse differences in the financial condition of the
Acquired Business or Parent and its Subsidiaries taken as a whole from that
previously disclosed to the Agent and the Required Banks.
(b) On or prior to the Initial Borrowing Date, the Banks shall
have received detailed consolidated financial projections, certified by the
Chief Financial Officer of the Borrower, for Parent and its Subsidiaries,
which include the projected results of the Acquired Business, and after
giving effect to the Transaction and the related financing therefor
(including the Loans and the Senior Unsecured Notes) and the other
transactions contemplated hereby, for the ten fiscal years ended after the
Initial Borrowing Date (the "Projections"), which Projections, and the
supporting assumptions and explanations thereto, shall be reasonably
satisfactory in form and substance to the Agent and the Required Banks and
shall be as set forth on Schedule IV hereto.
5.21 Existing Tax Sharing Agreement. On the Initial Borrowing
Date, each of the Borrower, Acquisition Corp., Xxxxx Acquisition Sub. and
Gear Acquisition Sub. shall have executed and delivered a counterpart to
the Existing Tax Sharing Agreement or an amendment thereto, in any such
case so as to become a party to the Existing Tax Sharing Agreement and the
Agent and the Banks shall have received true and correct copies of such
counterparts or amendments (as well as the Existing Tax Sharing Agreement),
certified as such by an officer of the Borrower, each of which shall be in
full force and effect.
5.22 Existing Seller Letter of Credit Agreement. On or prior
to the Initial Borrowing Date, Parent and Xxxxxx shall have executed and
delivered an amendment to the Existing Seller Letter of Credit Agreement in
form and substance satisfactory to the Agent and the Required Banks.
5.23 Intercompany Notes. (a) On the Initial Borrowing Date,
the Borrower shall have executed and delivered to Parent a subordinated
promissory note in the aggregate principal amount of $170 million in the
form attached hereto as Exhibit S (the "Parent Subordinated Intercompany
Note"), which promissory note shall (i) mature on November 15, 2006, (ii)
be voluntarily prepayable by the Borrower at its option (except that any
voluntary prepayment of the Parent Subordinated Intercompany Note to be
used by Parent to repay the outstanding principal of the Senior Unsecured
Notes shall be accompanied by the amount of premium to be used by Parent in
connection with such principal repayment of outstanding Senior Unsecured
Notes), (iii) contain no mandatory prepayment or acceleration provisions
and (iv) bear interest at the same rate as is payable with respect to the
Senior Unsecured Notes.
(b) In connection with the Transaction, and as consideration in
connection therewith, each of Xxxxxx, Xxxxx Acquisition Sub., Gear
Acquisition Sub., and/or Acquisition Corp. may execute and deliver to the
Borrower (or to Acquisition Corp. in the case of the promissory notes
issued by Xxxxx Acquisition Sub. and Gear Acquisition Sub.) one or more
promissory notes, in each case so long as the respective such promissory
note is pledged to the Collateral Agent pursuant to the terms of the Pledge
Agreement (with each such promissory note being herein called a
"Transaction Intercompany Note" and, collectively, the "Transaction
Intercompany Notes").
SECTION 6. Conditions Precedent to All Credit Events. The
obligation of each Bank to make Revolving Loans (including Revolving Loans
made on the Initial Borrowing Date but excluding Mandatory Borrowings made
thereafter, which shall be made as provided in Section 1.01(c)) and of the
Swingline Bank to make Swingline Loans, and the obligation of an Issuing
Bank to issue any Letter of Credit, is subject, at the time of each such
Credit Event (except as hereinafter indicated), to the satisfaction of the
following conditions:
6.01 No Default; Representations and Warranties. At the time
of each such Credit Event and also after giving effect thereto (i) there
shall exist no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Credit Documents shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on the date of the making of
such Credit Event (it being understood and agreed that any representation
or warranty which by its terms is made as of a specified date shall be
required to be true and correct in all material respects only as of such
specified date).
6.02 Adverse Change, etc. Nothing shall have occurred (and the
Banks shall have become aware of no facts or conditions not previously
known) which could reasonably be expected to have a material adverse effect
on (x) the rights or remedies of the Banks or the Agent, (y) on the ability
of the Borrower or any other Credit Party to perform its obligations to the
Banks or (z) on the performance, business, operations, property, assets,
nature of assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower, the Borrower and its Subsidiaries taken as a
whole or the Parent and its Subsidiaries taken as a whole.
6.03 Litigation. At the time of each such Credit Event and
also after giving effect thereto, no litigation by any entity (private or
governmental) shall be pending or threatened with respect to this Agreement
or any other Document or the transactions contemplated hereby or thereby or
which could reasonably be expected to have a materially adverse effect on
the performance, business, operations, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the
Borrower, the Borrower and its Subsidiaries taken as a whole or the Parent
and its Subsidiaries taken as a whole.
6.04 Notice of Borrowing; Letter of Credit Request. (a) Prior
to the making of each Loan (other than a Swingline Loan or a Mandatory
Borrowing), the Agent shall have received a Notice of Borrowing meeting the
requirements of Section 1.03(a). Prior to the making of each Swingline
Loan, the Swingline Bank shall have received the notice referred to in
Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Agent
and the respective Issuing Bank shall have received a Letter of Credit
Request meeting the requirements of Section 2.03(a).
The occurrence of the Initial Borrowing Date and the acceptance
of the benefits or proceeds of each Credit Event shall constitute a
representation and warranty by the Borrower to the Agent and each of the
Banks that all the conditions specified in Section 5 and in this Section 6
and applicable to such Credit Event exist as of that time. All of the
Notes, certificates, legal opinions and other documents and papers referred
to in Section 5 and in this Section 6, unless otherwise specified, shall be
delivered to the Agent at the Notice Office for the account of each of the
Banks and, except for the Notes, in sufficient counterparts for each of the
Banks and shall be in form and substance reasonably satisfactory to the
Banks.
SECTION 7. Representations and Warranties. In order to induce
the Banks to enter into this Agreement and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, the Borrower
makes the following representations, warranties and agreements, in each
case after giving effect to the Transaction, all of which shall survive the
execution and delivery of this Agreement and the Notes and the making of
the Loans and issuance of the Letters of Credit, with the occurrence of
each Credit Event on or after the Initial Borrowing Date being deemed to
constitute a representation and warranty that the matters specified in this
Section 7 are true and correct on and as of the Initial Borrowing Date and
on the date of each such Credit Event (it being understood and agreed that
any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only
as of such specified date):
7.01 Corporate Status. The Borrower and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in
good standing under the laws of the jurisdiction of its organization, (ii)
has the corporate power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposes to
engage and (iii) is duly qualified and is authorized to do business and is
in good standing in each jurisdiction where the conduct of its business
requires such qualifications except for failures to be so qualified which,
individually or in the aggregate, could not reasonably be expected to have
a material adverse effect on the performance, business, operations,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower or the Borrower and its
Subsidiaries taken as a whole.
7.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and perform the terms and
provisions of each of the Documents to which it is a party and has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of each of such Documents. Each Credit Party has duly
executed and delivered each of the Documents to which it is a party, and
each of such Documents constitutes the legal, valid and binding obligation
of such Credit Party enforceable in accordance with its terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or other
similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at
law).
7.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Documents to which it is a party,
nor compliance by it with the terms and provisions thereof, nor
consummation of the Transaction or the other transactions contemplated
herein or therein, (i) will contravene any provision of any applicable law,
statute, rule or regulation or any applicable order, writ, injunction or
decree of any court or governmental instrumentality, (ii) will conflict or
be inconsistent with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or
impose) any Lien (except pursuant to the Security Documents and, after same
have been entered into, the Receivables Facility Documents) upon any of the
properties or assets of (x) the Borrower or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust, credit
agreement or loan agreement, or any other agreement, contract or
instrument, to which the Borrower or any of its Subsidiaries is a party
(including, without limitation, the Existing Indebtedness) or by which it
or any of its property or assets is bound or to which it may be subject or
(y) Parent pursuant to the terms of any Senior Unsecured Note Document or
(iii) will violate any provision of the certificate of incorporation or
by-laws (or equivalent organizational documents) of Parent or any of its
Subsidiaries.
7.04 Governmental Approvals. (a) No order, consent, approval,
license, authorization or validation of, or filing, recording or
registration with (except as have been obtained or made prior to the date
when required and which remain in full force and effect), or exemption by,
any governmental or public body or authority, or any subdivision thereof,
is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Credit Document or (iii) the
legality, validity, binding effect or enforceability of any such Credit
Document.
(b) No material order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the date when required and
which remain in full force and effect), or exemption by, any governmental
or public body or authority, or any subdivision thereof, is required to
authorize, or is required in connection with, (i) the Transaction, (ii) the
execution, delivery and performance of any Document (other than any Credit
Document) or (iii) the legality, validity, binding effect or enforceability
of any such Document (other than any Credit Document).
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) (I) Each of (i) the audited combined
balance sheet of MK, Mercury and Elmco as of December 31, 1994 and the
combined statements of income, cash flows and retained earnings for the
fiscal years ended December 31, 1993 and 1994 and for the period commencing
January 1, 1995 and ending September 22, 1995 and (ii) the unaudited
combined balance sheet of MK, Mercury and Elmco at June 30, 1995 and the
related combined statements of income, cash flows and retained earnings of
MK, Mercury and Elmco for the six-month period ended as of said date,
copies of which have heretofore been delivered to each Bank, present fairly
the financial position of the respective entities on a combined basis at
the dates of said statements and the results of operations for the periods
covered thereby. All financial statements referred to in the preceding
sentence have been prepared in accordance with generally accepted
accounting principles and practices consistently applied except, in the
case of the financial statements for the periods ended September 22, 1995
and June 30, 1995, for the absence of footnotes and reserves (other than
those directly related to balance sheet assets) and normal year-end audit
adjustments.
(II) Each of (i) the audited balance sheets of the BCM Acquired
Business as of March 31, 1995 and December 31, 1995 and the related
statements of divisional operations and cash flows for the fiscal year or
the nine-month period, as the case may be, ended as of said dates, which
financial statements have been examined by Ernst & Young, certified public
accountants, who delivered an unqualified opinion with respect thereto and
(ii) the unaudited balance sheet of the BCM Acquired Business as of March
8, 1996 and the unaudited statements of divisional operations and cash
flows for the period commencing January 1, 1996 and ending March 8, 1996,
copies of which financial statements have heretofore been delivered to each
Bank, present fairly the financial position of the BCM Acquired Business at
the dates of said statements and the results of operations for the periods
covered thereby. All financial statements referred to in the preceding
sentence have been prepared in accordance with GAAP and practices
consistently applied except, in the case of the financial statements for
the period ended March 8, 1996, for the absence of footnotes and reserves
(other than those directly related to balance sheet assets) and normal
year-end audit adjustments.
(III) The audited consolidated balance sheets of Imperial for
the fiscal years ended December 31, 1994 and 1995 and the unaudited
consolidated balance sheet of Imperial at June 30, 1996 and the related
consolidated statements of income, cash flows and shareholder's equity of
Imperial for the fiscal years or six-month period, as the case may be,
ended as of said dates, which annual financial statements have been
examined by Ernst & Young LLP, certified public accountants, who delivered
an unqualified opinion with respect thereto and copies of which have
heretofore been delivered to each Bank, present fairly the financial
position of the respective entities on a consolidated basis at the dates of
said statements and the results of operations for the periods covered
thereby. All financial statements referred to in the preceding sentence
have been prepared in accordance with generally accepted accounting
principles and practices consistently applied except, in the case of the
June 30, 1996 financial statements, for the absence of footnotes and
reserves (other than those directly related to balance sheet assets) and
normal year-end audit adjustments.
(IV) Each of (i) the audited consolidated balance sheet of
Parent as of December 31, 1995 and the consolidated statements of income,
cash flows and changes in shareholder's equity for the period commencing
September 23, 1995 and ending December 31, 1995, which financial statements
have been examined by Ernst & Young, certified public accountants, who
delivered an unqualified opinion with respect thereto and (ii) the
unaudited consolidated balance sheet of Parent at June 30, 1996 and the
related consolidated statements of income, cash flows and changes in
shareholder's equity for the six-month period ended as of said date, copies
of which have heretofore been delivered to each Bank, present fairly the
financial position of the Parent on a consolidated basis at the dates of
said statements and the results of operations for the periods covered
thereby. All financial statements referred to in the preceding sentence
have been prepared in accordance with generally accepted accounting
principles and practices consistently applied except, in the case of the
June 30, 1996 financial statements, for the absence of footnotes and
reserves (other than those directly related to balance sheet assets) and
normal year-end audit adjustments.
(V) Each of (i) the unaudited pro forma (both immediately
before and after giving effect to the Transaction, the related financing
thereof (including, without limitation, the Loans and the Senior Unsecured
Notes) and the other transactions contemplated hereby and thereby)
condensed balance sheet of Parent and its Subsidiaries as of June 30, 1996,
prepared on a basis consistent with the Projections, and (ii) the pro forma
condensed statement of operations of Parent and its Subsidiaries for (x)
the fiscal years ended December 31, 1993, 1994 and 1995, (y) the six-month
periods ended June 30, 1995 and 1996 and (z) the twelve-month period ended
June 30, 1996, copies of which have heretofore been delivered to each Bank,
present a good faith estimate of the pro forma financial condition of
Parent and its Subsidiaries on a consolidated basis at the dates of said
statements and the pro forma results of operations for the periods covered
thereby (in each case both immediately before and after giving effect to
the Transaction, and the related financing thereof (including the Loans and
the Senior Unsecured Notes)).
(VI) As of the Initial Borrowing Date, since December 31, 1995
(but after giving effect to the Transaction and the BCM Transaction as if
same had occurred on such date), there has been no material adverse change
in the performance, business, operations, property, assets, nature of
assets, liabilities, condition (financial or otherwise) or prospects of the
Acquired Business, the Borrower, the Borrower and its Subsidiaries taken as
a whole or the Parent and its Subsidiaries taken as a whole.
(b) On and as of the Initial Borrowing Date, on a pro forma
basis after giving effect to the Transaction and all other transactions
contemplated by the Documents and to all Indebtedness (including, without
limitation, the Loans) being incurred or assumed, and Liens created by each
Credit Party in connection therewith, with respect to each of the Borrower
(on a stand-alone basis) and the Borrower and its Subsidiaries (on a
consolidated basis) (x) the sum of the assets, at a fair valuation, of each
of the Borrower (on a stand-alone basis) and the Borrower and its
Subsidiaries (on a consolidated basis) will exceed its debts, (y) it has
not incurred and does not intend to incur, nor believes that it will incur,
debts beyond its ability to pay such debts as such debts mature and (z) it
will have sufficient capital with which to conduct its business. For
purposes of this Section 7.05(b) "debt" means any liability on a claim, and
"claim" means (i) right to payment whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or
(ii) right to an equitable remedy for breach of performance if such breach
gives rise to a payment, whether or not such right to an equitable remedy
is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(c) Except as fully disclosed in the financial statements
delivered pursuant to Section 7.05(a), there were as of the Initial
Borrowing Date no material liabilities or obligations with respect to
Parent or any of its Subsidiaries or the Acquired Business of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether
or not due). As of the Initial Borrowing Date, the Borrower knows of no
basis for the assertion against it or Parent of any liability or obligation
of any nature that is not fully disclosed in the financial statements
delivered pursuant to Section 7.05(a) which, either individually or in the
aggregate, could reasonably be expected to be material to the Acquired
Business, Parent, the Borrower or the Borrower and its Subsidiaries taken
as a whole. As of the Initial Borrowing Date (and after giving effect to
the Transaction and the other transactions contemplated by the Documents),
none of Parent or any of its Subsidiaries will have any outstanding
Indebtedness or preferred stock other than the Loans , the Senior Unsecured
Notes, Indebtedness existing under the Earnout Agreement and the Existing
Indebtedness.
(d) On and as of the Initial Borrowing Date, the Projections
set forth on Schedule IV hereto, which include the projected results of the
Acquired Business and the BCM Acquired Business and which have been
delivered to the Agent and the Banks on or prior to the Initial Borrowing
Date, have been prepared on a basis consistent with the pro forma financial
statements referred to in Section 7.05(a)(V), and are based on good faith
estimates and assumptions made by management of the Borrower, and there are
no statements or conclusions in any of the Projections which are based upon
or include information known to the Borrower or any of its Subsidiaries to
be misleading or which fail to take into account material information
regarding the matters reported therein. On the Initial Borrowing Date, the
Borrower believes that the Projections were reasonable and attainable.
7.06 Litigation. There are no actions, suits or proceedings
pending or threatened (i) with respect to the Transaction or any Credit
Document or (ii) that could reasonably be expected to materially and
adversely affect (a) the performance, business, operations, property,
assets, nature of assets, liabilities, condition (financial or otherwise)
or prospects of the Borrower or the Borrower and its Subsidiaries taken as
a whole or (b) the rights or remedies of the Agent or the Banks or on the
ability of any Credit Party to perform its obligations to them hereunder
and under the other Credit Documents to which it is, or will be, a party.
Additionally, there does not exist any judgment, order or injunction
prohibiting or imposing material adverse conditions upon the occurrence of
any Credit Event.
7.07 True and Complete Disclosure. All factual information
(taken as a whole) furnished by or on behalf of the Borrower or any of its
Subsidiaries in writing to the Agent or any Bank (including, without
limitation, all information contained in the Documents) for purposes of or
in connection with this Agreement, the other Documents or any transaction
contemplated herein or therein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of any such Persons
in writing to the Agent or any Bank will be, true and accurate in all
material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to
make such information (taken as a whole) not misleading at such time in
light of the circumstances under which such information was provided.
7.08 Use of Proceeds; Margin Regulations. (a) Up to, but not
more than, $5 million of the proceeds of Loans shall be utilized to effect
the Acquisition and the Refinancing and to pay fees and expenses incurred
in connection with the Transaction. All other proceeds of Loans made
pursuant to this Agreement may be utilized for the general corporate and
working capital purposes of the Borrower and its Subsidiaries (including to
finance Permitted Transactions in accordance with the requirements of
Section 8.15).
(b) No part of any Credit Event (or the proceeds thereof) will
be used to purchase or carry any Margin Stock or to extend credit for the
purpose of purchasing or carrying any Margin Stock. Neither the making of
any Loan nor the use of the proceeds thereof nor the occurrence of any
other Credit Event will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System.
7.09 Tax Returns and Payments. All Federal, state and other
returns, statements, forms and reports for taxes (the "Returns") required
to be filed by or with respect to the income, properties or operations of
the Acquired Business and of the Borrower and/or any of its Subsidiaries
have been timely filed with the appropriate taxing authority. The Returns
accurately reflect all liability for taxes of the Acquired Business and of
the Borrower and its Subsidiaries, as the case may be, for the periods
covered thereby. The Acquired Business and the Borrower and each of its
Subsidiaries have paid all taxes and assessments payable by them other than
those which are not yet due and payable, and other than those contested in
good faith by appropriate proceedings and for which adequate reserves have
been established in accordance with GAAP. There is no material action,
suit, proceeding, investigation, audit, or claim now pending or threatened
by any authority regarding any taxes relating to the Acquired Business or
to the Borrower or any of its Subsidiaries. As of the Initial Borrowing
Date, neither the Acquired Business nor the Borrower or any of its
Subsidiaries has entered into an agreement or waiver or been requested to
enter into an agreement or waiver extending any statute of limitations
relating to the payment or collection of taxes of the Acquired Business or
the Borrower or any of its Subsidiaries, or is aware of any circumstances
that would cause the taxable years or other taxable periods of the Acquired
Business or the Borrower or any of its Subsidiaries not to be subject to
the normally applicable statute of limitations. Neither the Acquired
Business nor the Borrower or any of its Subsidiaries has provided, with
respect to itself or property held by it, any consent under Section 341 of
the Code.
7.10 Compliance with ERISA. Each Plan is in substantial
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan; no Plan is insolvent or in reorganization; no Plan has
an Unfunded Current Liability; no Plan has an accumulated or waived funding
deficiency or has applied for an extension of any amortization period
within the meaning of Section 412 of the Code; all contributions required
to be made with respect to a Plan have been timely made; neither the
Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has
incurred any material liability to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or
expects to incur any liability (including any indirect, contingent, or
secondary liability) under any of the foregoing Sections with respect to
any Plan; no proceedings have been instituted to terminate or appoint a
trustee to administer any Plan; no condition exists which presents a
material risk to the Borrower or any Subsidiary of the Borrower or any
ERISA Affiliate of incurring a liability to or on account of a Plan
pursuant to the foregoing provisions of ERISA and the Code; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the annual aggregate liabilities of the Borrower and its
Subsidiaries and its ERISA Affiliates to all Plans which are multiemployer
plans (as defined in Section 4001(a)(3) of ERISA) in the event of a
complete withdrawal therefrom, as of the close of the most recent fiscal
year of each such Plan ended prior to the date of the most recent Credit
Event, would not exceed $5,000,000; no lien imposed under the Code or ERISA
on the assets of the Borrower or any Subsidiary of the Borrower or any
ERISA Affiliate exists or is likely to arise on account of any Plan; and
the Borrower and its Subsidiaries may cease contributions to or terminate
any employee benefit plan maintained by any of them without incurring any
material liability.
7.11 Security Documents. (a) The provisions of the Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the
Security Agreement Collateral described therein, and the Security Agreement
creates a perfected first lien on, and security interest in, all right,
title and interest in all of the Security Agreement Collateral described
therein, subject to no other Liens (other than Permitted Liens). The
recordation of the Assignment of Security Interest in Certain U.S. Patents
and Trademarks in the form attached to the Security Agreement in the United
States Patent and Trademark Office, together with filings on Form UCC-1
made pursuant to the Security Agreement, will be effective, under
applicable law, to perfect the security interest granted to the Collateral
Agent in the trademarks and patents covered by the Security Agreement and
the recordation of the Assignment of Security Interest in Certain U.S.
Copyrights in the form attached to the Security Agreement with the United
States Copyright Office, together with filings on Form UCC-1 made pursuant
to the Security Agreement, will be effective under federal law to perfect
the security interest granted to the Collateral Agent in the copyrights
covered by the Security Agreement. Each of the Credit Parties party to the
Security Agreement has good and valid title to all of its Security
Agreement Collateral described therein, free and clear of all Liens except
those described above in this clause (a).
(b) The security interests created in favor of the Collateral
Agent, as Pledgee, for the benefit of the Secured Creditors under the
Pledge Agreement constitute first priority perfected security interests in
the Pledged Securities described in the Pledge Agreement, subject to no
security interests of any other Person. No filings or recordings are
required in order to perfect (or maintain the perfection or priority of)
the security interests created in the Pledged Securities and the proceeds
thereof under the Pledge Agreement.
(c) On and after the execution and delivery thereof, each of
the Additional Security Documents will create, as security for the
obligations purported to be secured thereby, a valid and enforceable
perfected security interest in and Lien on all of the Collateral subject
thereto, in favor of the Collateral Agent (or such other trustee as may be
required or desired under local law) for the benefit of the Secured
Creditors, superior to and prior to the rights of all third persons and
subject to no other Liens (other than Permitted Encumbrances and Permitted
Liens).
7.12 Representations and Warranties in Documents. All
representations and warranties set forth in the other Documents were true
and correct in all material respects at the time as of which such
representations and warranties were made (or deemed made) and shall be true
and correct in all material respects as of the Initial Borrowing Date as if
such representations or warranties were made on and as of such date, unless
stated to relate to a specific earlier date, in which case such
representations or warranties shall be true and correct in all material
respects as of such earlier date.
7.13 Properties. The Borrower and each of its Subsidiaries has
good and marketable title to, or a validly subsisting leasehold interest
in, all properties owned or leased by it, including all property reflected
in the consolidated balance sheets and the pro forma balance sheet referred
to in Section 7.05(A)(V) (except as sold or otherwise disposed of since the
date of such balance sheets in the ordinary course of business), free and
clear of all Liens, other than (i) as referred to in the balance sheets or
in the notes thereto or in the pro forma balance sheet or (ii) Permitted
Liens. On the Effective Date, Schedule III sets forth a true and complete
description of all Real Property owned or leased by the Borrower and/or its
Subsidiaries and sets forth the direct owner or lessee thereof and the type
of interest therein held by the Borrower or such Subsidiary.
7.14 Capitalization. On the Initial Borrowing Date and after
giving effect to the Transaction and the other transactions contemplated
hereby, the authorized capital stock of the Borrower shall consist of
10,000 shares of common stock, $0.01 par value per share (such authorized
shares of common stock, together with any subsequently authorized shares of
common stock of the Borrower, the "Borrower Common Stock"), of which 100
shares are issued and outstanding and owned by Parent. All such
outstanding shares have been duly and validly issued, are fully paid and
nonassessable and free of preemptive rights. The Borrower does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any
options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock.
7.15 Subsidiaries. (a) Prior to the consummation of the
Transaction, (i) Parent has no Subsidiaries other than the Borrower and its
Subsidiaries, (ii) MK Group has no Subsidiaries other than Xxxxxx and its
Subsidiaries, (iii) the Borrower has no Subsidiaries other than Acquisition
Corp. and its Subsidiaries, (iv) Xxxxxx has no Subsidiaries other than
Xxxxxx-Xxxxxx and (v) Acquisition Corp. has no Subsidiaries other than
Xxxxx Acquisition Sub. and Gear Acquisition Sub.
(b) On and as of the Initial Borrowing Date and after giving
effect to the consummation of the Transaction, Parent has no Subsidiaries
other than the Borrower and its Subsidiaries, and the Borrower has no
Subsidiaries other than those Subsidiaries listed on Schedule V. Schedule
V correctly sets forth, as of the Initial Borrowing Date and after giving
effect to the Transaction, the percentage ownership (direct and indirect)
of the Borrower in each class of capital stock of each of its Subsidiaries
and also identifies the direct owner thereof. All outstanding shares of
capital stock of each Subsidiary of the Borrower have been duly and validly
issued, are fully paid and non-assessable and have been issued free of
preemptive rights. No Subsidiary of the Borrower has outstanding any
securities convertible into or exchangeable for its capital stock or
outstanding any right to subscribe for or to purchase, or any options or
warrants for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of or any calls, commitments or claims of any
character relating to, its capital stock or any stock appreciation or
similar rights.
7.16 Compliance with Statutes, etc. Each of the Borrower and
its Subsidiaries is in compliance with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and
the ownership of its property (including applicable statutes, regulations,
orders and restrictions relating to environmental standards and controls),
except such noncompliances as could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the
performance, business, operations, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole.
7.17 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended.
7.18 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company"
or of a "subsidiary company" of a "holding company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
7.19 Environmental Matters. (a) Each of the Borrower and its
Subsidiaries has complied with, and on the date of each Credit Event will
be in compliance with, all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws and
neither the Borrower nor any of its Subsidiaries is liable for any material
penalties, fines or forfeitures for failure to comply with any of the
foregoing. There are no pending, past or threatened Environmental Claims
against the Borrower or any of its Subsidiaries or any Real Property owned
or operated by the Borrower or any of its Subsidiaries. There are no
facts, circumstances, conditions or occurrences on any Real Property owned
or operated by the Borrower or any of its Subsidiaries or on any property
adjoining or in the vicinity of any such Real Property that could
reasonably be expected (i) to form the basis of an Environmental Claim
against the Borrower or any of its Subsidiaries or any such Real Property
or (ii) to cause any such Real Property to be subject to any restrictions
on the ownership, occupancy, use or transferability of such Real Property
by the Borrower or any of its Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, or Released on or
from, any Real Property owned or operated by the Borrower or any of its
Subsidiaries except in compliance with all applicable Environmental Laws
and reasonably required in connection with the operation, use and
maintenance of any such Real Property by the Borrower's or such
Subsidiary's business. There are not now and never have been any
underground storage tanks located on any Real Property owned or operated by
the Borrower or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section
7.19, the representations made in this Section 7.19 shall only be untrue if
the aggregate effect of all failures and noncompliance of the types
described above could reasonably be expected to have a material adverse
effect on the performance, business, operations, property, assets, nature
of assets, liabilities, condition (financial or otherwise) or prospects of
the Borrower or the Borrower and its Subsidiaries taken as a whole.
7.20 Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably
be expected to have a material adverse effect on the performance, business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower or the Borrower and
its Subsidiaries taken as a whole. There is (i) no unfair labor practice
complaint pending or threatened against the Borrower or any of its
Subsidiaries before the National Labor Relations Board and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending or threatened against the Borrower or any of its
Subsidiaries, (ii) no strike, labor dispute, slowdown or stoppage is
pending or threatened against the Borrower or any of its Subsidiaries and
(iii) no union representation question exists with respect to the employees
of the Borrower or any of its Subsidiaries, except (with respect to any
matter specified in clause (i), (ii) or (iii) above, either individually or
in the aggregate) such as could not reasonably be expected to have a
material adverse effect on the performance, business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole.
7.21 Patents, Licenses, Franchises and Formulas. Each of the
Borrower and its Subsidiaries owns all patents, trademarks, permits,
service marks, trade names, copyrights, licenses, franchises and formulas,
or rights with respect to the foregoing, and has obtained assignments of
all leases and other rights of whatever nature, in each case reasonably
necessary for the present conduct of its business, without any known
conflict with the rights of others which, or the failure to obtain which,
as the case may be, would result in a material adverse effect on the
performance, business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower or of the Borrower
and its Subsidiaries taken as a whole.
7.22 Indebtedness. Schedule VI sets forth a true and complete
list of all Indebtedness of Parent and its Subsidiaries as of the Initial
Borrowing Date and which is to remain outstanding after giving effect to
the Transaction and the incurrence of Loans on such date (exclusive of
Indebtedness pursuant to this Agreement, the Parent Subordinated
Intercompany Note, the Transaction Intercompany Notes, the Senior Unsecured
Notes, the Earnout Agreement, the Existing Seller Installment Note, the
Existing Seller Letter of Credit, the Existing Seller Letter of Credit
Collateral Agreement, the Existing Seller Letter of Credit Agreement and
the Existing Seller Subordinated Note), which Scheduled Existing
Indebtedness shall not exceed $25,000,000 and, in each case showing the
aggregate principal amount thereof (and the aggregate amount of any undrawn
commitments with respect thereto) and the name of the respective borrower
and any other entity which directly or indirectly guaranteed such debt as
of the Initial Borrowing Date. None of the Existing Indebtedness was
incurred in connection with, or in contemplation of, the Transaction or the
other transactions contemplated hereby.
7.23 Transaction. At the time of consummation thereof, each
element of the Transaction shall have been consummated in accordance with
the terms of the Documents and all applicable laws. At the time of
consummation thereof, all material consents and approvals of, and filings
and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order
to make or consummate the Transaction in accordance with the terms of the
Documents and all applicable laws have been obtained, given, filed or taken
and are or will be in full force and effect (or effective judicial relief
with respect thereto has been obtained). All applicable waiting periods
with respect thereto have or, prior to the time when required, will have,
expired without, in all such cases, any action being taken by any competent
authority, which restrains, prevents, or imposes material adverse
conditions upon the consummation of any element of the Transaction.
Additionally, there does not exist any judgment, order or injunction
prohibiting or imposing material adverse conditions upon the consummation
of any element of the Transaction, the occurrence of any Credit Event, or
the performance by any Credit Party of its obligations under the Documents.
All actions taken by any Credit Party pursuant to or in furtherance of the
Transaction have been taken in all material respects in compliance with the
respective Documents and all applicable laws.
7.24 Special Purpose Corporations. (a) Parent was formed to
effect the Transaction and, prior to the consummation thereof, had no
significant assets or liabilities (other than the capital stock of the
Borrower and those liabilities under the Merger Documents).
(b) The Borrower was formed to effect the Acquisition and the
Refinancing and, prior to the consummation thereof, had no significant
assets or liabilities (other than the capital stock of Acquisition Corp.
and those liabilities under the Acquisition Documents).
(c) Acquisition Corp. was formed to effect the Acquisition and,
prior to the consummation thereof, had no significant assets or liabilities
(other than the capital stock of Xxxxx Acquisition Sub. and Gear
Acquisition Sub. and those liabilities under the Acquisition Documents).
(d) Xxxxx Acquisition Sub. and Gear Acquisition Sub. were
formed to effect the Asset Contribution and, prior to the consummation
thereof, had no significant assets or liabilities.
7.25 Subordinated Notes. The subordination provisions of the
Existing Seller Subordinated Note and of the Parent Subordinated
Intercompany Note are enforceable against the holders thereof, and the
Loans and all other Obligations hereunder (including, without limitation,
pursuant to the Guaranties) and under the other Credit Documents are within
the definition of "Senior Indebtedness" included in such subordination
provisions.
7.26 Insurance. Set forth on Schedule VII hereto is a true,
correct and complete summary of all insurance carried by each Credit Party
on and as of the Initial Borrowing Date, with the amounts insured set forth
therein.
SECTION 8. Affirmative Covenants. The Borrower hereby
covenants and agrees that on and after the Effective Date and until the
Total Commitment and all Letters of Credit have terminated and the Loans,
Notes and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
8.01 Information Covenants. The Borrower will furnish to the
Agent and each of the Banks:
(a) Monthly Reports. Within 30 days after the end of each
fiscal month of the Borrower, the consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such
month and the related consolidated statements of income for such
month and for the elapsed portion of the fiscal year ended with the
last day of such month, in each case, beginning with the monthly
financial statements delivered for January, 1997, setting forth
comparative figures for the corresponding month in the prior fiscal
year (provided that the comparative figures for the months ending
January, 1997 through and including December, 1997, will only include
a comparison of Consolidated EBITDA), all of which shall be certified
by an Authorized Officer of the Borrower, subject to the absence of
footnotes and reserves (other than those directly related to balance
sheet assets) and normal year-end audit adjustments.
(b) Quarterly Financial Statements. Within 45 days after the
close of the first three quarterly accounting periods in each fiscal
year of the Borrower, (i) the consolidated balance sheets of Parent
and its consolidated Subsidiaries as at the end of such quarterly
accounting period and the related consolidated and consolidating
statements of income and consolidated statements of cash flows, in
each case for such quarterly accounting period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly
accounting period, in each case, beginning with the quarterly
financial statements delivered for the first quarter of the fiscal
year ended in 1997, setting forth comparative figures for the related
periods in the prior fiscal year (provided that the comparative
figures, in the case of quarterly statements for the fiscal quarters
ending March, 1997, through and including December, 1997, will only
include a comparison of Consolidated EBITDA) and the budgeted figures
for such quarterly periods as set forth in the respective budget
delivered pursuant to Section 8.01(d), all of which shall be
certified by an Authorized Officer of the Borrower, subject to the
absence of footnotes and reserves (other than those directly related
to balance sheet assets) and normal year-end audit adjustments and
(ii) management's discussion and analysis of the important
operational and financial developments during the fiscal quarter and
year-to-date periods.
(c) Annual Financial Statements. Within 120 days after the
close of each fiscal year of the Borrower, (i) the consolidated
balance sheets of Parent and its consolidated Subsidiaries as at the
end of such fiscal year and the related consolidated and
consolidating statements of income and consolidated statement of cash
flows and stockholder's equity for such fiscal year setting forth
comparative figures for the preceding fiscal year and comparative
budgeted figures for such fiscal year as set forth in the respective
budget delivered pursuant to Section 8.01(d), and certified, in the
case of the consolidated statements, by Ernst & Young LLP or such
other independent certified public accountants of recognized national
standing acceptable to the Agent, together with a signed opinion of
such accounting firm (which opinion shall not be qualified in any
respect) stating that such financial statements present fairly in all
material respects the financial position of Parent and its
consolidated Subsidiaries as at the dates indicated and the results
of its operations and changes in its financial position for the
periods indicated in conformity with GAAP applied on a basis
consistent with prior years and that the examination by such
accounting firm in connection with such financial statements has been
made in accordance with generally accepted auditing standards, and
that in the course of its regular audit of the financial statements
of Parent and its Subsidiaries, such accounting firm obtained no
knowledge of any Default or Event of Default under any of Sections
9.08 or 9.09 which has occurred or, if in the opinion of such
accounting firm such a Default or Event of Default has occurred and
is continuing, a statement as to the nature thereof, and (ii)
management's discussion and analysis of the important operational and
financial developments during such fiscal year.
(d) Budgets. No later than 60 days after the commencement of
each fiscal year of the Borrower, budgets in form satisfactory to the
Agent (including, in any event, budgeted statements of cash flow and
budgeted debt and cash balances) for such fiscal year prepared in
reasonable detail, of the Borrower and its Subsidiaries, accompanied
by the statement of an Authorized Officer of the Borrower to the
effect that the budget is a reasonable estimate for the period
covered thereby.
(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 8.01(b) and (c), a
certificate of an Authorized Officer of the Borrower to the effect
that no Default or Event of Default has occurred and is continuing
or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof, which
certificate shall also set forth (A) the Leverage Ratio, together
with the calculations required to establish such ratio and (B) the
calculations required to establish whether the Borrower and its
Subsidiaries were in compliance with the provisions of Sections 3.03
and 9.02 through 9.10, inclusive, at the end of such fiscal quarter
or year, as the case may be.
(f) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after an officer of the Borrower or
any of its Subsidiaries obtains knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of
Default, (ii) any litigation or governmental investigation or
proceeding pending or threatened (x) against the Borrower or any of
its Subsidiaries which could reasonably be expected to materially and
adversely affect the performance, business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower or the Borrower and its Subsidiaries taken as a
whole, (y) with respect to any material Indebtedness of the Borrower
or any of its Subsidiaries or (z) with respect to any Document and
(iii) any other event which could reasonably be expected to
materially and adversely affect the performance, operations,
property, business, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower or the Borrower and its
Subsidiaries taken as a whole.
(g) Management Letters. Promptly after receipt thereof by the
Borrower or any of its Subsidiaries, a copy of any "management
letter" received by the Borrower or any of its Subsidiaries from its
certified public accountants and the management's responses thereto.
(h) Other Reports and Filings. Promptly, copies of all
financial information, proxy materials and other information and
reports, if any, which the Parent or any of its Subsidiaries shall
file with the Securities and Exchange Commission or any successor
thereto (the "SEC") and copies of all notices and reports which
Parent or any of its Subsidiaries shall deliver to holders of its
Indebtedness (including any holder of the Existing Seller Installment
Note, the Existing Seller Subordinated Note or the Senior Unsecured
Notes) pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, agent or other representative
therefor).
(i) Environmental Matters. Promptly upon, and in any event
within ten Business Days after, an officer of the Borrower or any of
its Subsidiaries obtains knowledge thereof, notice of any of the
following environmental matters (including all reasonably related
claims or liabilities) which could reasonably be expected to result
in a remedial cost to the Borrower and its Subsidiaries in excess of
$3,500,000:
(i) any pending or threatened Environmental Claim
against the Borrower or any of its Subsidiaries or any Real
Property owned or operated by the Borrower or any of its
Subsidiaries;
(ii) any condition or occurrence on or arising from any
Real Property owned or operated by the Borrower or any of its
Subsidiaries that (a) results in non-compliance by the Borrower
or any of its Subsidiaries with any applicable Environmental Law
or (b) could reasonably be expected to form the basis of an
Environmental Claim against the Borrower or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property
owned or operated by the Borrower or any of its Subsidiaries
that could reasonably be expected to cause such Real Property to
be subject to any restrictions on the ownership, occupancy, use
or transferability by the Borrower or any of its Subsidiaries of
such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any Real Property owned or operated by the Borrower
or any of its Subsidiaries as required by any Environmental Law
or any governmental or other administrative agency; provided
that in any event the Borrower shall deliver to each Bank all
notices received by it or any of its Subsidiaries from any
government or governmental agency under, or pursuant to,
Environmental Law.
All such notices shall describe in reasonable detail the nature of
the claim, investigation, condition, occurrence or removal or
remedial action and the Borrower's or such Subsidiary's response or
proposed response thereto. In addition, the Borrower and any of its
Subsidiaries will provide the Agent with copies of all material
communications with any government or governmental agency relating to
Environmental Laws, all material communications with any Person
relating to Environmental Claims, and such detailed reports of any
Environmental Claim as may be requested by the Agent or the Required
Banks.
(j) Annual Meetings with Banks. At the request of the Agent,
the Borrower shall within 120 days after the close of each fiscal
year of the Borrower, hold a meeting (at a mutually agreeable
location and time) with all of the Banks at which meeting shall be
reviewed the financial results of the previous fiscal year and the
financial condition of Parent and its Subsidiaries and the budgets
presented for the current fiscal year of the Borrower and its
Subsidiaries.
(k) Receivables Facility Transaction Date. The Borrower shall
provide the Agent 15 Business Days' prior written notice of the
Receivables Facility Transaction Date.
(l) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to
Parent or its Subsidiaries as the Agent or any Bank (through the
Agent) may reasonably request.
8.02 Books, Records and Inspections. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries in conformity with GAAP and
all requirements of law shall be made of all dealings and transactions in
relation to its business and activities. The Borrower will, and will cause
each of its Subsidiaries to, permit officers and designated representatives
of the Agent or any Bank to visit and inspect, at the Agent's or such
Bank's own expense, as the case may be, during regular business hours, upon
reasonable advance notice and under guidance of officers of the Borrower or
such Subsidiary, any of the properties of the Borrower or any of its
Subsidiaries, and to examine the books of account of the Borrower and any
of its Subsidiaries and discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries with, and be advised as to the same
by, its and their respective officers and independent accountants, all at
such times and intervals and to such extent as the Agent or any Bank may
reasonably request.
8.03 Maintenance of Property; Insurance. (a) The Borrower
will, and will cause each of its Subsidiaries to (i) keep all property
necessary in its business in good working order and condition, (ii)
maintain, with financially sound and reputable insurance companies,
insurance on all its property (including all property acquired pursuant to
the Acquisition but excluding property insurance on motor vehicles at any
time owned by the Borrower and its Subsidiaries) in at least such amounts
and against at least such risks as is consistent and in accordance with
industry practice and (iii) furnish to the Agent and each Bank, upon
written request, full information as to the insurance carried. In addition
to the requirements of the immediately preceding sentence, the Borrower
will at all times cause insurance of the types described in Schedule VII to
be maintained (with the same scope of coverage as that described in
Schedule VII) at levels which are at least as great as the respective
amount described opposite the respective type of insurance on Schedule VII
under the column headed "Minimum Amount Required to Be Maintained".
Subject to the exclusion for motor vehicles described above, such insurance
shall include physical damage insurance on all real and personal property
(whether now owned or hereafter acquired) on an all risk basis, covering
the full repair and replacement costs of all such property and business
interruption insurance for the actual loss sustained. The provisions of
this Section 8.03 shall be deemed supplemental to, but not duplicative of,
the provisions of any Security Documents that require the maintenance of
insurance.
(b) The Borrower will, and will cause each of its Subsidiaries
to, at all times keep the respective property of the Borrower and its
Subsidiaries insured in favor of the Collateral Agent, and all policies
(including Mortgage Policies) or certificates with respect to such
insurance (and any other insurance maintained by, or on behalf of, the
Borrower or any Subsidiary of the Borrower) (i) shall be endorsed to the
Collateral Agent's satisfaction for the benefit of the Collateral Agent
(including, without limitation, by naming the Collateral Agent as
mortgagee/secured party and loss payee in respect of casualty loss policies
and naming the Collateral Agent, the Agent and each Bank as an additional
insured with respect to all liability policies), (ii) shall state that such
insurance policies shall not be cancelled or materially changed without at
least 30 days' prior written notice thereof by the respective insurer to
the Collateral Agent and (iii) shall be deposited with the Collateral
Agent.
(c) If the Borrower or any of its Subsidiaries shall fail to
maintain all insurance in accordance with this Section 8.03, or if the
Borrower or any of its Subsidiaries shall fail to so name the Collateral
Agent, the Agent and/or each Bank as an additional insured, mortgagee or
loss payee, as the case may be, or so deposit all certificates with respect
thereto, the Agent and/or the Collateral Agent shall have the right (but
shall be under no obligation) to procure such insurance, and the Borrower
agrees to reimburse the Agent or the Collateral Agent, as the case may be,
for all costs and expenses of procuring such insurance.
8.04 Corporate Franchises. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done, all things necessary
to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses and patents; provided, however, that
nothing in this Section 8.04 shall prevent (i) transactions permitted in
accordance with the applicable requirements of Section 9.02 or (ii) the
withdrawal by the Borrower or any of its Subsidiaries of its qualification
as a foreign corporation in any jurisdiction where such withdrawal could
not reasonably be expected to have a material adverse effect on the
performance, business, operations, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole.
8.05 Compliance with Statutes, etc. The Borrower will, and
will cause each of its Subsidiaries to, comply with all applicable
statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, except such
noncompliances as could not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the performance, business,
operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower or the Borrower and its
Subsidiaries taken as a whole or a material adverse effect on the ability
of any Credit Party to perform its obligations under any Credit Document to
which it is a party.
8.06 Compliance with Environmental Laws. (a) The Borrower
will comply, and will cause each of its Subsidiaries to comply, in all
material respects with all Environmental Laws applicable to the ownership
or use of its Real Property now or hereafter owned or operated by the
Borrower or any of its Subsidiaries, will promptly pay or cause to be paid
all costs and expenses incurred in connection with such compliance, and
will keep or cause to be kept all such Real Property free and clear of any
Liens imposed pursuant to such Environmental Laws. Neither the Borrower
nor any of its Subsidiaries will generate, use, treat, store, Release or
dispose of, or permit the generation, use, treatment, storage, Release or
disposal of Hazardous Materials on any Real Property now or hereafter owned
or operated by the Borrower or any of its Subsidiaries, or transport or
permit the transportation of Hazardous Materials to or from any such Real
Property except for Hazardous Materials used or stored at any such Real
Properties in compliance (excluding non-compliances which, individually and
in the aggregate, could not reasonably be expected to have a material
adverse effect on the performance, business, operations, property, assets,
nature of assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower or the Borrower and its Subsidiaries taken as a
whole) with all applicable Environmental Laws and reasonably required in
connection with the operation, use and maintenance of any such Real
Property.
(b) At the written request of the Agent or the Required Banks,
which request shall specify in reasonable detail the basis therefor, at any
time and from time to time, the Borrower will provide, at its sole cost and
expense, an environmental site assessment report concerning any Real
Property now or hereafter owned or operated by the Borrower or any of its
Subsidiaries, prepared by an environmental consulting firm approved by the
Agent, addressing the matters in clause (i), (ii) or (iii) below which
gives rise to such request (or, in the case of a request pursuant to
following clause (i), addressing such matter as may be requested by the
Agent or the Required Banks) and estimating the range of the potential
costs of any removal, remedial or other corrective action in connection
with any such matter, provided that in no event shall such request be made
unless (i) an Event of Default has occurred and is continuing, (ii) the
Banks receive notice under Section 8.01(i) for any event for which notice
is required to be delivered for any such Real Property or (iii) the Agent
or the Required Banks reasonably believe that there was a breach of any
representation, warranty or covenant contained in Section 7.19 or 8.06(a).
If the Borrower fails to provide the same within 60 days after such request
was made, the Agent may order the same, and the Borrower shall grant and
hereby grants, to the Agent and the Banks and their agents access to such
Real Property and specifically grants, the Agent and the Banks and their
agents an irrevocable non-exclusive license, subject to the rights of
tenants, to undertake such an assessment, all at the Borrower's expense.
8.07 ERISA. As soon as possible and, in any event, within 10
days after the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the
following, the Borrower will deliver to each of the Banks a certificate of
the Chief Financial Officer of the Borrower setting forth details as to
such occurrence and the action, if any, that the Borrower, such Subsidiary
or such ERISA Affiliate is required or proposes to take, together with any
notices required or proposed to be given to or filed with or by the
Borrower, such Subsidiary, such ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred; that an accumulated funding deficiency has
been incurred or an application may be or has been made to the Secretary of
the Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan;
that a contribution required to be made to a Plan has not been timely made;
that a Plan has been or may be terminated, reorganized, partitioned or
declared insolvent under Title IV of ERISA; that a Plan has an Unfunded
Current Liability giving rise to a lien under ERISA or the Code; that
proceedings may be or have been instituted to terminate or appoint a
trustee to administer a Plan; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a
Plan; that the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate will or may incur any liability (including any indirect,
contingent, or secondary liability) to or on account of the termination of
or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971,
4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA; or
that the Borrower, or any Subsidiary of the Borrower may incur any material
liability pursuant to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any
employee pension benefit plan (as defined in Section 3(2) of ERISA) (except
for distributions under discretionary tax-qualified profit sharing plans).
The Borrower will deliver to each of the Banks a complete copy of the
annual report (Form 5500) of each Plan (including, to the extent required,
the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information) required
to be filed with the Internal Revenue Service. In addition to any
certificates or notices delivered to the Banks pursuant to the first
sentence hereof, copies of annual reports and any material notices received
by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate with
respect to any Plan shall be delivered to the Banks no later than 10 days
after the date such report has been filed with the Internal Revenue Service
or such notice has been received by the Borrower, such Subsidiary or such
ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. The Borrower shall
cause (i) each of its, and its Parent's and each of its Subsidiaries',
fiscal years to end on December 31, and (ii) each of its, and each of its
Parent's and its Subsidiaries, to maintain fiscal quarters consistent
therewith.
8.09 Performance of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, deed of trust, indenture, loan agreement or credit
agreement and each other material agreement, contract or instrument by
which it is bound, except such non-performances as could not, individually
or in the aggregate, reasonably be expected to have a material adverse
effect on the performance, business, operations, property, assets, nature
of assets, liabilities, condition (financial or otherwise) or prospects of
the Borrower or the Borrower and its Subsidiaries taken as a whole.
8.10 Payment of Taxes. The Borrower will, and will cause each
of its Subsidiaries to, pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or
profits, or upon any properties belonging to it, in each case on a timely
basis, and all lawful claims for sums that have become due and payable
which, if unpaid, might become a lien or charge upon any properties of the
Borrower or any such Subsidiary; provided that neither the Borrower nor any
such Subsidiary shall be required to pay any such tax, assessment, charge,
levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with GAAP.
8.11 Additional Security; Further Assurances; etc. (a) The
Borrower will, and will cause each of its Wholly-Owned Domestic
Subsidiaries to, grant to the Collateral Agent, for the benefit of the
Secured Creditors, security interests and mortgages in such assets and
properties of the Borrower or such Wholly-Owned Domestic Subsidiary (other
than Excluded Collateral) as are not covered by the Security Documents, and
as may be requested from time to time by the Agent or the Required Banks
(collectively, the "Additional Security Documents"). All such security
interests and mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Agent and shall
constitute valid and enforceable perfected security interests and mortgages
superior to and prior to the rights of all third Persons and subject to no
other Liens except for Permitted Liens or Permitted Encumbrances. The
Additional Security Documents or instruments related thereto shall have
been duly recorded or filed in such manner and in such places as are
required by law to establish, perfect, preserve and protect the Liens in
favor of the Collateral Agent required to be granted pursuant to the
Additional Security Documents and all taxes, fees and other charges payable
in connection therewith shall have been paid in full. Notwithstanding the
foregoing, this Section 8.11(a) shall not apply to (I) any Leasehold (other
than any MK Leasehold) from any lessor if (i) the fair market value of such
Leasehold (as determined in good faith by senior management of the
Borrower) is less than $5,000,000 or (ii) the Borrower or such Wholly-Owned
Subsidiary, as the case may be, shall be required to pay any consideration
or expenses (other than de minimis amounts) or incur any material
obligation or suffer any undue burden in connection with the grant of a
security interest in such Leasehold and (II) any MK Leasehold which by its
terms prevents the respective lessee from granting a security interest
therein, provided that each of Xxxxxx and BCM Holdings shall use its
reasonable efforts to obtain memoranda of lease (in recordable form) and
consents to leasehold mortgages in respect of the MK Leaseholds and, in the
event Xxxxxx or BCM Holdings is successful in its effort to obtain any such
memorandum or consent, Xxxxxx or BCM Holdings, as the case may be, shall
deliver to the Collateral Agent (i) a fully executed counterpart of
Mortgage in form and substance satisfactory to the Collateral Agent,
together with evidence that a counterpart of such Mortgage has been
delivered to the title insurance company insuring the lien on such Mortgage
for recording in all places to the extent necessary or, in the opinion of
the Collateral Agent, desirable to effectively create a valid and
enforceable first priority mortgage lien on such MK Leasehold in favor of
the Collateral Agent (or such other trustee as may be required or desired
under local law) for the benefit of the Secured Creditors and (ii) a
Mortgage Policy on such MK Leasehold issued by such title insurer
satisfactory to the Collateral Agent in amounts satisfactory to the
Collateral Agent, assuring the Collateral Agent that the Mortgage on such
MK Leasehold is a valid and enforceable first priority mortgage lien on
such MK Leasehold, free and clear of all defects and encumbrances except
Permitted Encumbrances and such Mortgage Policy (w) shall otherwise be in
form and substance satisfactory to the Collateral Agent, (x) shall include
(as appropriate) an endorsement for future advances under this Agreement
and the Notes and for any other matter that the Collateral Agent may
request, (y) shall not include an exception for mechanics' liens or
creditors' rights and (z) shall provide for affirmative insurance and such
reinsurance (including direct access agreements) as the Collateral Agent
may request. The parties hereto agree and understand that if a security
interest is not required to be granted in the respective Leasehold by
reason of the provisions of the preceding sentence, no Default or Event of
Default shall arise under this Agreement as a result of any failure to
grant said security interest.
(b) The Borrower will, and will cause each of its Subsidiaries
to, at the expense of the Borrower, make, execute, endorse, acknowledge,
file and/ or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, powers of attorney,
certificates, real property surveys, reports and other assurances or
instruments and take such further steps relating to the Collateral covered
by any of the Security Documents as the Collateral Agent may reasonably
require pursuant to this Section 8.11. Furthermore, the Borrower shall
cause to be delivered to the Collateral Agent such opinions of counsel,
Required Appraisals satisfying the requirements of applicable law, mortgage
policies, title insurance and other related documents as may be reasonably
requested by the Collateral Agent to assure itself that this Section 8.11
has been complied with.
(c) The Borrower agrees that each action required by preceding
clauses (a) and (b) of this Section 8.11 shall be completed as soon as
possible, but in no event later than 90 days of the date such action is
requested to be taken by the Agent or the Required Banks.
(d) To the extent the Borrower (directly or indirectly)
creates, establishes or acquires any Subsidiary after the Initial Borrowing
Date in accordance with the other provisions of this Agreement (including,
without limitation, pursuant to a Permitted Transaction), (w) each such new
Wholly-Owned Domestic Subsidiary (and each Non-Wholly-Owned Domestic
Subsidiary, to the extent same will be consolidated with the Borrower for
federal income tax purposes) shall be required to become a party to the
Existing Tax Sharing Agreement by executing a counterpart thereof or by
entering into an amendment thereto satisfactory to the Agent, (x) each such
Wholly-Owned Domestic Subsidiary (but including the Receivables Entity)
shall be required to become a party to the Subsidiary Guaranty by executing
a counterpart thereof or by entering into an amendment thereto satisfactory
to the Agent, (y) each such Non-Wholly-Owned Domestic Subsidiary (but
including the Receivables Entity) shall be required to become a party to
the Non-Wholly-Owned Subsidiary Guaranty by executing a counterpart thereof
or by entering into an amendment thereto satisfactory to the Agent and (z)
each such Wholly-Owned Domestic Subsidiary shall be required to become a
party to each of the Security Agreement and the Pledge Agreement by
executing a counterpart thereof or by entering into an amendment thereto
satisfactory to the Agent and all of the capital stock or other equity
interests of such new Subsidiary owned by the Borrower or any of its
Wholly-Owned Domestic Subsidiaries and all of the capital stock or other
equity interests owned by such new Subsidiary (subject, in the case of the
capital stock of a Foreign Subsidiary owned by such new Subsidiary, to the
provisions of Section 8.16 and the terms of the Pledge Agreement which
limit the percentage of voting stock of Foreign Subsidiaries required to be
pledged) shall be pledged to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Pledge Agreement. In connection with the
foregoing, to the extent requested by the Agent or the Collateral Agent,
such Subsidiary shall be required to deliver such relevant documentation
(including opinions of counsel, UCC-1 Financing Statements and officer's
certificates) of the type described in Section 5 as the respective
Subsidiary would have delivered if it were a Credit Party on the Initial
Borrowing Date. The Borrower agrees that each action required to be taken
pursuant to this clause (d) shall be completed contemporaneously with the
creation, establishment or acquisition of such Subsidiary. In addition to
the foregoing, all other Pledged Securities acquired after the Effective
Date by any Credit Party which is a party to the Pledge Agreement shall, to
the extent required by the Pledge Agreement, be delivered to the Collateral
Agent for pledge pursuant to the Pledge Agreement. All security interests
created by each such new Subsidiary becoming party to the Security
Documents shall (except as otherwise consented to by the Agent and the
Banks) constitute valid and enforceable perfected security interests,
subject to the provisions of the respective Security Document prior to the
rights of all third Persons and subject to no other Liens except Permitted
Liens. The Security Documents and other instruments related thereto shall
be duly recorded or filed in such manner and in such places as are required
by law to establish, perfect, preserve and protect the Liens, in favor of
the Collateral Agent for the benefit of the Secured Creditors, required to
be granted pursuant to the respective Security Documents and all taxes,
fees and other charges payable in connection therewith shall be paid in
full by the Borrower.
(e) At any time and from time to time to the extent that the
Banks, the Agent or the Collateral Agent request in order to fulfill the
requirements of any applicable statute, regulation or order of any
governmental body, to preserve, protect, enforce or realize upon the
security interests granted to the Secured Creditors pursuant to the
Security Documents, the Borrower will, and will cause each of its
Subsidiaries to, cooperate with and promptly take all actions necessary to
assist the Banks, the Agent and the Collateral Agent, including, without
limitation, to make, execute, acknowledge, file and/or deliver to the
Banks, the Agent or the Collateral Agent, as the case may be, such
information, documents, certificates, reports and other assurances or
instruments, which the Banks, the Agent or the Collateral Agent, as the
case may be, deems appropriate or advisable to comply with such statutes,
regulations or orders so as to preserve, protect, enforce or realize upon
such security interests granted to the Secured Creditors.
(f) In the event that the Agent or the Required Banks at any
time after the Effective Date determine in their sole discretion (whether
as a result of a position taken by an applicable bank regulatory agency or
official, or otherwise) that real estate appraisals satisfying the
requirements set forth in 12 C.F.R., Part 34-Subpart C, or any successor or
similar statute, rule, regulation, guideline or order (any such appraisal a
"Required Appraisal") are or were required to be obtained, or should be
obtained, in connection with any Mortgaged Property or Mortgaged
Properties, then, within 60 days after receiving written notice thereof
from the Agent or the Required Banks, as the case may be, the Borrower
shall cause such Required Appraisal to be delivered, at the expense of the
Borrower, to the Agent, which Required Appraisal, and the respective
appraiser, shall be satisfactory to the Agent.
8.12 Maintenance of Corporate Separateness. The Borrower will,
and will cause each of its Subsidiaries to, satisfy customary corporate
formalities, including the maintenance of corporate records. Furthermore,
neither the Borrower nor any of its Subsidiaries shall take any action, or
conduct its affairs in a manner, which is likely to result in the corporate
existence of the Borrower or any Subsidiary of the Borrower being ignored,
or in the assets and liabilities of the Borrower or any Subsidiary of the
Borrower being substantively consolidated with those of any other Person in
a bankruptcy, reorganization or other insolvency proceeding.
8.13 Use of Proceeds. All proceeds of the Loans shall be used
as provided in Section 7.08.
8.14 UCC Searches. On or prior to the 90th day following the
Initial Borrowing Date, the Borrower shall, or shall cause its Subsidiaries
to, deliver to the Agent (at the Borrower's own cost) copies of UCC-11's,
or equivalent reports, verifying that all financing statements necessary
or, in the opinion of the Collateral Agent desirable, to perfect the
security interest purported to be created by the Security Documents shall
have been properly recorded and filed.
8.15 Permitted Transactions. (a) Subject to the provisions of
this Section 8.15 applicable thereto and the requirements contained in the
definition of Permitted Acquisition or Permitted Acquisition Investment, as
the case may be, the Borrower and its Subsidiaries may from time to time
after the Initial Borrowing Date effect Permitted Transactions, so long as:
(i) the Borrower or such Subsidiary shall have given the Agent
and the Banks at least 10 Business Days (or such shorter period as
the Required Banks may agree) prior written notice of any such
Permitted Transaction (each such notice, a "Permitted Transaction
Notice"), which notice shall (v) contain the estimated date such
Permitted Transaction is scheduled to be consummated, (w) attach a
true and correct copy of any theretofore executed purchase agreement,
letter of intent, or similar agreement executed by the Borrower or
such Subsidiary and the seller in connection with such Permitted
Transaction (or to the extent such agreements have not yet been
executed, drafts thereof to the extent then available in a form
suitable, as determined by the Borrower, for distribution to the
Banks), (x) contain the estimated purchase price of such Permitted
Transaction and the intended method of financing thereof, (y) contain
a description of the stock, assets, Permitted Earn-Out Debt,
Permitted Debt, Incentive Arrangements and/or Permitted Acquired Debt
expected to be incurred, acquired or assumed in connection with such
Permitted Transaction and (z) to the extent the Borrower is, at the
time the notice is given, in a position to make a reasonable estimate
thereof, contain the Borrower's estimate of any Restructuring Costs
anticipated to be incurred in connection with the respective
Permitted Transaction;
(ii) not later than 5 Business Days after the consummation of
the respective Permitted Transaction, the Borrower shall have
certified to the Agent and the Banks (u) the amount of cash to be
paid in respect of such Permitted Transaction, including for this
purpose any amounts to be placed in escrow or similar arrangements by
the Borrower or such Subsidiary and the amount of any post-closing
adjustment as then estimated by the Borrower which would increase the
amount of cash to be paid in respect of such Permitted Transaction
(but ignoring any post-closing adjustment which the Borrower
estimates will result in a reduction to the amount of cash to be
paid), and the sources thereof, (v) without duplication of the
amounts described in preceding clause (u), the Borrower's good faith
estimate of the amount of fees and expenses which will be payable by
the Borrower or such Subsidiary in respect of such Permitted
Transaction (including, without limitation, any amounts payable
pursuant to the TJC Management Services Agreements in connection
therewith), (w) the description of all Permitted Debt and/or
Permitted Acquired Debt to be incurred, acquired or assumed in
connection with such Permitted Transaction and the aggregate
principal amounts thereof, (x) the description of all Incentive
Arrangements and Permitted Earn-Out Debt to be issued in connection
with such Permitted Transaction, (y) the Borrower's estimate of the
maximum amount of all Restructuring Costs which it believes are
reasonably likely to be incurred in the 12 months following the
respective Permitted Transaction and as a result thereof or in
connection therewith (such amount, as certified with respect to any
Permitted Transaction, being herein called the "Certified
Restructuring Cost Reserve" with respect thereto) and (z) that,
except as described above, (A) there are no other amounts or
consideration which will be payable in connection with the respective
Permitted Transaction at the time of the consummation thereof, and
(B) there are no other material (in relation to the size of the
respective Permitted Transaction) amounts which could reasonably be
expected to be payable after the consummation of the respective
Permitted Transaction by the Borrower, such Subsidiary or any of
their respective Subsidiaries in connection with the respective
Permitted Transaction or pursuant to any of the documentation
executed in connection therewith;
(iii) with respect to each Permitted Acquisition, the Permitted
Transaction Cost thereof shall not exceed $25,000,000;
(iv) with respect to each Permitted Acquisition Investment, the
Permitted Transaction Cost thereof shall not exceed the Permitted
Investment Amount;
(v) with respect to each Permitted Transaction, the
consideration paid therefor shall consist solely of the items
described in preceding clause (ii) and the certificate delivered
pursuant thereto;
(vi) with respect to each Permitted Transaction, no Default or
Event of Default shall be in existence at the time of the
consummation of such Permitted Transaction or immediately after
giving effect thereto;
(vii) all representations and warranties contained herein and in
the other Credit Documents shall be true and correct in all material
respects with the same effect as though such representations and
warranties had been made on and as of the date of such Permitted
Transaction (both before and after giving effect thereto), unless
stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date;
(viii) as soon as available but not later than 5 days after the
execution thereof, a copy of the executed purchase agreement or
similar agreement with respect to such Permitted Transaction;
(ix) the Borrower shall have certified to the Agent and the
Banks that the proposed Permitted Transaction shall not be reasonably
likely to result in material increased tax (after taking into account
payments to be received under the Existing Tax Sharing Agreement (and
the respective newly-acquired Subsidiary's ability to pay same)),
ERISA, environmental or other contingent liabilities (excluding
pursuant to Incentive Arrangements and Permitted Earn-Out Debt as
described in the certificate delivered pursuant to preceding clause
(ii) and Restructuring Costs consistent with the Certified
Restructuring Cost Reserve for the respective Permitted Transaction
as certified pursuant to preceding clause (ii)) on the Borrower or on
the Borrower and its Subsidiaries taken as a whole;
(x) recalculations are made by the Borrower of compliance with
the covenants contained in Sections 9.08 and 9.09 for the period of
four consecutive fiscal quarters (taken as one accounting period)
most recently ended prior to the date of such Permitted Transaction
(each, a "Calculation Period"), on a Pro Forma Basis as if the
respective Permitted Transaction (as well as all other Permitted
Transactions theretofore consummated after the first day of such
Calculation Period) had occurred on the first day of such Calculation
Period, and such recalculations shall show that all such covenants
would have been complied with if the Permitted Transaction had
occurred on the first day of such Calculation Period;
(xi) the Borrower in good faith believes, based on calculations
made by the Borrower, on a Pro Forma Basis after giving effect to the
respective Permitted Transaction, that the financial covenants
contained in such Sections 9.08 and 9.09 will continue to be met for
the one-year period following the date of the consummation of the
respective Permitted Transaction; and
(xii) not later than the date of the consummation of the
respective Permitted Transaction, the Borrower shall furnish the
Agent and the Banks an officer's certificate executed by an
Authorized Officer of the Borrower, certifying on behalf of the
Borrower as to compliance with the requirements of preceding clauses
(i) through (xi) and containing the pro forma calculations required
by preceding clauses (x) and (xi).
(b) At the time of each Permitted Transaction involving the
creation or acquisition of a Subsidiary, or the acquisition of capital
stock or other equity interest of any Person, all capital stock or other
equity interests thereof created or acquired in connection with such
Permitted Transaction (to the extent owned by the Borrower or one or more
of its Domestic Subsidiaries) shall be pledged to the Collateral Agent for
the benefit of the Secured Creditors pursuant to the Pledge Agreement in
accordance with requirements of Section 8.11.
(c) The Borrower shall cause each Subsidiary which is formed to
effect, or is acquired pursuant to, a Permitted Transaction to comply with,
and to execute and deliver, all of the documentation required by, Sections
8.11 and 9.13, to the satisfaction of the Agent.
(d) The consummation of each Permitted Transaction shall be
deemed to be a representation and warranty by the Borrower that the
certifications by it (or by one or more of its Authorized Officers)
pursuant to Section 8.15(a) are true and correct and that all conditions
thereto have been satisfied and that same is permitted in accordance with
the terms of this Agreement, which representation and warranty shall be
deemed to be a representation and warranty for all purposes hereunder,
including without limitation, Sections 6 and 10.
8.16 Foreign Subsidiaries Security. (a) If following a change
in the relevant sections of the Code or the regulations, rules, rulings,
notices or other official pronouncements issued or promulgated thereunder,
counsel for the Borrower acceptable to the Agent and the Required Banks
does not within 30 days after a request from the Agent or the Required
Banks deliver evidence, in form and substance satisfactory to the Agent and
the Required Banks, with respect to any Foreign Subsidiary which has not
already had all of its stock or promissory notes pledged pursuant to the
Pledge Agreement, that a pledge (x) of 65% or more of the total combined
voting power of all classes of capital stock of such Foreign Subsidiary
entitled to vote and (y) of any promissory note issued by such Foreign
Subsidiary to the Borrower or any of its Domestic Subsidiaries, in any such
case would cause the undistributed earnings of such Foreign Subsidiary as
determined for Federal income tax purposes to be treated as a deemed
dividend to such Foreign Subsidiary's United States parent for Federal
income tax purposes, then in the case of a failure to deliver the evidence
described above, that portion of such Foreign Subsidiary's outstanding
capital stock or any promissory notes so issued by such Foreign Subsidiary,
in each case not theretofore pledged pursuant to the Pledge Agreement shall
be pledged to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Pledge Agreement (or another pledge agreement in
substantially similar form, if needed).
(b) If following a change in the relevant sections of the Code
or the regulations, rules, rulings, notices or other official
pronouncements issued or promulgated thereunder, counsel for the Borrower
acceptable to the Agent delivers evidence, in form and substance
satisfactory to the Agent and the Required Banks, with respect to any
Foreign Subsidiary which has had any portion of its stock or promissory
notes pledged pursuant to the Pledge Agreement, that a pledge (x) of any
portion of the total combined voting power of all classes of capital stock
of such Foreign Subsidiary entitled to vote and (y) of any promissory note
issued by such Foreign Subsidiary to the Borrower or any of its Domestic
Subsidiaries, in any such case would cause the undistributed earnings of
such Foreign Subsidiary as determined for Federal income tax purposes to be
treated as a deemed dividend to such Foreign Subsidiary's United States
parent for Federal income tax purposes, then the Collateral Agent shall
release that portion of such Foreign Subsidiary's outstanding capital stock
or any promissory notes so issued by such Foreign Subsidiary, in each case
pledged pursuant to the Pledge Agreement, as may be required to ensure that
the undistributed earnings of such Foreign Subsidiary shall not be treated
as a deemed dividend to such Foreign Subsidiary's United States parent for
Federal income tax purposes.
8.17 Receivables Facility Transaction. At any time after the
Effective Date, the Borrower and/or one or more other Designated Credit
Parties may enter into a Receivables Facility (which complies with the
definition of Receivables Facility contained herein) to provide off-balance
sheet financing to the Borrower for the sale of Receivables Facility Assets
to a Receivables Entity (which shall be established in accordance with, and
meet the requirements of, the definition of Receivables Entity contained
herein), so long as (x) on the Receivables Facility Transaction Date all
requirements of this Section 8.17 have been satisfied and the Receivables
Facility and related transactions comply with the respective defined terms
as used in this Section 8.17 and (y) in the case of any replacement or
modification of the Receivables Facility after the entering into thereof,
same shall satisfy the requirements of Section 9.10. The Borrower hereby
agrees that, at the time it initially establishes the Receivables Facility
it shall (and that it shall only enter into the Receivables Facility if),
on the Receivables Facility Transaction Date, (i) have caused to be
delivered to the Agent and the Required Banks true and correct copies of
all Receivables Facility Documents, certified as such by an officer of the
Borrower, and all of the terms and conditions of the Receivables Facility
Documents shall be in form and substance reasonably satisfactory to the
Agent and the Required Banks, (ii) the Receivables Facility Transaction,
including all of the terms and conditions thereof, shall have been duly
approved by the board of directors of the Borrower, and all Receivables
Facility Documents shall be in full force and effect, (iii) each of the
conditions precedent to the consummation of the transactions contemplated
by the Receivables Facility Documents shall have been satisfied and not
waived except with the consent of the Agent and the Required Banks to the
reasonable satisfaction of the Agent and the Required Banks, (iv) each of
the representations and warranties of the Designated Credit Parties and the
Receivables Entity contained in the Receivables Facility Documents shall be
true and correct in all material respects, (v) the transactions
contemplated by the Receivables Facility Documents shall have been
consummated in all material respects in accordance with all applicable law
and the Receivables Facility Documents, (vi) no Default or Event of Default
shall be in effect upon the Receivables Facility Transaction Date (either
before or after giving effect to the transactions contemplated by the
Receivables Facility Documents) and (vii) the Borrower and/or the other
Designated Credit Parties shall have received the Receivables Facility
Proceeds and used the same to make any prepayment and/or satisfy any cash
collateral requirement required under Section 4.02(a) as a result of the
reduction to the Total Commitment on such date under Section 3.03(f).
SECTION 9. Negative Covenants. The Borrower hereby covenants
and agrees that on and after the Effective Date and until the Total
Commitment and all Letters of Credit have terminated and the Loans, Notes
and Unpaid Drawings, together with interest, Fees and all other Obligations
incurred hereunder and thereunder, are paid in full:
9.01 Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets (real or personal, tangible or
intangible) of the Borrower or any of its Subsidiaries, whether now owned
or hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable with recourse to
the Borrower or any Subsidiary of the Borrower), or assign any right to
receive income or permit the filing of any financing statement under the
UCC or any other similar notice of Lien under any similar recording or
notice statute, provided that the provisions of this Section 9.01 shall not
prevent the creation, incurrence, assumption or existence of the following
(Liens described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or Liens for taxes,
assessments or governmental charges or claims being contested in good
faith and by appropriate proceedings for which adequate reserves, if
applicable, have been established in accordance with GAAP;
(ii) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Indebtedness for
borrowed money, such as carriers', warehousemen's, materialmen's and
mechanics' liens and other similar Liens arising in the ordinary
course of business, and (x) which do not in the aggregate materially
detract from the value of the Borrower's or such Subsidiary's
property or assets or materially impair the use thereof in the
operation of the business of the Borrower or such Subsidiary or (y)
which are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or
sale of the property or assets subject to any such Lien;
(iii) Liens in existence on the Effective Date which are listed,
and the property subject thereto described, in Schedule VIII, but
only to the respective date, if any, set forth in such Schedule VIII
for the removal and termination of any such Liens, but no renewals or
extensions of such Liens shall be permitted;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Credit Documents;
(vi) Liens created by leases or subleases granted by the
Borrower or any of its Subsidiaries to other Persons in the ordinary
course of business not materially interfering with the conduct of the
business of the Borrower or any of its Subsidiaries;
(vii) Liens upon assets of the Borrower or any of its
Subsidiaries subject to Capitalized Lease Obligations to the extent
such Capitalized Lease Obligations are permitted by Section
9.04(iii), provided that (x) such Liens only serve to secure the
payment of Indebtedness arising under such Capitalized Lease
Obligation and (y) the Lien encumbering the asset giving rise to the
Capitalized Lease Obligation does not encumber any other asset of the
Borrower or any of its Subsidiaries;
(viii) Liens (including extensions, renewals and replacements
thereof) upon property acquired (the "Acquired Property") after the
Effective Date, provided that (w) any such Lien is created solely for
the purpose of securing Indebtedness representing, or issued to
finance, refinance or refund, the cost (including the cost of
construction) of the Acquired Property, (x) the principal amount of
the Indebtedness secured by such Lien does not exceed 100% of the
cost of the Acquired Property, (y) such Lien does not extend to or
cover any property other than the Acquired Property and any
improvements on such Acquired Property, and (z) the issuance of the
Indebtedness to purchase the Acquired Property is permitted under
Section 9.04(iii);
(ix) easements, rights-of-way, restrictions, encroachments and
other similar charges or encumbrances, and minor title deficiencies,
in each case not securing Indebtedness and not materially interfering
with the conduct of the business of the Borrower or any of its
Subsidiaries;
(x) Liens arising from precautionary UCC financing statement
filings regarding operating leases entered into by the Borrower or
any of its Subsidiaries in the ordinary course of business;
(xi) statutory and common law landlords' liens under leases to
which the Borrower or any of its Subsidiaries is a party;
(xii) Liens (other than Liens created or imposed under ERISA) on
the property of the Borrower or any of its Subsidiaries incurred or
deposits made in the ordinary course of business but not incurred in
connection with Indebtedness for borrowed money, in connection with
(x) workers' compensation, unemployment insurance and other types of
social security, or (y) securing the performance of tenders,
statutory obligations, surety bonds, bids, leases, statutory bonds,
government contracts, performance and return-of-money bonds, warranty
and other similar obligations incurred in the ordinary course of
business (exclusive of obligations in respect of the payment for
borrowed money) or (z) deposits made in the ordinary course of
business to secure liability for premiums to insurance carriers,
provided that the aggregate amount of deposits, cash and fair market
value of the property encumbered by liens described in clauses (y)
and (z) hereof at any time pursuant to this clause (xii) shall not
exceed $3,000,000 in the aggregate;
(xiii) inchoate Liens arising from judgments, decrees or
attachments in circumstances not constituting an Event of Default
under Section 10.09, provided that no cash or other property shall be
pledged by the Borrower or any of its Subsidiaries as security
therefor;
(xiv) Liens on property or assets acquired pursuant to a
Permitted Acquisition, or on property or assets of a Subsidiary of
the Borrower in existence at the time such Subsidiary is acquired
pursuant to a Permitted Transaction, in each case securing Permitted
Acquired Debt, provided that (x) such Liens do not attach to the
capital stock of any Subsidiary of the Borrower and (y) such Liens
existed prior to, and were not incurred in contemplation of, such
Permitted Transaction and do not attach to any other asset of the
Borrower or any of its Subsidiaries;
(xv) Liens created pursuant to the Existing Seller Letter of
Credit Collateral Agreement consisting of cash and Cash Equivalents
of Xxxxxx in an amount not to exceed $90,000,000 and any investment
income with respect thereto (prior to the distribution of same
pursuant to the Existing Seller Letter of Credit Collateral
Agreement) securing the reimbursement obligations of Xxxxxx in
respect of the Existing Seller Letter of Credit (with such collateral
being herein called the "Existing Seller Letter of Credit Cash
Collateral");
(xvi) Liens arising pursuant to Permitted Sale-Leaseback
Transactions to the extent permitted by Section 9.02(xi), so long as
such Liens do not attach to any assets of the Borrower or any of its
Subsidiaries other than those which are the subject of such Permitted
Sale-Leaseback Transaction;
(xvii) Liens securing refinancing Indebtedness incurred pursuant
to Section 9.04(xvi), so long as such Indebtedness is incurred in
compliance with said Section, the Liens secure only the respective
issue of refinancing Indebtedness and the Liens extend only to the
property originally subject to Liens securing the Indebtedness being
refinanced or renewed pursuant to said Section 9.04(xvi);
(xviii) Liens created for the benefit of the XX Xxxxxxx in the
Elmco Refund;
(xix) Liens (x) granted by the Designated Credit Parties in
favor of the Receivables Entity consisting of UCC-1 financing
statements filed to effect the sale of Receivables Facility Assets
pursuant to the Receivables Facility Documents, (y) granted by the
Receivables Entity on those Receivables Facility Assets acquired by
it pursuant to the Receivables Facility Documents to the extent that
such Liens are created by the Receivables Facility Documents and (z)
consisting of the right of setoff granted to any financial
institution acting as a lockbox bank in connection with the
Receivables Facility;
(xx) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods; and
(xxi) additional Liens incurred by the Borrower and its
Subsidiaries, so long as the value of the property subject to such
Liens, and any Indebtedness and other obligations secured thereby, do
not exceed $10,000,000.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
The Borrower will not, and will not permit any of its Subsidiaries to, wind
up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of all
or any part of its property or assets, or enter into any partnerships,
joint ventures, sale-leaseback transactions, or purchase or otherwise
acquire (in one or a series of related transactions) any part of the
property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of
any Person or agree to do any of the foregoing at any future time, except
that:
(i) Capital Expenditures (including payments in respect of
Capitalized Lease Obligations, but excluding Capital Expenditures
which may arise as a result of the purchase of any capital stock or
equity interests in any other Person or by means of a purchase of
assets constituting a business, division or product line of any
Person, which expenditures may only be made pursuant to Permitted
Transactions effected in accordance with the relevant provisions of
this Agreement) by the Borrower and its Subsidiaries shall be
permitted so long as same do not cause a violation of any of the
other provisions of this Agreement;
(ii) the Borrower and any of its Subsidiaries may sell, lease
(as lessor) or otherwise dispose of assets (other than in a Permitted
Sale-Leaseback Transaction and excluding capital stock of
Subsidiaries) which, in the reasonable opinion of such Person, are
obsolete, uneconomic or no longer useful in the conduct of such
Person's business, provided that (w) each such sale or disposition
shall be for an amount at least equal to the fair market value
thereof (as determined in good faith by senior management of the
Borrower), (x) each such sale results in consideration at least 75%
of which (taking the amount of cash and the fair market value, as
determined by the Borrower in good faith, of any non-cash
consideration, although in the case of any non-cash consideration
received in the form of indebtedness, the amount thereof shall be
deemed to be the greater of such fair market value thereof or
principal amount thereof) shall be in the form of cash (although, for
purposes of this clause (x), there shall be treated as cash
consideration the amount of any trade payables and the principal
amount of Indebtedness for borrowed money assumed by the respective
purchaser of assets), (y) the aggregate Net Cash Proceeds of all
assets sold or otherwise disposed of pursuant to this clause (ii)
after the Effective Date shall not exceed $5,000,000 in the aggregate
and (z) the Net Cash Proceeds from each Asset Sale pursuant to this
clause (ii) shall be used to make any prepayment under Section 4.02
as a result of the required reduction, if any, to the Total Available
Commitment or shall be reinvested to the extent permitted by the
terms of the definition of Blocked Commitment.
(iii) Investments may be made to the extent permitted by Section
9.05;
(iv) each of the Borrower and each of its Subsidiaries may
lease (as lessee) real or personal property in the ordinary course of
business so long as any such lease does not create a Capitalized
Lease Obligation, except to the extent permitted by clause (i) of
this Section 9.02;
(v) Restricted Payments may be paid to the extent permitted by
Section 9.03;
(vi) the Acquisition, the Merger, the Asset Contribution and
the MK Stock Contribution shall be permitted;
(vii) each of the Borrower and its Subsidiaries may make sales
of inventory in the ordinary course of business;
(viii) the Borrower and its Subsidiaries may effect Permitted
Transactions in accordance with the requirements of Section 8.15;
(ix) any Wholly-Owned Domestic Subsidiary of the Borrower
(other than the Receivables Entity) may be merged or consolidated
with and into, or be liquidated or dissolved voluntarily into, the
Borrower or any other Wholly-Owned Domestic Subsidiary of the
Borrower (other than the Receivables Entity); provided that (w) no
Default or Event of Default then exists or would result therefrom,
(x) the surviving corporation of any such merger with the Borrower is
the Borrower, (y) any such Wholly-Owned Domestic Subsidiary which is
so merged or consolidated with and into, or liquidated or dissolved
voluntarily into, the Borrower or another Wholly-Owned Domestic
Subsidiary of the Borrower shall not have any material indebtedness
or other material liabilities (contingent or otherwise), and (z) the
security interests, if any, granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents
in the assets of such Subsidiary so merged shall remain in full force
and effect and perfected (to at least the same extent as in effect
immediately prior to such merger, consolidation or liquidation);
(x) any Subsidiary of the Borrower may convey or otherwise
transfer all or any part of its business, properties or assets (but
not any indebtedness or other liabilities (contingent or otherwise))
to the Borrower or any Wholly-Owned Domestic Subsidiary of the
Borrower (other than the Receivables Entity); provided that the
security interests granted to the Collateral Agent for the benefit of
the Secured Creditors pursuant to the Security Documents in the
assets so transferred shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior
to such transfer);
(xi) the Borrower or any of its Subsidiaries may effect
Permitted Sale-Leaseback Transactions in accordance with the
definition thereof; provided that the sum (without duplication) of
(w) the aggregate amount of all proceeds received by the Borrower and
its Subsidiaries from all Permitted Sale-Leaseback Transactions
consummated on and after the Effective Date plus (x) the aggregate
outstanding amount of Indebtedness evidenced by all Capitalized Lease
Obligations (excluding Indebtedness evidenced by Capitalized Lease
Obligations arising from Permitted Sale-Leaseback Transactions the
proceeds of which were included pursuant to preceding clause (w))
incurred on and after the Effective Date plus (y) the aggregate
outstanding principal amount of all purchase money Indebtedness
secured by Liens permitted under Section 9.01(viii) incurred on and
after the Effective Date, plus (z) the aggregate outstanding
principal amount of all Refinancing Indebtedness incurred in respect
of Indebtedness originally incurred pursuant to this clause (xi) or
any refinancing thereof, shall not exceed $10,000,000;
(xii) on and after the Receivables Facility Transaction Date,
the Designated Credit Parties may (x) contribute cash to the
Receivables Entity the proceeds of which are used to acquire
Receivables Facility Assets from the Designated Credit Parties and
(y) transfer and reacquire Receivables Facility Assets to and from
the Receivables Entity, in each case pursuant to, and in accordance
with the terms of, the Receivables Facility Documents;
(xiii) on and after the Receivables Facility Transaction Date,
the Receivables Entity may transfer and reacquire Receivables
Facility Assets (to the extent acquired from Designated Credit
Parties as provided in clause (xii) above) pursuant to, and in
accordance with the terms of, the Receivables Facility Documents;
(xiv) the surrender or waiver of contract rights or the
settlement, release or surrender of contract, tort or other claims of
any kind shall be permitted, in each case in the good faith business
judgment of the Borrower or its respective Subsidiary;
(xv) each of the Borrower and its Subsidiaries may sell assets
to any Person, provided that (x) the aggregate sale proceeds from all
assets subject to such sales pursuant to this clause (xv) shall not
exceed $5,000,000 in any fiscal year, (y) each such sale results in
consideration at least 75% of which (taking the amount of cash and
the fair market value, as determined by the Borrower in good faith,
of any non-cash consideration, although in the case of any non-cash
consideration received in the form of indebtedness, the amount
thereof shall be deemed to be the greater of such fair market value
thereof or principal amount thereof) shall be in the form of cash
(although, for purposes of this clause (x), there shall be treated as
cash consideration the amount of any trade payables and the principal
amount of Indebtedness for borrowed money assumed by the respective
purchaser of assets), and (z) the Net Cash Proceeds from each Asset
Sale pursuant to this clause (xiv) shall be used to make the
prepayment, if any, required by Section 4.02 as a result of the
reduction, if any, to the Total Available Commitment or shall be
reinvested to the extent permitted by the terms of the definition of
Blocked Commitment.
To the extent the Required Banks or all the Banks (as shall be required by
Section 13.12) waive the provisions of this Section 9.02 with respect to
the sale of any Collateral, or any Collateral is sold or otherwise disposed
of (excluding transfers to the Borrower or a Subsidiary thereof, unless
transferred to the Receivables Entity in accordance with preceding clauses
(xii) and/or (xiii)) as permitted by this Section 9.02, (i) such Collateral
shall be sold or otherwise transferred or disposed of free and clear of the
Liens created by the Security Documents and (ii) if such Collateral
includes all of the capital stock held by the Credit Parties in a
Subsidiary of one or more of the Credit Parties, such capital stock shall
be released from the Pledge Agreement and such Subsidiary, to the extent
party to a Guaranty, shall be released therefrom, and the Agent and the
Collateral Agent shall be authorized to take any actions deemed appropriate
in order to effect the foregoing.
9.03 Restricted Payments. The Borrower will not, and will not
permit any of its Subsidiaries to, authorize, declare, make or pay any
Restricted Payment, except that the following shall be permitted (with
calculations of compliance with this Section 9.03 to take into effect the
provisions of Section 9.05(v)):
(i) any Subsidiary of the Borrower (x) may pay cash Dividends
to the Borrower or any Wholly-Owned Subsidiary of the Borrower and
(y) if such Subsidiary is a Non-Wholly-Owned Subsidiary of the
Borrower, may pay cash Dividends to its shareholders generally so
long as the Borrower or its respective Subsidiary which owns the
equity interest or interests in the Subsidiary paying the cash
Dividends receives at least its proportionate share thereof (based
upon its relative holdings of equity interests in the Subsidiary
paying such cash Dividends and taking into account the relative
preferences, if any, of the various classes of equity interests in
such Subsidiary);
(ii) the Borrower may pay cash Dividends to Parent for the
purpose of paying, so long as the proceeds thereof are promptly used
by Parent to pay, its normal operating expenses in the ordinary
course of business (including, without limitation, professional fees
and expenses) and other similar corporate overhead costs and
expenses;
(iii) on the Business Day immediately preceding the date on
which a scheduled principal and/or interest payment is due on any
outstanding Shareholder Subordinated Note originally issued to any
officer, former employee, employee or director (or their estates) of
Parent, the Borrower or any of the Borrower's Subsidiaries (or, in
the event that a Default or Event of Default shall then exist, on the
first Business Day when no Default or Event of Default shall be
continuing), the Borrower may make cash Dividends to Parent, which in
turn shall immediately utilize the full amount of such cash Dividends
to pay cash Dividends to M&G Holdings, in an amount not to exceed the
aggregate amount of the accrued and unpaid principal and/or interest
with respect to such scheduled payment date as provided in such
Shareholder Subordinated Notes, so long as (x) on the Business Day
immediately after the receipt of such cash Dividend, M&G Holdings
utilizes the full amount thereof to make such required principal
and/or interest payment on such Shareholder Subordinated Notes to the
extent then due and payable in accordance with the terms of such
Shareholder Subordinated Notes, (y) the aggregate amount of all cash
Dividends paid by the Borrower pursuant to this clause (iii) on and
after the Effective Date shall not exceed an amount equal to the
remainder of (1) $5,000,000 less (2) the aggregate amount of all cash
Dividends paid by the Borrower pursuant to Section 9.03(iv) on and
after the Effective Date and (z) no Default or Event of Default then
exists or would result therefrom;
(iv) the Borrower may make cash Dividends to Parent, which in
turn shall immediately utilize the full amount of such cash Dividends
to pay cash Dividends to M&G Holdings, for the purpose of redeeming
or repurchasing, and so long as M&G Holdings promptly, and in any
event by the immediately succeeding Business Day, utilizes the full
amount of such cash Dividends to redeem or repurchase, M&G Holdings
Common Stock (or options or warrants to purchase such M&G Holdings
Common Stock) from officers, former employees, employees and
directors (or their estates) solely of Parent, the Borrower or any of
the Borrower's Subsidiaries upon the death, permanent disability,
retirement or termination of employment at the Parent and its
Subsidiaries of such Person to the extent required to be made in
accordance with the terms of the Management Subscription Agreement,
provided that (x) no Default or Event of Default then exists or would
result therefrom, (y) the amount of such cash Dividends shall not
exceed the amount necessary to make the required redemption or
repurchase payment in accordance with the terms of the Management
Subscription Agreement and (z) notwithstanding the preceding clause
(y), the aggregate amount of all cash Dividends paid by the Borrower
pursuant to this Section 9.03(iv) on and after the Effective Date
shall not exceed an amount equal to the remainder of (1) $5,000,000
less (2) the aggregate amount of all cash Dividends paid by the
Borrower pursuant to Section 9.03(iii) on and after the Effective
Date;
(v) the Borrower may make cash Dividends to (A) Parent, (B)
Parent, which in turn shall immediately utilize the full amount of
such cash Dividends to pay cash Dividends to M&G Holdings and/or (C)
Parent, which in turn shall immediately utilize the full amount of
such cash Dividends to pay cash Dividends to M&G Holdings, which in
turn shall immediately utilize the full amount of such cash Dividends
to pay cash Dividends to Jordan, in each case for the purpose of
paying, and so long as Parent, M&G Holdings or Jordan, as the case
may be, promptly utilizes the full amount of such cash Dividends to
pay, director fees of Parent, M&G Holdings or Jordan, provided that
such cash Dividends shall not exceed the Borrower's allocated share
of such director fees, such allocation to be determined in good faith
by the Borrower; provided further, that the aggregate amount of
Dividends payable under this clause (v) shall not exceed $250,000 in
any fiscal year of the Borrower;
(vi) the Borrower may make cash Dividends to (A) Parent, (B)
Parent, which in turn shall immediately utilize the full amount of
such cash Dividends to pay cash Dividends to M&G Holdings and (C)
Parent, which in turn shall immediately utilize the full amount of
such cash Dividends to pay cash Dividends to M&G Holdings, which in
turn shall immediately utilize the full amount of such cash Dividends
to pay cash Dividends to Jordan, in each case for the purpose of and
so long as Parent, M&G Holdings or Jordan, as the case may be,
promptly utilizes the full amount of such cash Dividends to (w) fund
indemnity payments required by Parent's, M&G Holdings' or Jordan's
certificate of incorporation or by-laws or director indemnity
agreements of Parent, M&G Holdings or Jordan existing on the date
hereof, in each case to the extent then due and payable, (x) pay
filing, registration and reporting fees and expenses, and fees and
expenses associated with state qualifications and other state,
federal or regulatory compliance matters, in each case to the extent
then due and payable, (y) fund expense reimbursement and indemnity
payments under the Intercompany Management Consulting Agreements and
the TJC Management Services Agreement for TJC, in each case to the
extent then due and payable and (z) pay, or reimburse Parent, M&G
Holdings or Jordan for payment of, normal operating expenses incurred
in the ordinary course of business (including, without limitation,
accounting and insurance expenses) and not otherwise covered by this
Section 9.03(vi), in each case to the extent then due and payable;
provided that (x) the aggregate amount of cash Dividends paid by the
Borrower for the purposes described in clause (w) above and any
indemnity payment under clause (y) above in any fiscal year of the
Borrower shall not exceed $5,000,000 and (y) such cash Dividends
shall not exceed the Borrower's allocated share of such payments
owing pursuant to this Section 9.03(vi), such allocation to be
determined in good faith by the Borrower;
(vii) whether or not same constitute Dividends, the payments
expressly permitted to be made pursuant to clauses (vi) through
(xii), inclusive, of Section 9.06(y) shall be permitted;
(viii) the Borrower may repurchase, redeem or otherwise make
payments in respect of Incentive Arrangements established by the
Borrower after the Effective Date to its executives and/or officers
or to the sellers of a Permitted Acquired Business in connection with
a Permitted Transaction, in each case in accordance with the terms of
such Incentive Arrangements, provided that (x) no Default or Event of
Default then exists or would result therefrom, (y) the terms of each
such Incentive Arrangement provide that payments thereunder may only
be made to the extent not prohibited by the terms of this Agreement
(or any refinancing or successive refinancings hereof) as in effect
from time to time, and (z) the aggregate amount of all cash payments
paid by the Borrower pursuant to this Section 9.03(viii) shall not
exceed, in any fiscal year of the Borrower, the product of the
aggregate Acquired EBITDA of all Permitted Acquired Businesses
(theretofore acquired in Permitted Acquisitions effected before the
last day of such fiscal year) for such fiscal year (provided that if
the respective Permitted Acquired Business was acquired after the
first day of the respective fiscal year, the Acquired EBITDA related
thereto shall only be included for periods after the acquisition
thereof was consummated) multiplied by 3; provided that cash payments
of the type described in this clause (viii) may be made in excess of
the amounts otherwise provided above in this clause (viii) (as
determined without regard to this proviso), so long as the aggregate
amount of all cash payments made pursuant to this proviso after the
Effective Date does not exceed $5,000,000;
(ix) the Borrower may (I) make cash interest payments to Parent
under, and in respect of, the Parent Subordinated Intercompany Note
(at the rate provided therein), so long as the amount of interest so
paid does not exceed the amount of interest then owing with respect
to the Senior Unsecured Notes and so long as Parent promptly, and in
any event by the immediately succeeding Business Day, utilizes the
full amount of such cash interest payments to pay interest as and
when due with respect to the Senior Unsecured Notes then outstanding,
to the extent required to be made in accordance with the terms of the
Senior Unsecured Note Indenture, provided that (w) the amount of such
cash interest payments shall not exceed the amount necessary to make
the required interest payment in accordance with the terms of the
Senior Unsecured Note Indenture, (x) the aggregate principal amount
of the Senior Unsecured Notes at any time outstanding, and the
interest rate payable in respect thereof, shall not have increased
(excluding increases as a result of the accrual of Additional
Interest under, and in accordance with, the terms of the Senior
Unsecured Note Documents as originally in effect) from the respective
amount or rate, as the case may be, in effect on the Initial
Borrowing Date less, in the case of the principal amount outstanding,
the aggregate amount of repayments of principal of the Senior
Unsecured Notes made after the Initial Borrowing Date and (z) no such
payment may be made at any time following the occurrence and during
the continuance of any Event of Default under Section 10.01, 10.03
(due to a breach of Section 9.03, 9.08 or 9.09), 10.04, 10.05, 10.09
or 10.10 and (II) pay cash Dividends to Parent, which in turn shall
immediately use the full amount of such cash Dividends for the
purpose of paying the fees and expenses hereinafter described and so
long as Parent promptly, and in any event by the immediately
succeeding Business Day, utilizes the full amount of such cash
Dividends to pay fees and expenses (but not to make indemnity
payments) owing to the trustee and/or the paying agent under, and in
accordance with the terms of, the Senior Unsecured Note Indenture,
provided that no such payment shall be made at any time following the
occurrence and during the continuance of any Event of Default under
Section 10.01, 10.03 (due to a breach of Section 9.03, 9.08 or 9.09),
10.04, 10.05, 10.09 or 10.10;
(x) on and after April 30, 2001, the Borrower may make cash
Dividends to Parent, which in turn shall immediately utilize the full
amount of such cash Dividends for the purpose of paying, and so long
as Parent promptly, and in any event by the immediately succeeding
Business Day, utilizes the full amount of such cash Dividends to pay
amounts as and when due under the Earnout Agreement, to the extent
required to be made in accordance with the terms of the Earnout
Agreement, provided that the amount of such cash Dividend shall not
exceed the amount necessary to make the required payment in
accordance with the terms of Earnout Agreement; and
(xi) the Borrower may use the amount of any cash contribution
to its common equity capital received by it from Parent for such
purpose (so long as such amount is used within five Business Days
after the receipt thereof by the Borrower for such purpose) to make
repayments of principal (and payments of related premium, if any) on
the Parent Subordinated Intercompany Note, so long as the amount of
such payment made by the Borrower to Parent is promptly, and in any
event within five Business Days, utilized by Parent to make
repayments of the principal of Senior Unsecured Notes (and any
related required payment of premium in connection therewith) in
accordance with the provisions thereof, provided, that no such
payment may be made at any time following the occurrence and during
the continuance of any Event of Default under Section 10.01, 10.03
(due to a breach of Section 9.03, 9.08 or 9.09) 10.04, 10.05, 10.09
or 10.10; and
(xii) Borrower may declare and pay, or otherwise effect,
additional Dividends, provided, the aggregate amount of such
Dividends declared pursuant to this clause (xii) after the Effective
Date shall not exceed $2,500,000.
9.04 Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) Scheduled Existing Indebtedness to the extent the same is
listed on Schedule VI, but no refinancings or renewals thereof;
(iii) Indebtedness of the Borrower or any of its Subsidiaries
(a) evidenced by Capitalized Lease Obligations entered into after the
Effective Date, so long as the Liens arising as a result thereof are
permitted pursuant to Section 9.01 and (b) incurred in connection
with purchase money Liens permitted under Section 9.01(viii),
provided that the sum (without duplication) of (w) the aggregate
outstanding amount of such Indebtedness evidenced by all Capitalized
Lease Obligations (excluding Indebtedness evidenced by Capitalized
Lease Obligations arising from Permitted Sale-Leaseback Transactions
the proceeds of which were included pursuant to following clause (y))
incurred on and after the Effective Date plus (x) the aggregate
outstanding principal amount of all such purchase money Indebtedness
incurred on and after the Effective Date plus (y) the aggregate
amount of all proceeds received by the Borrower and its Subsidiaries
from all Permitted Sale-Leaseback Transactions consummated on and
after the Effective Date, plus (z) the aggregate outstanding
principal amount of all Refinancing Indebtedness incurred in respect
of Indebtedness originally incurred pursuant to this clause (iii) or
any refinancing thereof shall not exceed $10,000,000;
(iv) current liabilities of the Borrower and the Borrower's
Subsidiaries incurred in the ordinary course of business not incurred
through or in connection with (i) the borrowing of money or (ii) the
obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with normal
purchases of goods and services;
(v) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 9.05;
(vi) Indebtedness under Other Hedging Agreements providing
protection against fluctuations in currency values in connection with
the Borrower's or any of its Subsidiaries' operations so long as
management of the Borrower or such Subsidiary, as the case may be,
has determined that the entering into of such Other Hedging
Agreements are bona fide hedging activities (and are not for
speculative purposes) and are in the ordinary course of business and
consistent with their past practices;
(vii) Indebtedness of Xxxxxx incurred under the Existing Seller
Subordinated Note in an aggregate principal amount not to exceed
$5,000,000 (as reduced by any repayments of principal thereof) plus
additional Indebtedness of Xxxxxx incurred under the Existing Seller
Subordinated Note representing accrued and unpaid interest thereon in
accordance with the terms of the Existing Seller Subordinated Note;
(viii) prior to December 31, 1996 (or, if earlier, the maturity
date of the Existing Seller Installment Note (whether by acceleration
or otherwise)) Indebtedness of Xxxxxx incurred under the Existing
Seller Installment Note in an aggregate principal amount not to
exceed $90,000,000 (as reduced by any repayments of principal
thereof);
(ix) prior to December 31, 1996 (or, if earlier, the
termination of the Existing Seller Letter of Credit), Indebtedness of
Xxxxxx representing reimbursement obligations in respect of the
Existing Seller Letter of Credit;
(x) Permitted Acquired Debt of any Subsidiary of the Borrower
acquired pursuant to a Permitted Transaction, so long as (w) the
aggregate principal amount of such Permitted Acquired Debt was
reflected in the certification of the Permitted Transaction Cost of
such Permitted Transaction delivered pursuant to Section 8.15(a)(ii),
(x) the respective Permitted Transaction was effected in accordance
with the requirements of said Section 8.15, (y) the respective
Indebtedness meets the requirements of the definition of "Permitted
Acquired Debt" contained herein and (z) the aggregate principal
amount of all Permitted Acquired Debt and all Permitted Debt incurred
or acquired after the Effective Date at no time outstanding shall
exceed $5.0 million;
(xi) Permitted Earn-Out Debt of the Borrower incurred by it in
connection with any Permitted Transaction effected in accordance with
the requirements of Section 8.15, so long as such Indebtedness
conforms to the requirements of the definition of "Permitted Earn-Out
Debt" contained herein;
(xii) Permitted Debt of the Borrower incurred in connection with
a Permitted Transaction, so long as (w) the aggregate principal
amount of such Permitted Debt was included within the Permitted
Transaction Cost as certified pursuant to Section 8.15(a)(ii), (x)
the respective Permitted Transaction was effected in accordance with
the requirements of said Section 8.15, (y) the Indebtedness meets the
requirements of the definition of "Permitted Debt" contained herein
and (z) the aggregate principal amount all Permitted Acquired Debt
and all Permitted Debt incurred or acquired after the Effective Date
at no time outstanding shall exceed $5.0 million;
(xiii) Indebtedness which may be deemed to exist as a result of
the Elmco Refund Obligation and/or the Net Asset Adjustment;
(xiv) Indebtedness which may be deemed to exist pursuant to any
performance, surety, statutory, appeal or similar bond obtained in
the ordinary course of business (so long as any such bond is obtained
by the Borrower or any of its Subsidiaries in respect of its own
obligations and such bond is not guaranteed by any other Person);
(xv) Indebtedness of the Borrower or any of its Subsidiaries
which may be deemed to exist in connection with agreements providing
for indemnification, purchase price adjustments and similar
obligations in connection with acquisitions or sales of assets and/or
businesses effected in accordance with the requirements of this
Agreement (so long as any such obligations are those of the Person
making the respective acquisition or sale, and are not guaranteed by
any other Person);
(xvi) Refinancing Indebtedness in respect of any Indebtedness
originally incurred as permitted by Section 9.04(iii), (x) or (xii)
so long as (a) such Indebtedness has a Weighted Average Life to
Maturity greater than the Weighted Average Life to Maturity of the
Indebtedness being refinanced, (b) such refinancing or renewal does
not (i) increase the amount of such Indebtedness outstanding
immediately prior to such refinancing or renewal or (ii) add
guarantors, obligors or security from that which applied to such
Indebtedness being refinanced or renewed, (c) such refinancing or
renewal Indebtedness has substantially the same subordination
provisions, if any, as applied to the Indebtedness being renewed or
refinanced, (d) in the case of Refinancing Indebtedness in respect of
Indebtedness originally incurred as permitted by Section 9.04(x), all
other terms of such refinancing or renewal (including, without
limitation, with respect to the amortization schedules, redemption
provisions, maturities, covenants, defaults and remedies), are not,
taken as a whole, materially less favorable to the respective
borrower than those previously existing with respect to the
Indebtedness being refinancing or renewed and (e) in the case of
Refinancing Indebtedness in respect of Indebtedness originally
incurred as permitted by Section 9.04(xii), such Refinancing
Indebtedness shall contain such terms and provisions as would be
required to qualify as Permitted Debt in accordance with the proviso
contained in the definition thereof;
(xvii) Indebtedness of the Borrower and its Subsidiaries
representing payment obligations pursuant to the Earnout Agreement;
and
(xviii) Indebtedness which may be deemed to exist pursuant to the
Receivables Facility;
(xix) unsecured Indebtedness of the Borrower pursuant to the
Parent Subordinated Intercompany Note, provided that the aggregate
principal amount thereof at no time exceeds either (x) $170 million
less the aggregate amount of principal repayments made in respect of
such promissory note after the Effective Date (which may only be made
in accordance with the provisions of Section 9.03(xi)) or (y) the
aggregate principal amount of outstanding Senior Unsecured Notes at
such time;
(xx) Indebtedness evidenced by one or more Transaction
Intercompany Notes, so long as each such note is pledged pursuant to
the Pledge Agreement; and
(xxi) additional Indebtedness of the Borrower and its
Subsidiaries not otherwise permitted hereunder and not exceeding
$15,000,000 in aggregate principal amount at any time outstanding.
9.05 Advances, Investments and Loans. The Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly,
lend money or credit or make advances to any Person, or purchase or acquire
any stock, obligations or securities of, or any other interest in, or make
any capital contribution to, any other Person, or purchase or own a futures
contract or otherwise become liable for the purchase or sale of currency or
other commodities at a future date in the nature of a futures contract, or
hold any cash or Cash Equivalents (each of the foregoing, an "Investment"
and, collectively, "Investments"), except that the following shall be
permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
accounts receivables owing to any of them, if created or acquired in
the ordinary course of business and payable or dischargeable in
accordance with customary terms;
(ii) the Borrower and its Subsidiaries may acquire and hold
cash and Cash Equivalents;
(iii) the Borrower may make intercompany loans and advances to
any of its 80%-Owned Subsidiaries that is a Subsidiary Guarantor, any
Subsidiary of the Borrower (other than the Receivables Entity) may
make intercompany loans and advances to the Borrower, and any
Subsidiary of the Borrower may make intercompany loans and advances
to any Wholly-Owned Subsidiary of the Borrower that is a Subsidiary
Guarantor; provided that (A) each Intercompany Loan made by a
Subsidiary of the Borrower (other than a Wholly-Owned Subsidiary
which is a Subsidiary Guarantor) to the Borrower or any Subsidiary
Guarantor shall contain the subordination provisions set forth on
Exhibit N, (B) each Intercompany Loan shall be evidenced by an
Intercompany Note, (C) each Intercompany Note (other than
Intercompany Notes issued by Foreign Subsidiaries to the Borrower or
any Wholly-Owned Subsidiary of the Borrower that is a Subsidiary
Guarantor, except to the extent otherwise required pursuant to
Section 8.16) shall be pledged to the Collateral Agent pursuant to
the Pledge Agreement to the extent required thereby and (D) each
Intercompany Loan made to a Subsidiary shall only be used for working
capital purposes and other general corporate purposes of such
Subsidiary;
(iv) the Acquisition, the Merger, the Asset Contribution and
the MK Stock Contribution shall be permitted in accordance with the
provisions of Section 5;
(v) to the extent the Borrower is at any time permitted to pay
a cash Dividend for the respective purpose permitted pursuant to any
of Sections 9.03(ii), (iii), (iv), (v) or (vi), the Borrower may, in
lieu of making such payment by way of Dividend, make the respective
payment (so long as used for the same purpose and so long as such
payment would otherwise comply in all respects with the relevant
requirements of Section 9.03) by way of advance to the Person to whom
it would otherwise have paid the Dividend pursuant to relevant
provisions of Section 9.03; provided that for all purposes of this
Agreement (including for purposes of determining compliance with
Section 9.03), all payments made pursuant to this Section 9.05(v)
shall be deemed to be Dividends made pursuant to the relevant clause
of 9.03;
(vi) the Borrower and its Subsidiaries (other than the
Receivables Entity) may enter into Other Hedging Agreements to the
extent permitted by Section 9.04(vi);
(vii) the Borrower may make cash equity contributions to any
direct Wholly-Owned Subsidiary of the Borrower that is a Subsidiary
Guarantor and any Wholly-Owned Subsidiary of the Borrower may make
cash equity contributions to any of its respective direct
Wholly-Owned Subsidiaries that are Subsidiary Guarantors;
(viii) the Borrower and its Subsidiaries may acquire and hold
Investments consisting of non-cash consideration received from sales
of assets effected in accordance with the requirements of Sections
9.02(ii) and 9.02(xv);
(ix) the Borrower may establish Subsidiaries to the extent
permitted by Section 9.13;
(x) the Borrower and any of its Subsidiaries (other than the
Receivables Entity) may effect Permitted Acquisitions in accordance
with the requirements of, and to the extent permitted by, Section
8.15 and the definition thereof;
(xi) the Borrower and any of its Subsidiaries (other than the
Receivables Entity) may make Permitted Acquisition Investments in
accordance with the requirements of, and to the extent permitted by,
Section 8.15 and the definition thereof;
(xii) the Borrower and its Subsidiaries (other than the
Receivables Entity) may make Permitted Investments in accordance with
the definition thereof; provided that (x) no Default or Event of
Default then exists or would result therefrom, (y) with respect to
each Permitted Investment, the aggregate amount of such Permitted
Investment (including for this purpose all cash contributed, loaned,
advanced or otherwise transferred by the Borrower or any Subsidiary
of the Borrower, as the case may be, in connection with such
Permitted Investment), made shall not exceed the Permitted Investment
Amount at such time (prior to giving effect to such Permitted
Investment) and (z) in addition to the requirements of preceding
clause (y), in no event shall the aggregate amount of Investments
outstanding pursuant to this clause (xii) at any time (calculated
without regard to any write-downs or write-offs thereof) exceed
$5,000,000 in the aggregate;
(xiii) transactions expressly permitted pursuant to Sections 9.02
and 9.03 shall, to the extent constituting Investments, be permitted
pursuant to this Section 9.05 to the extent provided in such Section
9.02 or 9.03, as the case may be;
(xiv) the Borrower may hold the Existing Seller Letter of Credit
Cash Collateral for the purpose permitted by Section 9.01(xv) in
accordance with such Section 9.01(xv) and the Existing Seller Letter
of Credit Collateral Agreement, and may make investments thereof from
time to time in accordance with the requirements of the Existing
Seller Letter of Credit Collateral Agreement as originally in effect;
(xv) the Borrower may extend credit to Management Investors of
Parent or any of its Subsidiaries for the sole purpose of such
Management Investors purchasing M&G Holdings Common Stock; provided
that (x) the aggregate amount of all extensions of credit made
pursuant to this Section 9.05(xv) shall not exceed at any time
outstanding $750,000 and (y) to the extent cash is loaned to one or
more Management Investors pursuant to this Section 9.05(xv), such
cash shall be immediately used to purchase shares of M&G Holdings
Common Stock, and M&G Holdings shall immediately use the proceeds
received by it to make a capital contribution to the Parent, which in
turn shall immediately contribute such amount to the Borrower;
(xvi) the Borrower and its Subsidiaries may make loans and
advances in the ordinary course of business to their respective
employees for moving, travel and emergency expenses and other similar
expenses, so long as the aggregate principal amount thereof at any
time outstanding (determined without regard to any write-downs or
write-offs of such loans and advances) shall not exceed $1,000,000;
(xvii) any Investment which may be deemed to exist as a result of
(x) any Contingent Obligation expressly permitted pursuant to Section
9.04 or (y) as a result of any payments made pursuant to the Existing
Tax Sharing Agreement (so long as such payments are not made more
than 10 days in advance of the time when required to be made pursuant
to the Existing Tax Sharing Agreement) in accordance with Section
9.06(y)(vi);
(xviii) the Borrower and the other Designated Credit Parties may
make an initial cash capital contribution to the Receivables Entity
on the Receivables Facility Transaction Date as provided in the
Receivables Facility Documents, so long as the Receivables Entity
uses all of the proceeds of such contribution on such date to
purchase Receivables Facility Assets from the Borrower and the other
Designated Credit Parties, and the Borrower and/or such other
Designated Credit Parties may hold the capital stock of the
Receivables Entity issued to them so long as such capital stock has
been duly pledged and delivered to the Collateral Agent pursuant to
the Pledge Agreement;
(xix) on or after the Receivables Facility Transaction Date, the
Receivables Entity may invest Receivables Facility Assets pursuant
to, and in accordance with the terms of, the Receivables Facility
Documents; and
(xx) the loans and advances evidenced by the Transaction
Intercompany Notes may be made, so long as each such Transaction
Intercompany Note is pledged to the Collateral Agent pursuant to the
terms of the Pledge Agreement.
9.06 Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any transaction or
series of related transactions with any Affiliate (other than the Borrower
or a Wholly-Owned Subsidiary thereof) of Parent or any of its Subsidiaries,
(x) other than in the ordinary course of business and on terms and
conditions substantially as favorable to the Borrower or such Subsidiary as
would reasonably be obtained by the Borrower or such Subsidiary at that
time in a comparable arm's-length transaction with a Person other than an
Affiliate; provided, however, that for a transaction or series of related
transactions with an aggregate value of $2,500,000 or more, the board of
directors of the Borrower shall have received an opinion from a nationally
recognized investment banking firm that such transaction is on terms no
less favorable than those that might reasonably have been obtained in a
comparable transaction at such time on a arm's-length basis from a Person
that is not an Affiliate and (y) except that the following transactions,
whether or not such transactions would otherwise be permitted by this
Section 9.06, shall be permitted:
(i) Dividends may be paid to the extent provided in Section
9.03;
(ii) loans may be made and other transactions may be entered
into by the Borrower and the Borrower's Subsidiaries to the extent
permitted by Sections 9.04 and 9.05;
(iii) the Borrower and its Subsidiaries may enter into
employment arrangements with executive officers and senior management
employees in the ordinary course of business;
(iv) customary fees, not to exceed $100,000 in the aggregate
during any fiscal year for all payments made pursuant to this clause
(iv), may be paid to directors of the Borrower and its Subsidiaries;
(v) the Transaction shall be permitted in accordance with the
provisions of Section 5 and the Documents;
(vi) so long as the Borrower is a member of the same
consolidated group as Jordan for federal income tax purposes,
payments required pursuant to the Existing Tax Sharing Agreement, as
in effect on the Initial Borrowing Date and delivered to the Banks
pursuant to Section 5.21, and as entered into by each newly-acquired
or created Subsidiary in accordance with the requirements of Section
8.15 or 9.13, as the case may be, shall be permitted, in each case so
long as the respective such payment does not give rise to an Event of
Default pursuant to Section 10.12;
(vii) the Borrower may make a payment on behalf of Parent on the
Initial Borrowing Date, of a one-time consulting fee in connection
with the Transaction pursuant to Section 2(b) of the TJC Management
Services Agreement referred to in clause (i) of the definition
thereof, to TJC in an aggregate amount not to exceed $2,250,000;
(viii) the Borrower and its Subsidiaries may pay consulting fees,
on a quarterly basis, in arrears, in the amounts required pursuant to
the terms of (x) its respective Intercompany Management Consulting
Agreement to M&G Holdings and (y) the JII Services Agreement to
Jordan, in each case for providing consulting services to Parent and
its Subsidiaries under the Intercompany Management Consultant
Agreements, provided that the aggregate amount of such fees payable
with respect to any fiscal quarter shall not exceed an amount equal
to 1% of the Borrower's gross sales (as determined on a consolidated
basis for the Borrower and its consolidated Subsidiaries);
(ix) so long as no Default under Section 10.01 or 10.05 and no
Event of Default under any of Sections 10.03 (as a result of a
violation of any of the covenants contained in Sections 9.08 and/or
9.09), 10.01 or 10.05 exists at the time of payment thereof or would
exist immediately after giving effect thereto, the Borrower and its
Subsidiaries may pay consulting fees in the amounts required pursuant
to the terms of each TJC Management Services Agreement to TJC for
providing investment services to Parent and its Subsidiaries under
the TJC Management Services Agreements when and as due, so long as
the aggregate amount of fees paid by the Borrower and its
Subsidiaries pursuant to this clause (ix) does not exceed the sum of
(x) 2% of the aggregate consideration paid or received by the
Borrower or any of its Subsidiaries in connection with any
acquisition or divestiture and (y) 1% of the amount of any financing
obtained by the Borrower and its Subsidiaries after the date hereof;
(x) the Borrower may enter into and make payments under the
Affiliate Leases as originally in effect or as modified from time to
time in accordance with the requirements of this Agreement;
(xi) the Borrower and its Subsidiaries may enter into and make
payments under the Directors Indemnity Agreement; and
(xii) the Borrower and its Subsidiaries may pay the amounts
required to be paid pursuant to the terms of the Earnout Agreement
when and as due.
Without limiting the foregoing provisions of this Section 9.06, in no event
shall any management, consulting or similar fees be paid or payable by the
Borrower or any of its Subsidiaries to any Person except as specifically
provided in this Section 9.06.
9.07 Changes in Business. (a) The Borrower and its
Subsidiaries will not engage in any business other than the business
engaged in by the Acquired Business and Xxxxxx and its Subsidiaries as of
the Effective Date and Related Businesses.
(b) Notwithstanding anything to the contrary contained in this
Agreement, prior to the consummation of the Transaction, none of the
Borrower, Acquisition Corp., Xxxxx Acquisition Sub. or Gear Acquisition
Sub. shall engage in any business.
(c) Notwithstanding anything to the contrary contained in this
Agreement, the Receivables Entity will not engage in any business other
than purchasing Receivables Facility Assets from the Designated Credit
Parties and the related transactions pursuant to the terms of the
Receivables Facility Documents.
9.08 Consolidated Interest Coverage Ratio. The Borrower will
not permit the Consolidated Interest Coverage Ratio for any Test Period
ending during a period described below to be less than the ratio set forth
opposite such period below:
Period Ratio
------ -----
From and including Initial Borrowing Date through
and including December 30, 1997 1.35:1.0
From and including December 31, 1997 through and
including December 30, 1998 1.45:1.0
From and including December 31, 1998 through and
including December 30, 1999 1.55:1.0
From and including December 31, 1999 through and
including December 30, 2000 1.65:1.0
Thereafter 1.75:1.0
Notwithstanding anything contrary contained above or elsewhere in this
Agreement, (i) all calculations of compliance with this Section 9.08 shall
be made on a Pro Forma Basis for any Permitted Transactions effected during
the relevant Test Period and (x) if the respective Test Period begins prior
to the Initial Borrowing Date, for the Transaction as if same had occurred
on the first day of the respective Test Period and (y) if the respective
Test Period ends after January 1, 1996 and begins prior to the BCM
Acquisition Date, for the consummation of the BCM Transaction as if same
had occurred on the first day of the respective Test Period and (ii) in no
event shall the Consolidated Interest Coverage Ratio be less than 1.5:1.0
upon the consummation of, and after giving effect on a Pro Forma Basis to,
any Permitted Transaction effected after the Initial Borrowing Date.
9.09 Leverage Ratio. The Borrower will not permit the Leverage
Ratio as described on the last day of any Test Period ending during a
period described below to exceed the ratio set forth opposite the
respective period below:
Period Ratio
------ -----
From and including Initial Borrowing Date through
and including December 30, 1997 6.15:1.0
From and including December 31, 1997 through and
including December 30, 1998 6.10:1.0
From and including December 31, 1998 through and
including December 30, 1999 5.95:1.0
From and including December 31, 1999 through and
including December 30, 2000 5.60:1.0
Thereafter 5.30:1.0
Notwithstanding anything contrary contained above or elsewhere in this
Agreement, (i) all calculations of compliance with this Section 9.09 shall
be made on a Pro Forma Basis for any Permitted Transactions effected during
the relevant Test Period and (x) if the respective Test Period begins prior
to the Initial Borrowing Date, for the Transaction as if same had occurred
on the first day of the respective Test Period and (y) if the respective
Test Period ends after January 1, 1996 and begins prior to the BCM
Acquisition Date, for the consummation of the BCM Transaction as if same
had occurred on the first day of the respective Test Period and (ii) in no
event shall the Leverage Ratio be greater than 6.0:1.0 upon the
consummation of, and after giving effect on a Pro Forma Basis to, any
Permitted Transaction effected after the Initial Borrowing Date.
9.10 Limitation on Modifications of Certain Indebtedness;
Modifications of Certificate of Incorporation, By-Laws and Certain
Agreements; etc. The Borrower will not, and will not permit any of its
Subsidiaries to:
(i) amend or modify (or permit the amendment or modification of)
any of the terms or provisions of (x) any Acquisition Document
(including the Earnout Agreement), any Merger Document, the Existing
Seller Subordinated Note, any Existing Seller Subordinated Note
Document, the Existing Seller Installment Note, the Existing
Indebtedness, any Debt Agreement, or any agreement (including,
without limitation, any purchase agreement, indenture, loan agreement
or security agreement) relating thereto, except for Permitted
Amendments or (y) the Parent Subordinated Intercompany Note;
(ii) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for
value (including, without limitation, by way of depositing with the
trustee with respect thereto monies or securities before due for the
purpose of paying when due) or exchange of, or any voluntary
prepayment of, or any redemption as a result of any equity issuance,
asset sale, change of control or similar event of, or set-off any
amounts against, any Existing Seller Subordinated Note;
(iii) make any interest or principal or other payment with respect
to any Existing Seller Subordinated Note or the Parent Subordinated
Intercompany Note which is not permitted to be paid to the holder
thereof in accordance with the subordination provisions applicable
thereto or, in the case of the Parent Subordinated Intercompany Note,
violates the provisions of Section 9.03;
(iv) amend, modify or change its Certificate of Incorporation
(including, without limitation, by the filing or modification of any
certificate of designation) (other than a certificate of merger with
respect to the Merger) or By-Laws, or similar organizational
document, except for such amendments to the Certificate of
Incorporation or By-Laws or such other organizational document of the
Borrower or any of its Subsidiaries which do not in any way adversely
affect the interests of any Bank in its capacity as such;
(v) amend, modify, change or terminate the Existing Tax Sharing
Agreement, except for such amendments, modifications or changes which
solely add new parties thereto, including, without limitation, new
Subsidiaries of the Borrower in accordance with Sections 8.11 and
9.13 or which are not adverse to the interests of any Bank, or enter
into any new Tax Sharing Agreement;
(vi) enter into any new Management Agreement or amend, modify or
change the JII Services Agreement, any Intercompany Management
Consulting Agreement, the TJC Management Services Agreement or the
Directors Indemnity Agreement, except amendments, modifications or
changes to any such agreement which are not adverse to any Bank, do
not violate or breach, and are not inconsistent with, any of the
terms of this Agreement and which do not, and will not, involve the
payment by the Borrower or any of its Subsidiaries of any amounts
which could give rise to a violation of this Agreement and do not
result in the Borrower or any of its Subsidiaries incurring then or
at any time in the future any liability or monetary obligation which
could give rise to a violation of this Agreement or which is in
excess of that which is in existence on the Effective Date (it being
understood that new directors may be added as parties to the
Directors Indemnity Agreement);
(vii) amend, modify, change or terminate any Affiliate Lease, except
for such amendments, modifications or changes which are not adverse
to any Bank in its capacity as such, do not violate or breach, and
are not inconsistent with, any of the terms of the Agreement;
(viii) amend, modify or change any provision of, or any agreement
relating to, Permitted Acquired Debt, Permitted Debt or Permitted
Earn-Out Debt or alter the non-recourse nature of any such Permitted
Acquired Debt or provide for any guaranty or other direct or indirect
assurances of payment by the Borrower or any Subsidiary of the
Borrower or provide any security therefor (other then in connection
with Liens permitted under Section 9.01(xiv) securing Permitted
Acquired Debt) and, except for amendments, modifications or changes
which are not adverse to any Bank, and do not violate or breach, and
are not inconsistent with, any of the terms of this Agreement;
(ix) amend, modify or change, terminate or enter into any new
Shareholders' Agreement, or any other agreement with respect to its
capital stock, including warrants and warrant agreements, except
amendments, modifications, changes, terminations and new agreements
which are not adverse to any Bank, do not violate or breach, and are
not inconsistent with, any of the terms of this Agreement and which
do not, and will not, involve the payment by the Borrower or any of
its Subsidiaries of any amounts which could give rise to a violation
of this Agreement and do not result in the Borrower or any of its
Subsidiaries incurring then or at any time in the future any
liability or monetary obligation which could give rise to a violation
of this Agreement;
(x) amend, modify or change, terminate or enter into any new
Employee Benefit Plan or Employment Agreement, except in the case of
this clause (x) if the aggregate cost to the Borrower and its
Subsidiaries as a result of such amendments, modifications, changes,
terminations and new agreements could not reasonably be expected to
have a material adverse effect on the performance, business, assets,
liabilities, operations, properties, condition (financial or
otherwise) or prospects of the Borrower or the Borrower and its
Subsidiaries taken as a whole; or
(xi) at any time after the Receivables Facility Transaction Date,
amend or modify, or permit the amendment or modification of, any
provision of any Receivables Facility Document, in each case unless
the Receivables Amendment Conditions are satisfied in connection
therewith.
9.11 Limitation on Certain Restrictions on Subsidiaries. The
Borrower will not, and will not permit any of its Subsidiaries to, directly
or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary
of the Borrower to (a) pay dividends or make any other distributions on its
capital stock or any other interest or participation in its profits owned
by the Borrower or any of its Subsidiaries, or pay any Indebtedness owed to
the Borrower or any Subsidiary of the Borrower, (b) make loans or advances
to the Borrower or any Subsidiary of the Borrower or (c) transfer any of
its properties or assets to the Borrower or any Subsidiary of the Borrower,
except in each case for such encumbrances or restrictions existing under or
by reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) customary provisions restricting subletting or assignment
of any lease governing a leasehold interest of the Borrower or any
Subsidiary of the Borrower, (iv) customary provisions restricting
assignment of any agreement entered into by the Borrower or any Subsidiary
of the Borrower in the ordinary course of business, (v) restrictions on the
transfer of any assets subject to a Lien permitted by this Agreement, (vi)
the Senior Unsecured Note Documents (as in effect on the Effective Date),
(vii) any agreement or instrument governing Permitted Acquired Debt, which
encumbrance or restriction is not applicable to any Person or the
properties or assets of any Person, other than the Person or the properties
or assets of the Person acquired pursuant to the respective Permitted
Transaction and so long as the respective encumbrances or restrictions were
not created (or made more restrictive) in connection with or in
anticipation of the respective Permitted Transaction, and any refinancings
of Permitted Acquired Debt permitted pursuant to Section 9.04(xvi) may
contain restrictions or encumbrances which are not more restrictive than
those contained in the Indebtedness being refinanced, (viii) any
Indebtedness permitted by Section 9.04 (other than Permitted Acquired Debt)
to the extent the restrictions contained in such Indebtedness are not more
restrictive than those contained in this Agreement and (ix) restrictions on
the Receivables Entity, and with respect to the Receivables and Receivables
Related Assets, set forth in the Receivables Facility Documents.
9.12 Limitation on Issuance of Capital Stock. The Borrower
will not, and will not permit any of its Subsidiaries to, issue (including
by way of sales of treasury stock) any capital stock (including preferred
stock), or any options or warrants to purchase, or securities convertible
into, capital stock, except (i) for transfers and replacements of then
outstanding shares of capital stock, (ii) for stock splits, stock dividends
and additional issuances which do not decrease the percentage ownership of
the Borrower or any of its Subsidiaries in any class of the capital stock
of the Borrower or any of its Subsidiaries, (iii) the issuances of capital
stock of an entity to the Borrower or any of its Subsidiaries in connection
with the creation of a new Subsidiary created in compliance with Section
9.13, (iv) other than with respect to the Borrower, to qualify directors to
the extent required by applicable law and (v) any Subsidiary created to
effect, or acquired pursuant to, a Permitted Acquisition may be, or become
in connection with the respective Permitted Acquisition, an 80%-Owned
Subsidiary, and in connection therewith such Subsidiary may issue capital
stock to Persons other than the Borrower and its Subsidiaries so long as it
remains such an 80%-Owned Subsidiary and such issuances do not violate any
other provision of this Agreement. All capital stock issued in accordance
with this Section 9.12 shall be delivered to the Collateral Agent for
pledge pursuant to a Pledge Agreement to the extent required thereby.
9.13 Limitation on Creation of Subsidiaries. The Borrower will
not, and will not permit any of its Subsidiaries to, establish, create or
acquire any Subsidiary; provided, that the Borrower and its Subsidiaries
shall be permitted to (a) establish, create or acquire Subsidiaries in
connection with Permitted Transactions to the extent otherwise permitted by
this Agreement so long as in each such case, such new Subsidiary shall take
all actions to the extent required pursuant to Section 8.11; and (b)
establish or create any Wholly-Owned Domestic Subsidiary, in each such case
so long as (i) the capital stock of such new Wholly-Owned Domestic
Subsidiary held by the Borrower or a Wholly-Owned Domestic Subsidiary is
pledged pursuant to, and to the extent required by, Section 8.11 and the
Pledge Agreement and the certificates representing such stock, together
with stock powers duly executed in blank, are delivered to the Collateral
Agent, (ii) such new Wholly-Owned Domestic Subsidiary (except if such
Person is the Receivables Entity) executes a counterpart of the Subsidiary
Guaranty, the Pledge Agreement and the Security Agreement, (iii) such new
Wholly-Owned Domestic Subsidiary executes a counterpart of the Existing Tax
Sharing Agreement or enters into an amendment thereto in form satisfactory
to the Agent, and (iv) such new Wholly-Owned Domestic Subsidiary shall take
all other actions required pursuant to Section 8.11. In addition, each
such new Subsidiary shall execute and deliver, or cause to be executed and
delivered, all other relevant documentation of the type described in
Section 5 as such new Subsidiary (other than the Receivables Entity) would
have had to deliver if such new Subsidiary were a Credit Party on the
Effective Date.
SECTION 10. Events of Default. Upon the occurrence of any of
the following specified events (each, an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note, (ii) default in the
payment of any Unpaid Drawing for three or more Business Days after the
date the respective Drawing was made or, if no Default or Event of Default
exists pursuant to Section 10.05, for three or more Business Days after the
receipt by the Borrower of notice of the respective Drawing by the Agent or
the Issuing Bank or (iii) default, and such default shall continue
unremedied for three or more Business Days, in the payment when due of any
interest on any Loan or Note or Unpaid Drawing, or any Fees or any other
amounts owing hereunder or under any other Credit Document; or
10.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document
or in any certificate delivered pursuant hereto or thereto shall prove to
be untrue in any material respect on the date as of which made or deemed
made; or
10.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement
contained in Section 8.01(f)(i), 8.08 or Section 9 or (ii) default in the
due performance or observance by it of any other term, covenant or
agreement contained in this Agreement and such default shall continue
unremedied for a period of 30 days after written notice to the Borrower by
the Agent or any Bank; or
10.04 Default Under Other Agreements. (a) (i) The Borrower or
any of its Subsidiaries shall (x) default in any payment of any
Indebtedness (other than the Obligations) beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness
was created, or (y) default in the observance or performance of any
agreement or condition relating to any Indebtedness (other than the
Obligations) or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause,
or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without
regard to whether any notice is required), any such Indebtedness to become
due prior to its stated maturity (with the occurrences described in
preceding clause (y) to include any early amortization or termination event
or other similar event with respect to the Receivables Facility if such
occurrence has substantially the same effect as is otherwise provided above
with respect to outstanding Indebtedness pursuant to this clause (y)), or
(ii) any Indebtedness (other than the Obligations, but including Attributed
Receivables Facility Indebtedness) of the Borrower or any of its
Subsidiaries shall be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior to
the stated maturity thereof, provided that it shall not be a Default or
Event of Default under this Section 10.04(a) unless the aggregate principal
amount of all Indebtedness as described in preceding clauses (i) and (ii)
is at least $7,500,000; or (b) (i) Parent shall (x) default in any payment
of any Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created or (y)
default in the observance or performance of any agreement or condition
relating to any Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is
to cause, or to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity, or (ii) any Indebtedness of Parent
shall be declared to be due and payable, or required to be prepaid other
than by a regularly scheduled required prepayment, prior to the stated
maturity thereof, provided that it shall not be a Default or Event of
Default under this Section 10.04(b) unless the aggregate principal amount
of all Indebtedness as described in preceding clauses (i) and (ii) is at
least $20,000,000; or
10.05 Bankruptcy, etc. M&G Holdings, Parent, Borrower or any
of the Borrower's Subsidiaries (excluding Insignificant Subsidiaries) shall
commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code") or shall consent to the filing of
any petition against it under any such law; or an involuntary case is
commenced against M&G Holdings, Parent, Borrower or any of the Borrower's
Subsidiaries (excluding Insignificant Subsidiaries) and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of M&G Holdings, Parent, Borrower or any of the Borrower's
Subsidiaries (excluding Insignificant Subsidiaries); or M&G Holdings,
Parent, Borrower or any of the Borrower's Subsidiaries (excluding
Insignificant Subsidiaries) commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to M&G Holdings, Parent,
Borrower or any of the Borrower's Subsidiaries (excluding Insignificant
Subsidiaries); or there is commenced against M&G Holdings, Parent, Borrower
or any of the Borrower's Subsidiaries (excluding Insignificant
Subsidiaries) any such proceeding which remains undismissed for a period of
60 days; or M&G Holdings, Parent, Borrower or any of the Borrower's
Subsidiaries (excluding Insignificant Subsidiaries) is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any
such case or proceeding is entered; or M&G Holdings, Parent, Borrower or
any of the Borrower's Subsidiaries (excluding Insignificant Subsidiaries)
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or M&G Holdings, Parent, Borrower or any of the
Borrower's Subsidiaries (excluding Insignificant Subsidiaries) makes a
general assignment for the benefit of creditors; or any partnership and/or
corporate action is taken by M&G Holdings, Parent, Borrower or any of the
Borrower's Subsidiaries (excluding Insignificant Subsidiaries) for the
purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof or a waiver of
such standard or extension of any amortization period is sought or granted
under Section 412 of the Code, any Plan shall have had or is likely to have
a trustee appointed to administer such Plan, any Plan is, shall have been
or is likely to be terminated or to be the subject of termination
proceedings under ERISA, any Plan shall have an Unfunded Current Liability,
a contribution required to be made to a Plan has not been timely made, the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate has
incurred or is likely to incur a liability to or on account of a Plan under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code, or the
Borrower or any of its Subsidiaries has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601
of ERISA) or employee pension benefit plans (as defined in Section 3(2) of
ERISA); (b) there shall result from any such event or events the imposition
of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; (c) which lien, security interest
or liability, individually and/or in the aggregate, in the opinion of the
Required Banks, will have a material adverse effect upon the business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries
taken as a whole; or
10.07 Security Documents. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full
force and effect, or shall cease to give the Collateral Agent for the
benefit of the Secured Creditors the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a perfected
security interest in, and Lien on, all of the Collateral), in favor of the
Collateral Agent, superior to and prior to the rights of all third Persons
(except as permitted by Section 9.01), and subject to no other Liens
(except as permitted by Section 9.01), or any Credit Party shall default in
the due performance or observance of any term, covenant or agreement on its
part to be performed or observed pursuant to any of the Security Documents
and such default shall continue beyond any grace period specifically
applicable thereto pursuant to the terms of such Security Document; or
10.08 Guaranties. Any Guaranty or any provision thereof shall
cease to be in full force or effect as to the relevant Subsidiary
Guarantor, or any Subsidiary Guarantor or Person acting by or on behalf of
such Subsidiary Guarantor shall deny or disaffirm such Subsidiary
Guarantor's obligations under the relevant Guaranty, or any Subsidiary
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to
the relevant Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries (excluding
Insignificant Subsidiaries) involving in the aggregate for the Borrower and
such Subsidiaries a liability (not fully covered by a reputable and solvent
insurance company or not paid) and such judgments and decrees either shall
be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of 60 consecutive days, and the
aggregate amount of all such judgments exceeds $7,500,000; or
10.10 Change of Control. A Change of Control shall occur; or
10.11 Senior Unsecured Notes; Parent Subordinated Intercompany
Note. At any time after the Effective Date and for any reason whatsoever
(w) any amendment or modification, other than one or more Permitted
Amendments, is made to the Senior Unsecured Note Documents, (x) any
repayment of principal is made with respect to any Senior Unsecured Note
unless, prior to such repayment, an amount of cash equal to the aggregate
principal amount so repaid (and any premium related thereto) has been
contributed by Parent to the common equity of the Borrower and then
utilized by the Borrower to prepay the principal of the Parent Subordinated
Intercompany Note (and any premium related thereto) in accordance with the
provisions of Section 9.03(xi), (y) the aggregate principal amount of the
Parent Subordinated Intercompany Note at any time exceeds, or for any
period of 30 or more days is less than, the aggregate principal amount of
Senior Unsecured Notes then outstanding or (z) any Person other than Parent
owns, or otherwise acquires a beneficial interest in, the Parent
Subordinated Intercompany Note; or
10.12 Certain Tax Payments. For any taxable year ending after
the Effective Date with respect to which the Borrower and any of its
Subsidiaries are included in a consolidated federal income tax return, or a
consolidated, combined or unitary state or local tax return with any Person
(including without limitation Jordan, M&G Holdings and/or Parent) other
than the Borrower and its Subsidiaries, the Borrower and its Subsidiaries
shall pay with respect to such year an amount of federal income tax or
state or local tax, as the case may be, that exceeds, in the aggregate, the
amount of such tax that the Borrower and its Subsidiaries would have been
obligated to pay if the Borrower and its Subsidiaries had filed a separate
consolidated federal income tax return or a separate consolidated, combined
or unitary state or local tax return, as the case may be, for such year and
all prior taxable years ending after the Effective Date (with the Borrower
as the common parent of such affiliated group) and included in such
separate consolidated, combined or unitary tax return, in addition to items
of income, gain, loss, deduction and credit generated by such corporations,
any and all deductions, losses and credits generated by Parent, but none of
the income or gain generated by Parent, other than income from payments of
interest, if any, from Borrower (to the extent offset by deductions, losses
and credits generated by Parent); provided that notwithstanding the
foregoing, there shall be no default under this Section 10.12 unless the
aggregate amount of such excess payments outstanding at any time (i.e.,
theretofore paid and not reimbursed to the Borrower by Parent or one or
more of the Parent's Affiliates (exclusive of the Borrower and its
Subsidiaries and Persons controlled by the Borrower)) exceed $250,000;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Agent, upon the written request of
the Required Banks, shall by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the Agent,
any Bank or the holder of any Note to enforce its claims against any Credit
Party (provided, that, if an Event of Default specified in Section 10.05
shall occur with respect to the Borrower, the result which would occur upon
the giving of written notice by the Agent to the Borrower as specified in
clauses (i) and (ii) below shall occur automatically without the giving of
any such notice): (i) declare the Total Commitment terminated, whereupon
all of the Commitments of each Bank shall forthwith terminate immediately
and any Commitment Commission shall forthwith become due and payable
without any other notice of any kind; (ii) declare the principal of and any
accrued interest in respect of all Loans and the Notes and all Obligations
(including Unpaid Drawings) owing hereunder and thereunder to be, whereupon
the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived
by each Credit Party; (iii) terminate any Letter of Credit, which may be
terminated, in accordance with its terms; (iv) direct the Borrower to pay
(and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 10.05 with respect
to the Borrower, it will pay) to the Agent at the Payment Office such
additional amount of cash, to be held as security by the Agent, as is equal
to the aggregate Stated Amount of all Letters of Credit issued for the
account of the Borrower and then outstanding; (v) enforce, as Collateral
Agent, any or all of the Liens and security interests created pursuant to
the Security Documents; and (vi) apply any cash collateral as provided in
Section 4.02.
SECTION 11. Definitions and Accounting Terms.
--------------------------------
11.01 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquired Business" shall mean the businesses, assets and
liabilities acquired by Acquisition Corp. from Imperial, Xxxxx and Gear
pursuant to the Acquisition Documents.
"Acquired EBITDA" shall mean, for any period, that portion of
the Consolidated EBITDA of the Borrower and its Subsidiaries for such
period which, as determined in good faith by the Borrower, is attributable
to Permitted Acquired Businesses theretofore acquired in Permitted
Acquisitions effected prior to the date of the respective determination of
such Acquired EBITDA; provided that Acquired EBITDA shall not include any
amounts in respect of any Permitted Acquired Business for any period prior
to the acquisition thereof in a Permitted Acquisition by the Borrower
and/or one or more of its Subsidiaries.
"Acquired Property" shall have the meaning provided in Section
9.01(viii).
"Acquisition" shall mean the acquisition by Acquisition Corp. of
the Acquired Business from Imperial, Xxxxx and Gear pursuant to, and in
accordance with the terms of, the Acquisition Documents.
"Acquisition Agreement" shall mean the Asset Purchase Agreement,
dated as of November 7, 1996, among Acquisition Corp., Imperial, Xxxxx and
Gear, as amended to the Effective Date and as the same may be further
modified, amended or supplemented from time to time in accordance with the
terms hereof and thereof.
"Acquisition Corp." shall mean The New Imperial Electric
Company, a Delaware corporation and a Wholly-Owned Subsidiary of the
Borrower.
"Acquisition Documents" shall mean the Acquisition Agreement,
the Earnout Agreement and all other agreements, instruments and documents
entered into in connection with the Acquisition.
"Additional Interest" shall mean the Liquidated Damages as
defined in, and payable in accordance with the terms of, the Senior
Unsecured Note Indenture.
"Additional Security Documents" shall have the meaning provided
in Section 8.11.
"Adjusted Certificate of Deposit Rate" shall mean, on any day,
the sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by
dividing (x) the most recent weekly average dealer offering rate for
negotiable certificates of deposit with a three-month maturity in the
secondary market as published in the most recent Federal Reserve System
publication entitled "Select Interest Rates," published weekly on Form H.15
as of the date hereof, or if such publication or a substitute containing
the foregoing rate information shall not be published by the Federal
Reserve System for any week, the weekly average offering rate determined by
the Agent on the basis of quotations for such certificates received by it
from three certificate of deposit dealers in New York of recognized
standing or, if such quotations are unavailable, then on the basis of other
sources reasonably selected by the Agent, by (y) a percentage equal to 100%
minus the stated maximum rate of all reserve requirements as specified in
Regulation D applicable on such day to a three-month certificate of deposit
of a member bank of the Federal Reserve System in excess of $100,000
(including, without limitation, any marginal, emergency, supplemental,
special or other reserves), plus (2) the then daily net annual assessment
rate as estimated by the Agent for determining the current annual
assessment payable by the Agent to the Federal Deposit Insurance
Corporation for insuring three-month certificates of deposit.
"Affiliate" shall mean, with respect to any Person, any other
Person (i) directly or indirectly controlling (including, but not limited
to, all directors, officers and partners of such Person) controlled by, or
under direct or indirect common control with, such Person or (ii) that
directly or indirectly owns more than 5% of any class of the voting
securities or capital stock of or equity interests in such Person. A
Person shall be deemed to control another Person if such Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise.
"Affiliate Leases" shall mean and include each of (i) the
Industrial Building Lease, dated as of September 22, 1995, between FJM
Realty, Inc. and the Borrower, with respect to the property located at 0000
Xxxxxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxx, (ii) the Industrial Building Lease,
dated as of September 22, 1995 between Bradrock Realty, Inc. and the
Borrower, with respect to the property located at 00 Xxxx Xxxxxxxx Xxxxx,
Xxx Xxxxxxx, Xxxxxxxx, (iii) the Industrial Building Lease, dated as of
September 22, 1995 between Ridge Industries, Inc. and the Borrower, with
respect to the property located at 0000 Xxxxxxx Xxxxx, Xxxxxxxx Xxxxxx,
Xxxxxxxxx, and (iv) the Industrial Building Lease, dated as of September
22, 1995 between Bradrock Realty, Inc. and the Borrower, with respect to
the property located at 00-00 Xxxx Xxxxxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxx,
in each case as such Affiliate Lease is in effect on the Original Effective
Date and as the same may be amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof.
"Agent" shall mean Bankers Trust Company, in its capacity as
Agent for the Banks hereunder, and shall include any successor to the Agent
appointed pursuant to Section 12.09.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated, extended, renewed, refinanced or replaced
from time to time.
"Applicable Commitment Commission Percentage" shall mean, at any
time, a percentage per annum equal to 1/2 of 1%; provided, that from and
after the Start Date occurring after the last day of the first fiscal
quarter of the Borrower ended at least one year after the Initial Borrowing
Date to and including the corresponding End Date, the Applicable Commitment
Commission Percentage shall be the respective percentage per annum set
forth in clause (A) or (B) below if, but only if, as of the Test Date the
following conditions in clause (A) or (B) below are met:
(A) 3/8 of 1% if, but only if, as of the Test Date for such
Start Date the Leverage Ratio (calculated on a Pro Forma Basis for
all Permitted Transactions which actually occurred during the
relevant Test Period) for the Test Period ended on such Test Date
shall be equal to or greater than 4.75:1.0 but less than 5.0:1.0; or
(B) 1/4 of 1% if, but only if, as of the Test Date for such
Start Date the Leverage Ratio (calculated on a Pro Forma Basis for
all Permitted Transactions which actually occurred during the
relevant Test Period) for the Test Period ended on such Test Date is
less than 4.75:1.0.
The Leverage Ratio shall be determined for the relevant Test Period, in
each case taken as one accounting period, by delivery of an officer's
certificate of the Borrower to the Banks pursuant to Section 8.01(e), which
certificate shall set forth the calculation of the Leverage Ratio. The
Applicable Commitment Commission Percentage so determined shall apply,
except as set forth below, from the date on which such officer's
certificate is delivered to the Agent to the earlier of (x) the date on
which the next certificate is delivered to the Agent pursuant to Section
8.01(e) and (y) the 45th day following the first day of the fiscal quarter
immediately following the delivery of such certificate to the Agent.
Notwithstanding anything to the contrary contained above, the Applicable
Commitment Commission Percentage shall be 1/2 of 1% if no officer's
certificate has been delivered to the Banks pursuant to Section 8.01(e)
which sets forth the Leverage Ratio for the relevant Test Period or the
financial statements upon which any such calculations are based have not
been delivered, until such a certificate and/or financial statements are
delivered. Notwithstanding anything to the contrary contained above in
this definition, the Applicable Commitment Commission Percentage shall be
1/2 of 1% per annum at any time that a Default under Section 10.01 or 10.05
or any Event of Default shall exist.
"Applicable Margin" shall mean a percentage equal to (i) in the
case of Base Rate Loans, 1.50% less the then applicable Interest Reduction
Discount and (ii) in the case of Eurodollar Loans, 2.50% less the then
applicable Interest Reduction Discount.
"Asset Contribution" shall have the meaning provided in Section
5.11(b).
"Asset Sale" shall mean any sale, transfer or other disposition
by the Borrower or any of its Subsidiaries to any Person other than the
Borrower or any of its Subsidiaries of any asset (including, without
limitation, any capital stock, limited liability company interests,
partnership interests or other securities of another Person) of the
Borrower or any of its Subsidiaries other than (u) transfers of Receivables
Facility Assets as permitted by Sections 9.02(xii) and (xiii), (v) any
granting of licenses in the ordinary course of business of the Borrower and
its Subsidiaries, (w) any surrender of claims not involving the sale of an
asset, (x) any sale, transfer or disposition of Cash Equivalents, (y) any
sale, transfer or disposition of inventory, Receivables and Receivables
Related Assets in the ordinary course of business of the Borrower and its
Subsidiaries and (z) any sale, transfer or disposition of assets generating
Net Cash Proceeds from such transaction in an amount which does not exceed
$1,000,000).
"Asset Sale Calculation Period" shall have the meaning provided
in Section 8.18.
"Asset Sale Certificate" shall have the meaning provided in the
definition of Blocked Commitment.
"Assignment and Assumption Agreement" shall mean the Assignment
and Assumption Agreement substantially in the form of Exhibit P
(appropriately completed).
"Attributed Receivables Facility Indebtedness" at any time shall
mean the principal amount of Indebtedness which would be outstanding at
such time under the Receivables Facility if same were structured as a
secured lending agreement rather than a purchase agreement.
"Authorized Officer" of any Credit Party shall mean, with
respect to (i) the delivery of Notices of Borrowing, Notices of Conversion,
Letter of Credit Requests and similar notices, any person or persons that
have or have been authorized by the board of directors of the Borrower to
deliver such notices pursuant to this Agreement and that has or have
appropriate signature cards on file with the Agent, the Swingline Lender
and each Issuing Bank and (ii) the delivery of financial information and
officer's certificates pursuant to this Agreement, mean any of the Chief
Executive Officer, the President, the Chief Financial Officer, any
Vice-President or Treasurer of such Credit Party. The Agent shall have no
duty to ascertain whether any Person purporting to be an Authorized Officer
has been authorized by the board of directors of any Credit Party and shall
not, in the absence of gross negligence or willful misconduct on its part,
be held liable for acting under this Agreement upon its belief that any
such Person is as an Authorized Officer. Furthermore, for purposes of this
Agreement and the related Credit Documents, the actions of any Person
believed to be an Authorized Officer by the Agent as discussed above shall
be fully binding upon the Credit Parties.
"Available Commitment" for each Bank shall mean, at any time,
such Bank's Commitment less such Bank's Percentage of the Blocked
Commitment, if any, at such time.
"Bank" shall mean each financial institution listed on Schedule
I, as well as any Person which becomes a "Bank" hereunder pursuant to
13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing
(including a Mandatory Borrowing) or Unpaid Drawing in violation of this
Agreement or (ii) a Bank having notified in writing the Borrower and/or the
Agent that it does not intend to comply with its obligations under Section
1.01(a), (b) or (c), or Section 2.04.
"Bankruptcy Code" shall have the meaning provided in Section
10.05.
"Xxxxxx-Xxxxxx" shall mean BCM Holdings, Inc., an Illinois
corporation and a Wholly-Owned Subsidiary of Xxxxxx.
"Base Rate" at any time shall mean the higher of (i) the rate
which is of 1% in excess of the Adjusted Certificate of Deposit Rate,
(ii) of 1% in excess of Federal Funds Rate and (iii) the Prime Lending
Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii)
each Revolving Loan designated or deemed designated as such by the Borrower
at the time of the incurrence thereof or conversion thereto.
"BCM Acquired Business" shall have the meaning provided such
term in the Existing Credit Agreement.
"BCM Acquired Debt" shall have the meaning provided such term in
the Existing Credit Agreement.
"BCM Acquisition Date" shall mean the First Amendment Effective
Date as such term is defined in the Existing Credit Agreement.
"BCM Restructuring Costs" shall have the meaning provided such
term in the Existing Credit Agreement.
"BCM Transaction" shall have the meaning provided such term in
the Existing Credit Agreement.
"Blocked Commitment" shall mean initially, $0; provided that on
each date on and after the Effective Date upon which the Borrower or any of
its Subsidiaries receives Cash Proceeds from any Asset Sale, the Blocked
Commitment shall be increased by an amount equal to 75% of the Net Cash
Proceeds therefrom; provided further, that so long as no Default under
Section 10.01 or 10.05 and no Event of Default then exists, if on the date
of the receipt of the Net Cash Proceeds of the respective Asset Sale, the
Borrower shall have furnished to the Agent an officer's certificate
executed by an Authorized Officer of the Borrower (an "Asset Sale
Certificate"), setting forth the calculations of the Leverage Ratio for the
period of four consecutive fiscal quarters (taken as one accounting period)
most recently ended prior to such Asset Sale (the "Asset Sale Calculation
Period"), on a Pro Forma Basis as provided in the definition thereof
contained herein (including, giving pro forma effect to the respective
Asset Sale), and such calculations shall demonstrate a Leverage Ratio of
less than 2.5:1, the Blocked Commitment shall not be required to be so
increased by the Net Cash Proceeds of such Asset Sale; provided further,
that, in circumstances where the immediately preceding proviso is not
applicable, (x) so long as no Default under Section 10.01 or 10.05 and no
Event of Default then exists, the Blocked Commitment shall not be required
to be so increased by the Net Cash Proceeds of any Asset Sale pursuant to
Section 9.02(ii) on the date of receipt thereof to the extent that the
Borrower has delivered a certificate to the Agent on or prior to such date
stating that it intends to reinvest such Net Cash Proceeds in like or
substantially similar equipment, materials or tangible properties or assets
within 180 days after the respective date of sale, provided, that if all or
any portion of the Net Cash Proceeds of the respective Asset Sale are not
in fact so utilized within 180 days after the respective date of sale, then
on such 180th day after the date of the respective sale, the Blocked
Commitment shall be increased by the amount of Net Cash Proceeds not
actually applied for the purposes permitted by this clause (x) as otherwise
required above by the first proviso to this definition without regard to
this clause (x) and (y) so long as no Default under Section 10.01 or 10.05
and no Event of Default then exists, the Blocked Commitment shall not be
required to be so increased by the Net Cash Proceeds of any Asset Sale
pursuant to Section 9.02(xv) on the date of receipt thereof to the extent
that the Borrower has delivered a certificate to the Agent on or prior to
such date stating that such Net Cash Proceeds shall be used to purchase
assets used or to be used in the business referred to in Section 9.07(a)
(including, without limitation, capital stock of a corporation engaged in
any such business) within 540 days following the date of such Asset Sale
(which certificate shall set forth the estimates of the proceeds to be so
expended), provided that if all or any portion of the Net Cash Proceeds of
the respective Asset Sale are not in fact so utilized within such 540 day
period, then on such 540th day after the date of the respective Asset Sale,
the Blocked Commitment shall be increased by the amount of Net Cash
Proceeds not actually applied for the purposes permitted by this clause (y)
as otherwise required above by the first proviso to this definition without
regard to this clause (y). Notwithstanding anything to the contrary
contained above, the Blocked Commitment shall be reduced (but at no time to
an amount less than $0) (x) from time to time as (and in the amounts)
provided in the last sentence of Section 3.02(a) and (y) to $0 on any date,
so long as no Default under Section 10.01 or 10.05 and no Event of Default
exists on such date, if the Borrower delivers to the Agent a certificate
executed by an Authorized Officer of the Borrower, setting forth the
calculations of the Leverage Ratio for the period of four consecutive
fiscal quarters (taking as one accounting period) most recently ended prior
to the date of the delivery of such certificate, on a Pro Forma Basis as
provided in the definition thereof contained herein (including, giving pro
forma effect to all Asset Sales which have occurred prior to the delivery
of such certificate), and such calculations demonstrate a Leverage Ratio of
less than 2.5:1.
"Borrower" shall mean the meaning provided in the first
paragraph of this Agreement.
"Borrower Common Stock" shall have the meaning provided in
Section 7.14(b).
"Borrowing" shall mean the borrowing of one Type of Loan from
all the Banks having Commitments (or from the Swingline Bank, in the case
of Swingline Loans) on a given date (or resulting from a conversion or
conversions on such date) having in the case of Eurodollar Loans the same
Interest Period, provided that Base Rate Loans incurred pursuant to Section
1.10(b) shall be considered part of the related Borrowing of Eurodollar
Loans.
"BTCo" shall mean Bankers Trust Company in its individual
capacity and any successor corporation thereto by merger, consolidation or
otherwise.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day
which shall be in New York City or Chicago, Illinois a legal holiday or a
day on which banking institutions are authorized or required by law or
other government action to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest
on, Eurodollar Loans, any day which is a Business Day described in clause
(i) above and which is also a day for trading by and between banks in the
interbank Eurodollar market.
"Calculation Period" shall have the meaning provided in Section
8.15(a)(x).
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures by such Person which should be capitalized in accordance
with generally accepted accounting principles, including all such
expenditures with respect to fixed or capital assets (including, without
limitation, expenditures for maintenance and repairs which should be
capitalized in accordance with generally accepted accounting principles)
and the amount of Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" of any Person shall mean all
rental obligations which, under GAAP, are or will be required to be
capitalized on the books of such Person, in each case taken at the amount
thereof accounted for as indebtedness in accordance with GAAP.
"Cash Equivalents" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or
any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (ii)
time deposits, certificates of deposit and bankers' acceptances of any Bank
or any commercial bank having, or which is the principal banking subsidiary
of a bank holding company organized under the laws of the United States,
any State thereof, the District of Columbia or any foreign jurisdiction
having capital, surplus and undivided profits aggregating in excess of
$500,000,000 and having a long-term unsecured debt rating of at least "A"
or the equivalent thereof from S&P's or "A2" or the equivalent thereof from
Xxxxx'x, with maturities of not more than six months from the date of
acquisition by such Person, (iii) repurchase agreements with a term of not
more than 30 days, involving securities of the types described in preceding
clause (i), and entered into with commercial banks meeting the requirements
of preceding clause (ii), (iv) commercial paper issued by any Person
incorporated in the United States rated at least A-1 or the equivalent
thereof by S&P's or at least P-1 or the equivalent thereof by Xxxxx'x and
in each case maturing not more than six months after the date of
acquisition by such Person, (v) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above and (vi) demand deposit
accounts maintained in the ordinary course of business.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred
payment, pursuant to a note, receivable or otherwise, in connection with
such Asset Sale, but only as and when so received) received by the Borrower
or any of the Borrower's Subsidiaries from such Asset Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from
time to time, 42 U.S.C. 9601 et seq.
"Certified BCM Restructuring Cost Reserve" shall have the
meaning provided such term in the Existing Credit Agreement.
"Certified Restructuring Cost Reserve" shall have the meaning
provided in Section 8.15(a)(ii).
"Change of Control" shall mean and include the occurrence of any
of the following events: (i) at any time the Jordan Affiliates (x) shall
cease to own directly at least 51% on a fully diluted basis of the Voting
Stock of Jordan, (y) shall cease to own directly at least 51% on a fully
diluted basis of all outstanding equity interests (excluding any Excluded
Preferred Stock) of Jordan or (z) shall cease to have the power (or shall
cease to exercise the power) to elect a majority of the board of directors
of Jordan, (ii) at any time Jordan or Jordan Affiliates (w) shall cease to
own directly at least 51% on a fully diluted basis of the Voting Stock of
M&G Holdings, (x) shall cease to own directly at least 51% on a fully
diluted basis of all outstanding equity interests (excluding any Excluded
Preferred Stock) of M&G Holdings, (y) shall pledge, hypothecate, encumber
or otherwise create, incur, assume or suffer to exist any Lien upon or with
respect to any capital stock of M&G Holdings owned by it, or (z) shall
cease to have the power (or shall cease to exercise the power) to elect a
majority of the board of directors of M&G Holdings, (iii) at any time M&G
Holdings (x) shall cease to own directly 51% on a fully diluted basis of
the economic and voting interests in all of the capital stock of Parent,
(y) shall pledge, hypothecate, encumber or otherwise create, incur, assume
or suffer to exist any Lien upon or with respect to any capital stock of
Parent, or (z) shall cease to have the power (or shall cease to exercise
the power) to elect a majority of the board of directors of each of the
Parent, (iv) the Parent shall (w) cease to have the power (directly or
indirectly) to elect a majority of the board of directors of each of its
Subsidiaries, (x) cease to own 100% on a fully diluted basis of the
economic and voting interests in all of the capital stock of the Borrower,
(y) cease to own the Parent Subordinated Intercompany Note or (z) pledge,
hypothecate, encumber or otherwise create, incur or suffer to exist any
Lien upon or with respect to any capital stock of the Borrower or the
Parent Subordinated Intercompany Note, or (v) any "change of control" or
similar provision or event under the Existing Seller Subordinated Note or
the Senior Unsecured Note Indenture shall occur.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and ruling issued
thereunder. Section references to the Code are to the Code, as in effect
at the date of this Agreement, and to any subsequent provisions of the
Code, amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal)
with respect to which any security interests have been granted (or
purported to be granted) pursuant to any Security Document, including,
without limitation, all Pledge Agreement Collateral, all Security Agreement
Collateral, all Mortgaged Properties and all cash and Cash Equivalents
delivered as collateral pursuant to any Credit Document. Notwithstanding
anything to the contrary contained above, Collateral shall not include any
assets so long as same constitute Excluded Collateral in accordance with
the definition thereof contained herein.
"Collateral Agent" shall mean the Agent acting as collateral
agent for the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.06.
"Commitment" shall mean, for each Bank, the amount set forth
opposite such Bank's name in Schedule I hereto directly below the column
entitled "Commitment," as the same may be (x) reduced from time to time
pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time to time
as a result of assignments to or from such Bank pursuant to 1.13 or
13.04(b).
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Consolidated EBITDA" shall mean, for any given period, the sum
of, without duplication, Consolidated Net Income for such period, plus (a)
any provision for taxes based on income or profits to the extent such
income or profits were included in computing such Consolidated Net Income,
plus (b) Consolidated Interest Expense, to the extent deducted in computing
such Consolidated Net Income, plus (c) the amortization of all intangible
assets, to the extent such amortization was deducted in computing such
Consolidated Net Income (including, but not limited to, inventory
write-ups, goodwill, debt and financing costs, and Incentive Arrangements),
plus (d) any non-capitalized transaction costs incurred in connection with
financings or acquisitions (including, but not limited to, financing and
refinancing fees, to the extent deducted in computing such Consolidated Net
Income, including those in connection with the Transaction), plus (e) all
depreciation and all other non-cash charges (including, without limitation,
those charges relating to purchase accounting adjustments and LIFO
adjustments), to the extent deducted in computing such Consolidated Net
Income, plus (f) any interest income, to the extent such income was not
included in computing such Consolidated Net Income, plus (g) all dividend
payments on preferred stock if paid in stock to the extent deducted in
computing such Consolidated Net Income, plus (h) any extraordinary or
non-recurring charge or expense arising out of the implementation of SFAS
106 or SFAS 109 to the extent deducted in computing such Consolidated Net
Income plus (i) the portion of Net Income attributable to the minority
interests in Subsidiaries of the Borrower to the extent received in cash
and not included in calculating Consolidated Net Income, plus (j) net
losses in respect of any discontinued operations, to the extent deducted in
computing Consolidated Net Income. Notwithstanding anything to the
contrary contained above, Consolidated EBITDA shall be adjusted (to the
extent not already adjusted as provided above) (x) to exclude the effects
of any extraordinary gains or losses or gains or losses from sales of
assets other than inventory sold in the ordinary course of business, to the
extent such amounts are otherwise included in Consolidated Net Income for
such period and (y) shall not give effect to any other non-cash gains,
losses or expenses otherwise included in such Consolidated Net Income.
"Consolidated Indebtedness" shall mean, at any time, and without
duplication, the sum of (A) the aggregate amount of Parent Indebtedness at
such time and (B) all Indebtedness of the Borrower and its consolidated
Subsidiaries for borrowed money, purchase money Indebtedness, all
obligations evidenced by notes or bonds, and with respect to Capitalized
Leases, as well as any other items which would be required to be accounted
for as debt of the Borrower and its consolidated Subsidiaries on the
Borrower's consolidated balance sheet in accordance with GAAP; provided,
that (u) Indebtedness under the Earnout Agreement and any Incentive
Arrangement shall not be included in Consolidated Indebtedness, (v) to the
extent not already reflected pursuant to preceding clause (B), Consolidated
Indebtedness shall be deemed to include all Attributed Receivables Facility
Indebtedness then outstanding, (w) Indebtedness outstanding in respect of
the Senior Unsecured Notes shall be excluded pursuant to preceding clause
(A) to the extent Indebtedness pursuant to the Parent Subordinated
Intercompany Note has already been included pursuant to preceding clause
(B), (x) for purposes of calculating the Leverage Ratio, the amount of
Consolidated Indebtedness shall be the amount thereof outstanding on the
last day of the respective Test Period, except that the amount of Revolving
Loans outstanding on any such date shall instead be deemed to be the daily
average outstanding principal amount of Revolving Loans during the fiscal
quarter ended on the respective Test Date (although if any Permitted
Transactions were effected during said fiscal quarter and financed in whole
or in part with Revolving Loans, the calculation of the average outstanding
Revolving Loans during such fiscal quarter shall be made on a Pro Forma
Basis), (y) to the extent the Existing Seller Installment Note is fully
supported by the Existing Seller Letter of Credit, and so long as same is
fully collateralized by the Existing Seller Letter of Credit Cash
Collateral, the Existing Seller Installment Note and Existing Seller Letter
of Credit shall not be included in Consolidated Indebtedness regardless of
whether a different treatment is required in accordance with GAAP and (z)
in any event the aggregate principal amount of all Loans (subject to
preceding clause (x) in the case of Revolving Loans), the Existing Seller
Subordinated Note, the Parent Subordinated Intercompany Note and any
Permitted Acquired Debt or Permitted Debt shall be included in the
Consolidated Indebtedness.
"Consolidated Interest Coverage Ratio" shall mean, for any
period, the ratio of (x) Consolidated EBITDA for such period to (y)
Consolidated Interest Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, the
aggregate of the interest expense in respect of all Indebtedness of the
Borrower and its Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP (including amortization of original
issue discount of any such Indebtedness, all non-cash interest payments,
the interest portion of any deferred payment obligation, the interest
component of capital lease obligations and, except as otherwise provided
below, the amortization of deferred financing fees if such amortization
would otherwise be included in interest expense); provided that there shall
be excluded from Consolidated Interest Expense the amortization of any
deferred financing costs incurred in connection with this Agreement, the
reimbursement agreement with respect to the Existing Seller Letter of
Credit, the Existing Seller Installment Note, the Existing Seller
Subordinated Note, the Parent Subordinated Intercompany Note and
Indebtedness otherwise permitted under this Agreement, in each case to the
extent included in such Consolidated Interest Expense. Notwithstanding
anything to the contrary contained above or required by GAAP, Consolidated
Interest Expense shall also include (and, to the extent such amounts are
not already included, Consolidated Interest Expense shall be increased by
the amount of) the amount of all Dividends paid (or deemed paid) during the
respective period pursuant to Section 9.03(iii) to the extent such
Dividends are used to pay interest on Shareholder Subordinated Notes, (ii)
the amount of Receivables Facility Financing Costs during the respective
period and (iii) the amount of Parent Interest Expense during the
respective period, to the extent in excess of the amount of interest
expense of Borrower relating to the Parent Subordinated Intercompany Note
already reflected in Consolidated Interest Expense for such period without
regard to this sentence.
"Consolidated Net Income" shall mean, for any period, the after
tax Net Income (or loss) of the Borrower and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP;
provided, however, that (A) there shall be excluded (without duplication)
(i) income (or loss) of any Person (other than a consolidated Subsidiary of
such Person) in which any other Person (other than such Person or any of
its consolidated Subsidiaries) has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to such
Person or (subject to subclause (iii) below) any of its consolidated
Subsidiaries by such other Person during such period, (ii) except as
otherwise expressly required for calculations being made on a Pro Forma
Basis, the income (or loss) of any Person during such period accrued prior
to the date it becomes a consolidated Subsidiary of such Person or is
merged into or consolidated with such Person or any of its consolidated
Subsidiaries, (iii) the income of any consolidated Subsidiary of the
Borrower to the extent attributable to minority interests held directly or
indirectly therein by Persons other than the Borrower and its Wholly-Owned
Subsidiaries, and (iv) the income of any consolidated Subsidiary of the
Borrower during such period to the extent that the declaration or payment
of dividends or similar distributions by that consolidated Subsidiary of
such income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary or the
Borrower or any of its other Subsidiaries, (B) to the extent Consolidated
Net Income for any period would otherwise be reduced by the amount of fees
and expenses paid in connection with the Transaction, fees and expenses
paid, and/or BCM Restructuring Costs incurred, in connection with the BCM
Transaction, or fees and expenses and/or Restructuring Costs incurred with
respect to any Permitted Transaction, such amounts shall be added back in
determining Consolidated Net Income but, in the case of such items relating
to Permitted Transactions, only to the extent such amounts do not exceed
the respective amounts included within the Permitted Transaction Cost of
the respective Permitted Transaction as certified by the Borrower in
connection therewith pursuant to Section 8.15(a)(ii)(v) and (y) and, in the
case of such items relating to the BCM Transaction, only to the extent such
amounts do not exceed the respective amounts in connection therewith
certified by Xxxxxx pursuant to Section 9.02(xii)(c)(w) and (y) of the
Existing Credit Agreement, (C) to the extent same have not already reduced
Consolidated Net Income for the respective period, the amount of all
Restricted Payments paid (or deemed paid) during the respective period
pursuant to any of Sections 9.03(ii), (v), (vi), and (ix)(II) and all
amounts paid during the respective period pursuant to any of Section
9.06(y)(iv), (vi), (viii), (x) and (xi) shall be deducted, (D)
notwithstanding any contrary treatment which would otherwise be required
pursuant to GAAP, payments made pursuant to either of Sections 9.06(y)(vii)
and/or (ix) shall not be deducted in determining Consolidated Net Income,
(E) Parent Interest Expense (but only to the extent in excess of the
interest expense of the Borrower in respect of the Parent Subordinated
Intercompany Note to the extent already deducted in determining
Consolidated Net Income) shall be deducted in determining Consolidated Net
Income and (F) notwithstanding any contrary treatment which would otherwise
be required pursuant to GAAP, extraordinary or nonrecurring charges
relating to any premium or penalty paid, write-off or deferred financing
costs or other financial recapitalization charges in connection with
redeeming or retiring any Indebtedness prior to its stated maturity shall
not be deducted in determining Consolidated Net Income.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (i) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (x) for the purchase or
payment of any such primary obligation or (y) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of
any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement,
each Note, each Letter of Credit, each Security Document, each Guaranty,
each Additional Security Document and each additional guaranty or security
document or instrument executed pursuant to Sections 8.11, 8.15 and/or
9.13.
"Credit Event" shall mean the making of any Loan or the issuance
of any Letter of Credit.
"Credit Party" shall mean the Borrower and each Subsidiary
Guarantor.
"Debt Agreements" shall have the meaning provided in Section
5.06.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Designated Credit Parties" shall mean the Borrower and those
Subsidiary Guarantors that are from time to time party to the Receivables
Facility Documents.
"Director Indemnity Agreement" shall mean the Director
Indemnification Agreement, dated as of November 7, 1996, by and among M&G
Holdings, Parent, Xxxxxx, the Borrower, Xxxxxx, Acquisition Corp., Xxxxx
Acquisition Sub., Gear Acquisition Sub. and each of the indemnitees whose
names are set forth therein, as in effect on the Effective Date and as
amended, modified or supplemented from time to time in accordance with the
terms hereof and thereof.
"Dividends" with respect to any Person shall mean that such
Person has declared or paid a dividend or returned any equity capital to
its stockholders or partners or authorized or made any other distribution,
payment or delivery of property (other than common stock of such Person) or
cash to its stockholders or partners as such, or redeemed, retired,
purchased or otherwise acquired, directly or indirectly, for a
consideration any shares of any class of its capital stock or any
partnership interests outstanding on or after the Effective Date (or any
options or warrants issued by such Person with respect to its capital
stock), or set aside any funds for any of the foregoing purposes, or shall
have permitted any of its Subsidiaries to purchase or otherwise acquire for
a consideration any shares of any class of the capital stock or any
partnership interests of such Person outstanding on or after the Effective
Date (or any options or warrants issued by such Person with respect to its
capital stock). Without limiting the foregoing, "Dividends" with respect
to any Person shall also include all payments made or required to be made
by such Person with respect to any Incentive Arrangements and any stock
appreciation rights, "phantom" stock plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"Documents" shall mean the Credit Documents, the Acquisition
Documents, the Merger Documents, the Refinancing Documents, the Senior
Unsecured Note Documents and, on and after the Receivables Facility
Transaction Date, the Receivables Facility Documents.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
which is not a Foreign Subsidiary.
"Drawing" shall have the meaning provided in Section 2.05.
"Earnout" shall mean the contingent payment payable pursuant to
the Earnout Agreement in an amount equal to 50% of the cumulative EBITDA
(as defined in the Earnout Agreement) of Acquisition Corp., Xxxxx
Acquisition Sub. and Gear Acquisition Sub. earned during the five fiscal
years ended December 31, 1996 through December 31, 2000 in excess of
$50,000,000.
"Earnout Agreement" shall mean the Earnout Agreement, dated as
of November 7, 1996, among Jordan, Parent, the Borrower, Acquisition Corp.,
Xxxxx Acquisition Sub. and Gear Acquisition Sub., as the same may be
amended, modified or supplemented from time to time pursuant to the terms
hereof and thereof.
"Effective Date" shall have the meaning provided in Section
13.10.
"80%-Owned Subsidiary" shall mean any Subsidiary of the Borrower
which either (x) is a Wholly-Owned Subsidiary of the Borrower or (y) is not
a Wholly-Owned Subsidiary of the Borrower, but is a Subsidiary wherein the
Borrower and its Wholly-Owned Subsidiaries own at least 80% of the equity
interests therein and in which no portion of the capital stock (or other
equity interests) of such Subsidiary not owned by the Borrower or its
Wholly-Owned Subsidiaries shall be owned by any Person other than Jordan,
Jordan Affiliates and/or management of the respective such Subsidiary.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other institutional "accredited investor" as
defined in Regulation D of the Securities Act.
"Elmco" shall mean Elmco Industries, Inc., an Illinois
corporation.
"Elmco Refund" shall mean the refund, or any right to receive
the refund, of the payment Elmco made prior to the Original Effective Date
pursuant to Code Section 7519(b), which refund is referenced in Section
6.06(l) of the Acquisition Agreement (as defined in the Existing Credit
Agreement).
"Elmco Refund Obligation" shall mean the assignment by Xxxxxx
of, and the obligation of Xxxxxx to pay the amount of the Elmco Refund
actually received to, the XX Xxxxxxx pursuant to Section 6.06(l) of the
Acquisition Agreement (as defined in the Existing Credit Agreement).
"Employee Benefit Plans" shall have the meaning provided in
Section 5.06.
"Employment Agreements" shall have the meaning provided in
Section 5.06.
"End Date" shall have the meaning provided in the definition of
Interest Reduction Discount.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of non-compliance or violation, investigations,
orders or proceedings relating in any way to any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereinafter, "Claims"), including, without limitation, (a) any and all
Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation
or injunctive relief resulting from Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code, binding
and enforceable guideline, binding and enforceable written policy and rule
of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment relating to
the environment, employee health and safety or Hazardous Materials,
including, without limitation, CERCLA; RCRA; the Federal Water Pollution
Control Act, 33 U.S.C. 2601 et seq., the Clean Air Act, 42 U.S.C. 7401
et seq.; the Safe Drinking Water Act, 42 U.S.C. 3803 et seq.; the Oil
Pollution Act of 1990, 33 U.S.C. 2701 et seq.; the Emergency Planning and
the Community Right-to-Know Act of 1986, 42 U.S.C. 11001 et seq., the
Hazardous Material Transportation Act, 49 U.S.C. 1801 et seq. and the
Occupational Safety and Health Act, 29 U.S.C. 651 et seq. (to the extent
it regulates occupational exposure to Hazardous Materials); and any state
and local or foreign counterparts or equivalents, in each case as amended
from time to time.
"Equity Financing Documents" shall have the meaning provided in
the Existing Credit Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section
3(9) of ERISA) which together with Parent or a Subsidiary of Parent or the
Guarantors would be deemed to be a "single employer" (i) within the meaning
of Section 414(b),(c), (m) or (o) of the Code or (ii) as a result of
Parent, or a Subsidiary of Parent, or the Guarantors being or having been a
general partner of such person.
"Eurodollar Loan" shall mean each Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean with respect to each Interest
Period for a Eurodollar Loan, (a) the offered quotation to first-class
banks in the interbank Eurodollar market by BTCo for Dollar deposits of
amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of BTCo with maturities comparable
to the Interest Period applicable to such Eurodollar Loan commencing two
Business Days thereafter as of 10:00 A.M. (New York time) on the date which
is two Business Days prior to the commencement of such Interest Period,
divided (and rounded off to the nearest 1/16 of 1% or, if there is no
nearest 1/16 of 1%, to the next highest 1/16 of 1%) by (b) a percentage
equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency funding or liabilities as defined in Regulation D (or any
successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section
10.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Excluded Collateral" shall mean and include each of (i) any
Leasehold in which a security interest is not required to be granted by
reason of the penultimate sentence of Section 8.11(a), (ii) Real Property
owned by any Credit Party if the fair market value of such Real Property
(as determined in good faith by senior management of the Borrower) is less
than $5,000,000, (iii) motor vehicles and other equipment the ownership of
which is evidenced by a "certificate of title" under relevant law owned by
any Credit Party, (iv) any assets of a Foreign Subsidiary of the Borrower
or otherwise located outside the United States (including its states and
territories), (v) any capital stock of, or promissory notes payable by, a
Foreign Subsidiary to the extent (and only to the extent) that such capital
stock or promissory notes, as the case may be, are not required to be
pledged pursuant to the exclusions contained in the Pledge Agreement as
originally in effect, (vi) so long as the Existing Seller Letter of Credit
remains outstanding, the Existing Seller Letter of Credit Cash Collateral
and any investments from time to time made pursuant to the Existing Seller
Letter of Credit Collateral Agreement, and (vii) the Elmco Tax Refund and
any rights with respect thereto.
"Excluded Preferred Stock" shall mean, with respect to any
Person, any preferred stock issued by such Person which (i) is not Voting
Stock of such Person, (ii) bears dividends at a contractually established
rate, and does not participate with any class of common stock in the
payment of dividends in excess of said stated rate, (iii) matures or is
redeemable at the option of the issuer after a given period of time as
provided therein and (iv) is not convertible into common stock or other
Voting Stock.
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of September 22, 1995, among Parent, Xxxxxx, the institutions from
time to time party thereto, and Bankers Trust Company, as Agent, as in
effect on the Effective Date.
"Existing Indebtedness" shall have the meaning provided in
Section 5.19.
"Existing Seller Installment Note" shall mean the promissory
note issued in connection with the Original Acquisition by Xxxxxx to the XX
Xxxxxxx as partial consideration for the Original Acquired Business having
a principal amount not to exceed $90,000,000, in the form of Exhibit Q, and
which promissory note shall mature no later than December 31, 1996 and be
supported by the Existing Seller Letter of Credit.
"Existing Seller Letter of Credit" shall mean a standby letter
of credit issued by BTCo for the account of Xxxxxx in support of the
obligations of Xxxxxx under the Existing Seller Installment Note issued by
Xxxxxx, which letter of credit shall have a face amount not to exceed
$90,000,000.
"Existing Seller Letter of Credit Agreement" shall mean the
Letter of Credit Agreement, dated as of September 22, 1995, between Parent,
Xxxxxx and BTCo, as amended, modified or supplemented from time to time.
"Existing Seller Letter of Credit Cash Collateral" shall have
the meaning provided in Section 9.01(xv).
"Existing Seller Letter of Credit Collateral Agreement" shall
mean the Letter of Credit Cash Collateral Agreement, dated as of September
22, 1995, between Xxxxxx and BTCo, as amended, modified or supplemented
from time to time.
"Existing Seller Subordinated Note" shall mean 9% Existing
Seller Subordinated Note due December 31, 2003 issued by Xxxxxx in favor of
XX Xxxxxxx as partial consideration for the purchase price of the Original
Acquired Business in an aggregate principal amount of $5,000,000, in the
form attached hereto as Exhibit O, as in effect on the Original Effective
Date and as the same may be amended, modified or supplemented from time to
time pursuant to the terms hereof and thereof.
"Existing Seller Subordinated Note Documents" shall mean and
include the Existing Seller Subordinated Note and each of the other
documents, instruments and other agreements entered into and relating to
the issuance by Xxxxxx of the Existing Seller Subordinated Note, as in
effect on the Original Effective Date and as amended, modified or
supplemented from time to time in accordance with the terms hereof and
thereof.
"Existing Tax Sharing Agreement" shall mean the Tax Sharing
Agreement, dated as of June 28, 1994, among Jordan and each of the other
parties thereto, as in effect on the Effective Date and as the same may be
amended, modified or supplemented from time to time in accordance with the
terms hereof and thereof, including, without limitation, as amended on the
Initial Borrowing Date to add the Borrower, Acquisition Corp., Xxxxx
Acquisition Sub. and Gear Acquisition Sub. as parties thereto.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average
of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from
three Federal Funds brokers of recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to or referred to
in Section 3.01.
"Final Maturity Date" shall mean the fifth anniversary of the
Initial Borrowing Date.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower
that is incorporated under the laws of any jurisdiction other than the
United States of America, any State thereof, or any territory thereof.
"GAAP" shall have the meaning provided in section 13.07(a).
"Gear" shall mean Gear Research, Inc., a Delaware corporation
and a direct Wholly-Owned Subsidiary of Imperial.
"Gear Acquisition Sub" shall mean New Gear Research, Inc., a
Delaware corporation and a direct Wholly-Owned Subsidiary of Acquisition
Corp.
"Gear Intercompany Note" shall have the meaning provided in
Section 5.23(c).
"Guaranty" shall mean the Subsidiary Guaranty and, after the
execution and delivery thereof, the Non-Wholly-Owned Subsidiary Guaranty
and each other guaranty executed pursuant to Sections 8.11, 8.15 and/or
9.13.
"Hazardous Materials" shall mean (a) oil as defined by the Oil
Pollution Act of 1990, 33 U.S.C. 2701 et seq., (b) any petrochemical or
petroleum products, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation, transformers or
other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls, and radon gas; (c) any chemicals, materials or
substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "restricted
hazardous materials," "extremely hazardous wastes," "restrictive hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants" or
"pollutants," or words of similar meaning and regulatory effect under any
applicable Environmental Law; or (d) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority.
"Imperial" shall mean Imperial Electric Company, an Ohio
corporation and a direct Wholly-Owned Subsidiary of Jordan.
"Incentive Arrangements" shall mean (x) any stock appreciation
rights, "phantom" stock plans, employment agreements, non-competition
agreements, earn out agreements and other equity incentive and bonus plans
and similar arrangements made by the Borrower and its Subsidiaries in
connection with a Permitted Transaction or the retention of executives or
officers by the Borrower and its Subsidiaries and (y) all Permitted
Earn-Out Debt issued in connection with Permitted Transactions.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase
price of property or services, (ii) the maximum amount available to be
drawn under all letters of credit issued for the account of such Person and
all unpaid drawings in respect of such letters of credit, (iii) all
Indebtedness of the types described in clause (i), (ii), (iv), (v), (vi) or
(vii) of this definition secured by any Lien on any property owned by such
Person, whether or not such Indebtedness has been assumed by such Person
(to the extent of the value of the respective property), (iv) Capitalized
Lease Obligations, (v) all obligations of such person to pay a specified
purchase price for goods or services, whether or not delivered or accepted,
i.e., take-or-pay and similar obligations, (vi) all Contingent Obligations
of such Person, and (vii) all obligations under any Other Hedging Agreement
or under any similar type of agreement or arrangement. In addition, all
Attributed Receivables Facility Indebtedness shall constitute Indebtedness.
"Initial Borrowing Date" shall mean the date occurring on or
after the Effective Date on which the initial Borrowing of Loans hereunder
occurs.
"Initial Receivables Facility Proceeds" shall mean the amount of
cash proceeds to be initially received by the Borrower and/or the other
Designated Credit Parties from the sale of Receivables Facility Assets to
the Receivables Entity pursuant to the Receivables Facility.
"Insignificant Subsidiary" shall mean any Subsidiary of the
Borrower which has assets of not greater than $5,000,000 in the aggregate
and which, if aggregated with all other Subsidiaries of the Borrower with
respect to which an event described under Section 10.05 and/or 10.09 has
occurred and is continuing, would have assets of not greater than
$5,000,000.
"Intercompany Loan" shall mean any loan or advance made by the
Borrower or any Subsidiary of the Borrower to the extent permitted by
Section 9.05(iii).
"Intercompany Management Consulting Agreements" shall mean and
include each of (i) the Management Consulting Agreement, dated as of
September 22, 1995, by and between M&G Holdings and Xxxxxx, as in effect on
the Original Effective Date and (ii) the Management Consulting Agreement,
dated as of September 22, 1995, by and between M&G Holdings and Parent, as
in effect on the Original Effective Date, in each case as the same may be
amended, modified or supplemented from time to time in accordance with the
terms hereof and thereof.
"Intercompany Notes" shall mean promissory notes, in the form of
Exhibit M, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedging agreement, interest rate floor agreement
or other similar agreement or arrangement designed to protect a person
against fluctuations in interest rates.
"Interest Reduction Discount" shall mean initially zero and from
and after the first day of any Margin Reduction Period (the "Start Date")
to and including the last day of such Margin Reduction Period (the "End
Date"), the Interest Reduction Discount shall be the respective percentage
per annum set forth in clause (A) or(B) below if, but only if, as of the
last day of the most recent Test Period of the Borrower ended immediately
prior to such Start Date (the "Test Date") the conditions in clause (A) or
(B) below are met:
(A) 1/4 of 1% if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test
Date shall be equal to or greater than 4.75:1.0 but less than
5.0:1.0; or
(B) 1/2 of 1% if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test
Date shall be less than 4.75:1.0.
The Leverage Ratio shall be determined for the relevant Test Period, in
each case taken as one accounting period, by delivery of an officer's
certificate of the Borrower to the Banks pursuant to Section 8.01(e), which
certificate shall set forth the calculation of the Leverage Ratio. The
Interest Reduction Discount so determined shall apply, except as set forth
below, from the date on which such officer's certificate is delivered to
the Agent to the earlier of (x) the date on which the next certificate is
delivered to the Agent pursuant to Section 8.01(e) and (y) the 45th day
following the first day of the fiscal quarter immediately following the
delivery of such certificate to the Agent. Notwithstanding anything to the
contrary contained above, the Interest Reduction Discount shall be zero if
no officer's certificate has been delivered to the Banks pursuant to
Section 8.01(e) which sets forth the Leverage Ratio for the relevant Test
Period or the financial statements upon which any such calculations are
based have not been delivered, until such a certificate and/or financial
statements are delivered. Notwithstanding anything to the contrary above
in this definition, the Interest Reduction Discount shall be zero at all
times when there shall exist a Default under Section 10.01 or 10.05 or any
Event of Default. It is understood and agreed that the Interest Reduction
Discount as provided above shall in no event be cumulative and only the
Interest Reduction Discount available pursuant to either clause (A) or (B),
if any, contained in this definition shall be applicable.
"Investment" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean BTCo and any Bank which at the request
of the Borrower and with the consent of the Agent agrees, in such Bank's
sole discretion, to become an Issuing Bank for the purpose of issuing
Letters of Credit pursuant to Section 2. The sole Issuing Bank on the
Initial Borrowing Date is BTCo.
"JI Partners" shall mean the JI Partners, an Illinois general
partnership.
"JII Services Agreement" shall mean the Management Services and
Administration Agreement, dated as of November 7, 1996, between Jordan and
Parent, in the form delivered to the Agent and Banks on the Effective Date,
as the same may be amended, modified or supplemented from time to time
pursuant to the terms thereof and hereof.
"Jordan" shall mean Jordan Industries, Inc., a Delaware
corporation.
"Jordan Affiliates" shall mean and include each of (i) TJC,
Jordan/Zalaznick Capital Company, JI Partners Limited Partnership, Jordan,
Mezzanine Capital Income Trust and Leucadia Investors, Inc.; (ii) partners,
principals, directors, officers and employees of the Persons referred to in
clause (i) hereof; (iii) The Xxxx X. Xxxxxx XX Revocable Trust, The Jordan
Family Trust and/or any other trusts established by Xxxx X. Xxxxxx XX so
long as the beneficiaries thereof include only his spouse, parents,
siblings or direct lineal descendants and so long as Xxxx X. Xxxxxx XX
possesses the power to direct or cause the direction of the voting of such
trusts; and (iv) any other trust established by the Persons referred to in
clause (ii) hereof, so long as the beneficiaries thereof include only the
spouse, siblings, parents, or direct lineal descendants of such Person and
such Person possesses the power to direct or cause the direction of the
voting of such trust.
"L/C Supportable Indebtedness" shall mean (i) obligations of any
Credit Party incurred in the ordinary course of business with respect to
insurance obligations and workers' compensation, surety bonds and other
similar statutory obligations and (ii) such other obligations of the
Borrower or any Subsidiary Guarantor as are permitted to remain outstanding
hereunder without giving rise to any violation of this Agreement.
"Leaseholds" of any Person means all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum
of (i) the aggregate Stated Amount of all outstanding Letters of Credit and
(ii) the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, as determined on the last day of
any fiscal quarter or fiscal year, the ratio of (x) Consolidated
Indebtedness as determined on the last day of such fiscal quarter or fiscal
year to (y) Consolidated EBITDA for the Test Period then last ended;
provided that for purposes of any calculation of the Leverage Ratio in
connection with the delivery of an Asset Sale Certificate or other
certificate in accordance with the requirements of the definition of
Blocked Commitment, Consolidated Indebtedness shall not include Parent
Indebtedness and it shall not include Indebtedness pursuant to the Parent
Subordinated Intercompany Note. All calculations of the Leverage Ratio
shall be made on a Pro Forma Basis.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other) or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the UCC or any other similar recording or notice statute, and
any lease having substantially the same effect as any of the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"M&G Holdings" shall mean Motors and Gears Holdings, Inc., a
Delaware corporation and the surviving corporation of the merger of M&G
Holdings, Inc. with and into same.
"M&G Holdings Common Stock" shall mean the common stock, $.01
par value per share, of M&G Holdings.
"M&G Holdings Management Consulting Agreements" shall mean and
include each of (i) the Management Consulting Agreement, dated as of
September 22, 1995, between TJC, M&G Holdings and Parent, as amended on
November 7, 1996 to include Parent as a party thereto, in the form
delivered to the Agent and the Banks on the Effective Date and (ii) the
Management Consulting Agreement, dated as of September 22, 1995, between
Jordan and M&G Holdings, in the form delivered to the Agent and the Banks
on the Original Effective Date.
"Management Agreements" shall have the meaning provided in
Section 5.06.
"Management Investors" shall mean (i) any officer or managerial
employee of Parent or any of its Subsidiaries who acquires M&G Holdings
Common Stock from M&G Holdings pursuant to the Management Subscription
Agreement or the Stockholders' Agreement, (ii) the JI Partners and (ii) the
directors of M&G Holdings.
"Management Subscription Agreement" shall mean and include each
of (i) the Management Subscription Agreement, dated as of September 22,
1995, by and among M&G Holdings and the stockholders whose names are set
forth therein, in the form delivered to the Agent and the Banks on the
Initial Borrowing Date, provided that future Management Investors may
become party thereto by executing a counterpart thereof after the Initial
Borrowing Date and (ii) the Management Subscription Agreement, dated as of
November 7, 1996, by and among M&G Holdings and Xxx Xxxxxx, in the form
delivered to the Agent and the Banks on the Initial Borrowing Date.
"Mandatory Borrowings" shall have the meaning provided in
Section 1.01(c).
"Margin Reduction Period" shall mean each period which shall
commence on a date on which the officer's certificate is delivered to the
Agent pursuant to Section 8.01(e) to the earlier of (x) the date on which
the certificate for the next fiscal quarter is delivered to the Agent
pursuant to Section 8.01(e) and (y) the 45th day following the first day of
the fiscal quarter immediately following the delivery of such certificate
to the Agent, provided that the first Margin Reduction Period shall
commence no earlier than the date of the delivery of the financial
statements pursuant to Section 8.01(b) for the first fiscal quarter of the
Parent ended at least one year after the Initial Borrowing Date.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Contracts" shall have the meaning provided in Section
5.06.
"Maximum Swingline Amount" shall mean $2,000,000.
"Mercury" shall have the meaning provided in the Existing Credit
Agreement.
"Merger" shall mean the merger of MK Group with and into Parent
pursuant to the Merger Documents, with Parent as the surviving corporation
of such merger, as the direct Wholly-Owned Subsidiary of M&G Holdings,
Inc., an Illinois corporation.
"Merger Documents" shall mean the Merger Agreement, dated as of
November 1, 1996, between Parent and MK Group, the certificate of merger
and all other agreements, instruments and documents entered into in
connection with the Merger, as the same may be amended, modified or
supplemented from time to time pursuant to the terms hereof and thereof.
"Xxxxxx" shall mean Xxxxxx-Xxxxx Industries, Inc., an Illinois
corporation, and, prior to the consummation of the Merger and the MK Stock
Contribution, a Wholly-Owned Subsidiary of MK Group and, after giving
effect to the consummation of the Merger and the MK Stock Contribution, a
Wholly-Owned Subsidiary of the Borrower.
"MK" shall mean Xxxxxx as such term is defined in the Existing
Credit Agreement.
"MK Group" shall mean MK Group, Inc., an Illinois corporation.
"MK Leaseholds" shall mean and include the Leaseholds of (i)
Xxxxxx as lessee under the Affiliate Leases and (ii) BCM Holdings as lessee
under [name lease].
"XX Xxxxxxx" shall mean the Sellers as such term is defined in
the Existing Credit Agreement.
"MK Stock Contribution" shall have the meaning provided in
Section 5.11(c).
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans
(x) maintained as Base Rate Loans, $100,000 and, if greater, in integral
multiples of $100,000 and (y) maintained as Eurodollar Loans, $1,000,000
and, if greater, in integral multiples of $100,000 and (ii) for Swingline
Loans, $10,000 and, if greater, in integral multiples of $5,000.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Mortgage" shall mean each mortgage, deed of trust or deed to
secure debt required to be delivered with respect to any Real Property
pursuant to the terms of this Agreement, together with any assignment of
leases and rents to be executed in connection therewith.
"Mortgage Policy" shall mean each mortgage title insurance
policy (and all endorsements thereto) for each Mortgaged Property required
to be delivered pursuant to this Agreement.
"Mortgaged Property" shall mean each Real Property owned or
leased by the Borrower or any of its Subsidiaries and required to be
mortgaged pursuant to Section 8.11 of this Agreement.
"Net Asset Adjustment" shall mean the adjustment to the Purchase
Price (as defined in the Existing Credit Agreement) contained in Section
1.06 of the Acquisition Agreement (as defined in the Existing Credit
Agreement), so long as such adjustment in no event results in an increase
to such Purchase Price of more than $2,500,000.
"Net Cash Proceeds" shall mean, with (i) respect to any Asset
Sale, the Cash Proceeds resulting therefrom net of (w) cash expenses of
sale (including, without limitation, reasonable brokerage and attorneys'
fees, if any, and payment of principal, premium and interest of
Indebtedness other than the Loans required to be repaid as a result of such
Asset Sale), (x) estimated marginal increase in income taxes paid or
payable by the Borrower's consolidated group with respect to the fiscal
year in which such sale occurs as a result thereof, (y) any amounts
required to be escrowed in connection with the respective Asset Sale,
provided that upon the release of any such escrowed amounts to the Borrower
or any of its Subsidiaries, such released proceeds shall be treated as Net
Cash Proceeds of the respective Asset Sale, and (z) any reserves and
holdbacks in good faith established by the Borrower in connection with any
liabilities assumed by it in connection with the respective Asset Sale, so
long as determined in accordance with GAAP and reasonably expected to be
utilized within the 12 months following the date of the respective Asset
Sale, provided that on the date which occurs 12 months after the respective
Asset Sale, to the extent any such reserves or holdbacks remain, the amount
thereof shall be deemed to constitute Net Cash Proceeds from the respective
Asset Sale, and (ii) with respect to any issuance of debt or equity, the
cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and
when received) received from such event, net of transaction costs
(including, as applicable, any underwriting, brokerage or other customary
commissions and reasonable legal and other fees and expenses associated
therewith) incurred in connection therewith.
"Net Income" shall mean, with respect to any person, the net
income (loss) of such person, determined in accordance with GAAP,
excluding, however, any gain or loss, together with any related provision
for taxes, realized in connection with any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions).
"Non-Defaulting Bank" shall mean and include each Bank other
than a Defaulting Bank.
"Non-Wholly-Owned Domestic Subsidiary" shall mean, as to any
Person, any Non-Wholly-Owned Subsidiary of such Person which is a Domestic
Subsidiary.
"Non-Wholly-Owned Subsidiary" shall mean each Subsidiary other
than a Wholly-Owned Subsidiary.
"Non-Wholly-Owned Subsidiary Guaranty" shall mean, after the
execution and delivery thereof, the Non-Wholly-Owned Subsidiary Guaranty
entered into by each Non-Wholly-Owned Domestic Subsidiary of the Borrower
pursuant to Section 8.11, in the form of Exhibit L hereto, as the same may
be amended, modified or supplemented from time to time.
"Note" shall mean each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03.
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Agent located at
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxx Xxxxx,
or such other office as the Agent may hereafter designate in writing as
such to the other parties hereto.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time
existing, owing to the Agent, the Collateral Agent or any Bank pursuant to
the terms of this Agreement or any other Credit Document.
"Original Acquired Business" shall mean the Acquired Business as
defined in the Existing Credit Agreement.
"Original Acquisition" shall mean the Acquisition as defined in
the Existing Credit Agreement.
"Original Effective Date" shall mean the Effective Date under,
and as defined in, the Existing Credit Agreement.
"Other Hedging Agreements" shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency values.
"Parent" shall mean Motors & Gears, Inc., a Delaware
corporation, as successor by Merger to MK Group.
"Parent Indebtedness" shall mean, at any time, (x) all
Indebtedness of Parent for borrowed money, purchase money Indebtedness, all
obligations evidenced by notes or bonds and any other items which would be
required to be accounted for as debt of Parent on Parent's consolidating
balance sheet in accordance with GAAP and (y) all Contingent Obligations of
Parent in respect of obligations of any other Persons (other than the
Borrower and its Subsidiaries); provided that Parent Indebtedness shall not
include Indebtedness of any Subsidiary of Parent with respect to which (x)
Parent is neither a co-obligor nor has any Contingent Obligation or (y) the
sole recourse to Parent is contractually limited to the Parent's equity
interests in the respective Subsidiary of Parent (which may not be the
Borrower) which has directly incurred the respective Indebtedness.
"Parent Interest Expense" shall mean, for any period, the
aggregate of the interest expense in respect of all Indebtedness of the
Parent (but not of its Subsidiaries except to the extent same also
constitutes Indebtedness of the Parent) for such period, determined in
accordance with GAAP (including amortization of original issue discount of
any such Indebtedness, all non-cash interest payments, the interest portion
of any deferred payment obligation, the interest component of capital lease
obligations and, except as otherwise provided below, the amortization of
deferred financing fees if such amortization would otherwise be included in
interest expense); provided that there shall be excluded from Parent
Interest Expense the amortization of any deferred financing costs incurred
in connection with the Senior Unsecured Notes. Notwithstanding anything to
the contrary contained above or otherwise required by GAAP, Parent Interest
Expense shall include all interest expense in respect of Senior Unsecured
Notes.
"Parent Subordinated Intercompany Note" shall have the meaning
provided in Section 5.23(a).
"Participant" shall have the meaning provided in Section 2.04.
"Payment Office" shall mean the office of the Agent located at
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other office as the
Agent may hereafter designate in writing as such to the other parties
hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Commitment of
such Bank at such time and the denominator of which is the Total Commitment
at such time, provided that if the Percentage of any Bank is to be
determined after the Total Commitment has been terminated, then the
Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Acquired Business" shall mean the business, division
or product line of any Person, including the capital stock of any such
Person, acquired in connection with a Permitted Transaction.
"Permitted Acquired Debt" shall mean Indebtedness of a
Subsidiary of the Borrower acquired after the Initial Borrowing Date
pursuant to a Permitted Transaction, to the extent such indebtedness was
outstanding prior to the consummation of the Permitted Transaction and
remains outstanding as Indebtedness of the respective Subsidiary after
giving effect thereto, provided that (i) such Indebtedness was not incurred
in connection with or in anticipation of such Permitted Transaction or the
respective Person becoming Subsidiary of the Borrower, (ii) such
Indebtedness does not constitute Indebtedness of the Borrower or any of
their Subsidiaries other than the respective Subsidiary acquired pursuant
to the respective Permitted Transaction and shall not be secured by any
assets of any Person other than assets of the Subsidiary so acquired
serving as security therefor at the time of the respective Permitted
Transaction and (iii) no Person other than the respective Subsidiary shall
have any liability (contingent or otherwise) with respect to any Permitted
Acquired Debt.
"Permitted Acquisition" shall mean the acquisition by the
Borrower or any 80%-Owned Subsidiary of the Borrower (other than the
Receivables Entity) of assets constituting a business, division or product
line of any Person not already a Subsidiary of the Borrower or such
Subsidiary or at least 80% of the capital stock of any such Person,
although any such acquisition shall only be a Permitted Acquisition so long
as (A) the consideration therefor consists solely of cash (including from
proceeds of Revolving Loans), Permitted Debt, Permitted Acquired Debt
and/or Permitted Earn-Out Debt, (B) the assets acquired will be used solely
in, or the business of the Person whose stock is acquired consists solely
of, any or all of the same business lines permitted by Section 9.07, and
(C) those acquisitions that are structured as stock acquisitions shall be
effected through a purchase of no less than 80% of the capital stock of
such Person by the Borrower or such Subsidiary or through a merger between
such Person and a newly-formed direct Subsidiary of the Borrower or such
Subsidiary, as the case may be, so that after giving effect to the
respective acquisition the Permitted Acquired Business is owned by an
80%-Owned Subsidiary and (D) all requirements of Section 8.15 with respect
to Permitted Acquisitions are met with respect thereto. Notwithstanding
anything to the contrary contained above or in Section 8.15, an acquisition
not otherwise meeting all the requirements set forth in the definition of
Permitted Acquisition above or in Section 8.15 may be consummated as a
"Permitted Acquisition" for all purposes of this Agreement, but only so
long as the Required Banks specifically consent in writing to such
acquisition and agree in writing that such acquisition shall constitute a
Permitted Acquisition for purposes of this Agreement.
"Permitted Acquisition Investment" shall mean the acquisition
(not pursuant to a Permitted Acquisition) by the Borrower or any Subsidiary
of the Borrower (other than the Receivables Entity) of common equity
interests (or similar equity interests), constituting less than 80% of the
outstanding common equity interests (or similar equity interests), of any
Person not already a Subsidiary of the Borrower or such Subsidiary,
although such acquisition shall only be a Permitted Acquisition Investment
so long as (A) the consideration therefor consists solely of cash
(including from proceeds from Revolving Loans), Permitted Debt, Permitted
Acquired Debt and/or Permitted Earn-Out Debt and (B) the business of the
Person whose common equity interests (or similar equity interests) are
acquired, shall be one of the business lines permitted by Section 9.07.
Notwithstanding anything to the contrary contained in the immediately
preceding sentence, an investment shall be a Permitted Acquisition
Investment only if all requirements of Section 8.15 applicable to Permitted
Acquisition Investments are met with respect thereto.
"Permitted Amendments" shall mean amendments to the Existing
Indebtedness, the Debt Agreements, the Senior Unsecured Note Documents, the
Acquisition Documents, the Merger Documents or the Equity Financing
Agreements or any agreement relating to any of the foregoing (but not to
the Existing Seller Subordinated Note, the Existing Seller Installment
Note, the Earnout Agreement or any agreements relating thereto): (i) to
cure ambiguity, defect or inconsistency, (ii) to make changes that would
provide additional benefits or rights to the Agent or the Banks or (iii) to
make changes that would not otherwise adversely affect any Bank in its
capacity as such.
"Permitted Debt" shall mean subordinated Indebtedness of the
Borrower incurred in connection with a Permitted Transaction and in
accordance with Section 8.15 which Permitted Debt and all terms thereof
shall be in form and substance reasonably satisfactory to the Agent,
provided, that in any event, unless the Required Banks otherwise expressly
consent in writing prior to the incurrence thereof, (i) no such
Indebtedness shall be guaranteed by the Borrower or any of its
Subsidiaries, (ii) no such Indebtedness shall be secured by any asset of
the Borrower or any of its Subsidiaries, (iii) any such Indebtedness shall
be subordinated to the Obligations at least to the same extent as the
Existing Seller Subordinated Note is subordinated in accordance with the
terms thereof and (iv) each issue of Permitted Debt shall contain terms
which, in the aggregate, are at least as favorable to the Banks as those
contained in the Existing Seller Subordinated Note. The incurrence of
Permitted Debt shall be deemed to be a representation and warranty by the
Borrower that all conditions thereto have been satisfied and that same is
permitted in accordance with the terms of this Agreement, which
representation and warranty shall be deemed to be a representation and
warranty for all purposes hereunder, including, without limitation,
Sections 6 and 10.
"Permitted Earn-Out Debt" shall mean Indebtedness of the
Borrower or any of its Subsidiaries incurred in connection with a Permitted
Transaction and in accordance with Sections 8.15 and 9.04(x), which
Indebtedness is unguaranteed and not secured by any assets of the Borrower
or any of its Subsidiaries (including, without limitation, the assets so
acquired) and is only payable by the Borrower in the event certain future
performance goals are achieved with respect to the assets acquired;
provided that, such Indebtedness shall only constitute Permitted Earn-Out
Debt to the extent the terms of such Indebtedness expressly provide that
payments thereunder may only be made to the extent not prohibited by the
terms of this Agreement or any refinancing (or successive refinancings
hereof) as in effect from time to time.
"Permitted Encumbrances" shall mean, with respect to any
Mortgaged Property, such exceptions to title as are set forth in the
Mortgage Policy or title commitment delivered with respect thereto, all of
which exceptions must be acceptable on the date of delivery of such
Mortgage Policy or title commitment to the Agent in its reasonable
discretion.
"Permitted Investment" shall mean any loans, advances or capital
contributions made by the Borrower or any Subsidiary of the Borrower to any
Subsidiary of the Borrower which is not an 80%-Owned Subsidiary.
"Permitted Investment Amount" shall mean, at any time an amount
which initially shall be $5,000,000 and which shall be decreased (without
duplication) (x) on the date of the consummation of each Permitted
Acquisition Investment, by the Permitted Transaction Cost thereof and (y)
on the date of the making of each Permitted Investment, by the amount of
the respective such Investment; provided that to the extent a Permitted
Investment is reduced by cash returns received in respect thereof (but for
purposes of this proviso not to exceed the original amount of the
respective Permitted Investment), from and after the date of the receipt of
any such cash returns, the Permitted Investment Amount shall be increased
by the amount of cash so received.
"Permitted Liens" shall have the meaning provided in Section
9.01.
"Permitted Sale-Leaseback Transaction" shall mean any sale by
the Borrower or any of its Subsidiaries of which equipment or machinery
first acquired by the Borrower or such Subsidiary after the Initial
Borrowing Date which equipment or machinery, as the case may be, is then
leased back to the respective seller, provided that (i) the proceeds of the
respective sale shall be entirely cash and in an amount at least equal to
75% of the aggregate amount expended by the Borrower and its Subsidiaries
in so acquiring such equipment or machinery, (ii) such sale and leaseback
is effected within 180 days of the acquisition by the Borrower or such
Subsidiary of the Borrower of such equipment or machinery, and (iii) the
respective transaction is otherwise effected in accordance with the
applicable requirements of Section 9.02(xi).
"Permitted Transaction" shall mean and include each Permitted
Acquisition and each Permitted Acquisition Investment.
"Permitted Transaction Cost" shall mean, with respect to any
Permitted Transaction, the sum of (i) the amount of cash to be paid in
respect thereof, as certified by the Borrower pursuant to Section
8.15(a)(ii)(u) in connection with the respective Permitted Transaction,
(ii) the aggregate amount of fees and expenses estimated by the Borrower to
be payable in connection with the respective Permitted Transaction, as
certified by the Borrower pursuant to Section 8.15(a)(ii)(v), (iii) the
aggregate principal amount of all Permitted Debt and/or Permitted Acquired
Debt incurred, acquired or assumed in connection with such Permitted
Transaction and (iv) the Certified Restructuring Cost Reserve with respect
to such Permitted Transaction.
"Permitted Transaction Notice" shall have the meaning set forth
in Section 8.15(a)(i).
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government
or political subdivision or any agency, department or instrumentality
thereof.
"Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by
(or to which there is an obligation to contribute of), the Borrower or a
Subsidiary of the Borrower or an ERISA Affiliate, and each such plan for
the five-year period immediately following the latest date on which, the
Borrower or a Subsidiary of the Borrower or an ERISA Affiliate maintained,
contributed to or had an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section
5.13 and shall include after the execution and delivery thereof any pledge
agreement required to be delivered pursuant to Sections 8.11, 8.15 and/or
9.13.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledged Securities" shall have the meaning provided in the
Pledge Agreement.
"Pledgee" shall have the meaning provided in the Pledge
Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending Rate
is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. BTCo may make commercial loans or
other loans at rates of interest at, above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, in connection with any calculation
of compliance with any financial covenant or financial term (whether
pursuant to Section 8.15 or the respective financial covenant or financial
term), the calculation thereof after giving effect on a pro forma basis to
(w) if the relevant period to be tested includes any period occurring prior
to the BCM Acquisition Date, the consummation of the BCM Transaction as if
same had occurred on the first day of such period, (x) if the relevant
period to be tested includes any period occurring prior to the Initial
Borrowing Date, the consummation of the Transaction as if same had occurred
on the first day of such period, (y) in the case of any calculation of the
Consolidated Interest Coverage Ratio or the Leverage Ratio (except for
purposes of Section 8.15), any Permitted Transaction which was consummated
during the respective Test Period and (z) for purposes of all calculations
pursuant to Section 8.15 and of the Blocked Commitment, the Permitted
Transaction or Asset Sale, as the case may be, then being consummated as
well as any other Permitted Transaction and/or Asset Sale consummated after
the first day of the relevant Calculation Period and on or prior to the
date of the respective Permitted Transaction or Asset Sale, as the case may
be, then being effected, with the following rules to apply in connection
therewith:
(i) all Indebtedness (including, without limitation, all
Permitted Acquired Debt, Permitted Debt, BCM Acquired Debt, the
Senior Unsecured Notes and Indebtedness evidenced by Loans) incurred
to finance any Permitted Transaction or, to the extent the respective
Calculation Period, Asset Sale Calculation Period or Test Period
includes periods prior to the Initial Borrowing Date or the BCM
Acquisition Date, to finance the Transaction or the BCM Transaction,
as the case may be, shall be deemed to have been incurred on the
first day of the respective Calculation Period, Asset Sale
Calculation Period or Test Period and remain outstanding through the
date of the consummation of the respective Permitted Transaction (and
thereafter in the case of projections pursuant to Section
8.15(a)(xi)) or Transaction or BCM Transaction;
(ii) all Indebtedness assumed to be outstanding pursuant to
preceding clause (i) shall be deemed to have borne interest at (x)
the rate applicable thereto, in the case of fixed rate Indebtedness,
or (y) at the rates which would have been applicable thereto during
the respective period when same was deemed outstanding, in the case
of floating rate Indebtedness (although interest expense with respect
to any Indebtedness for periods while same was actually outstanding
during the respective period shall be calculated using the actual
rates applicable thereto while same was actually outstanding);
provided that for purposes of calculations pursuant to Section
8.15(a)(xi), all Indebtedness (whether actually outstanding or deemed
outstanding) bearing interest at a floating rate of interest shall be
tested on the basis of the rates applicable at the time the
determination is made pursuant to said clause (xi);
(iii) in making calculations pursuant to preceding clause (z) of
this definition, all Indebtedness permanently repaid (and in the case
of any repayment of revolving indebtedness, to the extent the
commitments with respect thereto have been permanently reduced) with
the proceeds of the respective Asset Sale shall be deemed to have
been repaid on the first day of the respective Calculation Period or
Asset Sale Calculation Period, as the case may be;
(iv) in making any determination of Consolidated EBITDA, pro
forma effect shall be given to the Transaction, the BCM Transaction
and any Permitted Transaction or, in the case of determinations
pursuant to preceding clause (z), Asset Sale for the periods
described above, taking into account (x) fees payable as described in
Section 9.06(y)(viii) as if such fees were payable with respect to
pro forma net sales from the first day of the respective period, (y)
in the case of the BCM Transaction, cost savings and expenses which
would otherwise be accounted for as an adjustment pursuant to Article
11 of Regulation S-X under the Securities Act, as if such cost
savings and expenses were realized on the first day of the respective
period, but, in the case of any such cost savings, only so long as
the BCM Restructuring Costs incurred (or the anticipated BCM
Restructuring Costs if not yet incurred) to achieve such cost savings
are reasonably consistent with the Certified BCM Restructuring Cost
Reserve to be taken in connection with the BCM Transaction as
certified pursuant to Section 9.02(xii)(c) of the Existing Credit
Agreement and (z) in the case of any Permitted Transaction, cost
savings and expenses which would otherwise be accounted for as an
adjustment pursuant to Article 11 of Regulation S-X under the
Securities Act, as if such cost savings or expenses were realized on
the first day of the respective period, but, in the case of any such
cost savings, only so long as the Restructuring Costs incurred (or
the anticipated Restructuring Costs if not yet incurred) to achieve
such cost savings are reasonably consistent with the Certified
Restructuring Cost Reserve to be taken in connection with the
Permitted Transaction as certified pursuant to Section 8.15(a)(ii).
"Projections" shall have the meaning provided in Section
5.20(b).
"Purchase Price" shall mean the sum of (i) cash in an amount not
to exceed $75,000,000, subject to the adjustment of the purchase price
provided in Sections 1.03 and 1.04 of the Acquisition Agreement plus (ii)
the Earnout plus (iii) the assumption of liabilities in an aggregate
principal amount not to exceed $10,000,000.
"Quarterly Payment Date" shall mean the 15th day of each March,
June, September and December commencing with December 15, 1996.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
the same may be amended from time to time, 42 U.S.C. 6901 et seq.
"Real Property" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Receivables" shall mean all accounts receivable (including,
without limitation, all rights to payment created by or arising from sales
of goods, leases of goods or the rendition of services rendered no matter
how evidenced whether or not earned by performance).
"Receivables Amendment Conditions" means, with respect to any
amendment, modification, supplement, refinancing or replacement of the
Receivables Facility or the respective Receivables Facility Documents, the
requirements that the following shall be true after giving effect to such
amendment, modification, supplement, refinancing or replacement:
(a) no such amendments, modifications, supplements,
refinancing or replacement shall impose any condition or
requirement on the Borrower or any of its Subsidiaries
that is more restrictive in any material respect than
those in existence on the Receivables Facility Transaction
Date in the documentation originally approved pursuant to
Section 8.17;
(b) such amendments, modifications, supplements, refinancing
and/or replacement shall not be adverse to the interest of
the Banks; and
(c) all such amendments, modifications, supplements,
refinancing or replacement shall otherwise be in form and
substance reasonably satisfactory to the Agent.
"Receivables Entity" shall mean a Wholly-Owned Subsidiary of the
Borrower which engages in no activities other than in connection with the
financing of accounts receivable of the Designated Credit Parties and which
is designated (as provided below) as the Receivables Entity (a) no portion
of the Indebtedness or any other obligations (contingent or otherwise) of
which (i) is guaranteed by Parent or any other Subsidiary of Parent
(excluding guarantees of obligations (other than the principal of, and
interest on, Indebtedness)) pursuant to Standard Securitization
Undertakings, (ii) is recourse to or obligates Parent or any other
Subsidiary of Parent in any way other than pursuant to Standard
Securitization Undertakings or (iii) subjects any property or asset of
Parent or any other Subsidiary of Parent, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant
to Standard Securitization Undertakings, (b) with which neither Parent nor
any of its Subsidiaries has any contract, agreement, arrangement or
understanding (other than pursuant to the Receivables Facility Documents
(including with respect to fees payable in the ordinary course of business
in connection with the servicing of accounts receivable and related
assets)) on terms less favorable to Parent or such Subsidiary than those
that might be obtained at the time from persons that are not Affiliates of
Parent, and (c) to which neither Parent nor any other Subsidiary of Parent
has any obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve certain levels of operating
results. Any such designation shall be evidenced to the Agent by filing
with the Agent an officer's certificate of the Borrower certifying that, to
the best of such officer's knowledge and belief after consultation with
counsel, such designation complied with the foregoing conditions.
"Receivables Facility" shall mean a facility providing for the
sale by the Borrower and/or one or more other Designated Credit Parties of
Receivables Facility Assets (thereby providing off-balance sheet financing
to the Borrower and the respective Designated Credit Parties) to the
Receivables Entity, which in turn shall sell interests in the respective
Receivables Facility Assets to the third-party investors pursuant to the
Receivables Facility Documents (with the Receivables Entity to issue
investor certificates, purchased interest certificates or other similar
documentation evidencing interests in the Receivables Facility Assets) in
return for the cash used by the Receivables Entity to purchase the
Receivables Facility Assets from the Borrower and/or the respective
Designated Credit Parties.
"Receivables Facility Assets" shall mean Receivables (whether
now existing or arising in the future) of the Borrower and its Subsidiaries
which are transferred to the Receivables Entity pursuant to the Receivables
Facility and any related Receivables Related Assets which are also so
transferred to the Receivables Entity and all proceeds thereof.
"Receivables Facility Documents" shall mean all documents and
agreements entered into in connection with the Receivables Facility, as
such documents and agreements may be amended, modified, supplemented,
refinanced or replaced from time to time so long as the Receivables
Amendment Conditions are satisfied in connection therewith.
"Receivables Facility Financing Costs" shall mean, for any
period, the total consolidated interest and fee expense of the Borrower and
its Subsidiaries which would have existed for such period pursuant to the
Receivables Facility if same were structured as a secured lending
arrangement rather than as a facility for the sale of Receivables Facility
Assets.
"Receivables Facility Threshold Amount" shall, on the
Receivables Facility Transaction Date, equal the amount applied on such
date to reduce the Total Commitment pursuant to Section 3.03(e)(x);
provided that, on each date upon which a commitment reduction is required
pursuant to Section 3.03(e)(y) as a result of the incurrence of Attributed
Receivables Facility Indebtedness in excess of the Receivables Facility
Threshold Amount as theretofore in effect, the Receivables Facility
Threshold Amount shall be increased (on the date of, after giving effect
to, the respective mandatory commitment reduction) by the amount of the
commitment reduction required on such date pursuant to Section 3.03(e)(y)
as a result of the respective incurrence of Attributed Receivables Facility
Indebtedness.
"Receivables Facility Transaction" shall mean the entering into
of the Receivables Facility and the consummation of the related
transactions contemplated by the Receivables Facility Documents.
"Receivables Facility Transaction Date" shall mean the date of
the entering into of the Receivables Facility in accordance with the
requirements of Section 8.17.
"Receivables Related Assets" shall mean, with respect to any
Person, all of the following property and interests in property of such
Person, whether now existing or existing in the future or hereafter
acquired or arising and in each case to the extent relating to the
respective Receivables of such Person: (i) all unpaid seller's or lessor's
rights (including, without limitation, recession, replevin, reclamation and
stoppage in transit, relating to any of the foregoing or arising
therefrom), (ii) all rights to any goods or merchandise represented by any
of the foregoing (including, without limitation, returned or repossessed
goods), (iii) all reserves and credit balances with respect to any such
Receivable or the respective account debtor, (iv) all letters of credit,
security or guarantees of any of the foregoing, (v) all insurance policies
or reports relating to any of the foregoing, (vi) all collection or deposit
accounts relating to any of the foregoing, (vii) all proceeds of any of the
foregoing, and (viii) all books and records relating to any of the
foregoing.
"Recovery Event" shall mean the receipt by the Borrower or any
of its Subsidiaries of any cash insurance proceeds or condemnation award
(excluding the proceeds of any business interruption insurance) payable (i)
by reason of theft, loss, physical destruction or damage or any other
similar event with respect to any property or asset of the Borrower or any
of its Subsidiaries, or (ii) by reason of any condemnation, taking, seizing
or similar event with respect to any property or asset of the Borrower or
any of its Subsidiaries or (iii) under any policy of property or casualty
(or substantially similar) insurance required to be maintained under
Section 8.03 with respect to any property or
asset of the Borrower or any of its Subsidiaries.
"Refinancing" shall mean the refinancing of the Existing Credit
Agreement on the Initial Borrowing Date pursuant to the requirements of
Section 5.12.
"Refinancing Documents" shall mean the documents entered into in
connection with the Refinancing.
"Refinancing Indebtedness" shall mean (i) Indebtedness of the
Borrower and its Subsidiaries issued or given in exchange for, or the
proceeds of which are used to, extend, refinance, renew, replace,
substitute or refund Indebtedness permitted under this Agreement or any
Indebtedness issued to so extend, refinance, renew, replace, substitute or
refund any such Indebtedness, and (ii) any additional Indebtedness issued
to pay premiums and fees in connection with clause (i).
"Register" shall have the meaning provided in Section 13.16.
"Regulation D" shall mean Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Related Business" means any business conducted by the Acquired
Business and Xxxxxx and its Subsidiaries on the Effective Date and any
business in the motion control industry (including, without limitation,
gears and gear drives, controls and sensors, drives and drive systems and
couplings) and any and all related businesses in support of, or reasonably
related or substantially similar to, any such business.
"Release" shall mean disposing, discharging, injecting,
spilling, pumping, leaking, leaching, dumping, emitting, escaping,
emptying, seeping, placing, pouring and the like, into or upon any land or
water or air, or otherwise entering into the indoor or outdoor environment
or into or out of any Real Property, including the movement of Hazardous
Materials through or in the air, soil, service water, ground water or
property.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan other than those events as to which
the 30-day notice period is waived under subsection .13, .14, .16, .18, .19
or .20 of PBGC Regulation Section 2615.
"Required Appraisal" shall have the meaning provided in Section
8.11.
"Required Banks" shall mean Non-Defaulting Banks, the sum of
whose Commitments (or after the termination thereof, outstanding Revolving
Loans and Percentage of outstanding Swingline Loans and Letter of Credit
Outstandings) represent an amount greater than 50% of the sum of all
Commitments of all Non-Defaulting Banks (or after the termination thereof,
the sum of the then total outstanding Revolving Loans of Non-Defaulting
Banks and the aggregate Percentages of all Non-Defaulting Banks of the
total outstanding Swingline Loans and Letter of Credit Outstandings at such
time).
"Restricted Payment" shall mean (i) the authorization,
declaration or payment of any Dividend with respect to the Borrower or any
of its Subsidiaries and (ii) the payment by the Borrower or any of its
Subsidiaries of any principal, interest on, or any other amount owing with
respect to, any advance or loan made by or owing by such Person to Parent
or any Subsidiary (other than the Borrower and its Subsidiaries) of Parent.
"Restructuring Costs" shall mean, as relates to any Permitted
Transaction, nonrecurring charges arising out of the restructuring,
consolidation, severance or discontinuance of the operations of any
entities or businesses acquired pursuant to the respective Permitted
Transactions either alone or together with the Borrower and its other
Subsidiaries, in each case to the extent incurred within eighteen months
following the respective Permitted Transaction.
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loans" shall have the meaning provided in Section
1.01(a).
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"Sale/Leaseback Transaction" means an arrangement (including,
without limitation, any Permitted Sale-Leaseback Transaction) relating to
property now owned or hereafter acquired whereby the Borrower or a
Subsidiary thereof, transfers such property to a Person and the Borrower or
a Subsidiary thereof leases it from such Person.
"S&P" shall mean Standard & Poor's Ratings Services, a division
of XxXxxx-Xxxx, Inc.
"Scheduled Existing Indebtedness" shall have the meaning
provided in Section 5.19.
"Xxxxx" shall mean Xxxxx Motors Company, a Delaware corporation
and a direct Wholly-Owned Subsidiary of Imperial.
"Xxxxx Acquisition Sub" shall mean The New Xxxxx Motors Company,
a Delaware corporation and a direct Wholly-Owned Subsidiary of Acquisition
Corp.
"Xxxxx Intercompany Note" shall have the meaning provided in
Section 5.23(b).
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b).
"Secured Creditors" shall have the meaning provided in the
respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section
5.14 and shall include after the execution and delivery thereof any
security agreement required to be delivered pursuant to Sections 8.11, 8.15
and/or 9.13.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Documents" shall mean the Pledge Agreement, the
Security Agreement, each Additional Security Document, if any (including,
without limitation, each Mortgage, if any, executed and delivered pursuant
to Section 8.11), and any other security documents executed and delivered
pursuant to the requirements of Sections 8.11, 8.15 and/or 9.13.
"Senior Unsecured Note Indenture" shall mean the Indenture,
dated as of November 7, 1996, entered into by and between Parent and Fleet
National Bank, as trustee thereunder, as in effect on the Initial Borrowing
Date and as the same may be amended, modified or supplemented from time to
time in accordance with the terms thereof.
"Senior Unsecured Notes" shall mean Parent's 10-3/4% Series A
Senior Notes due 2006, as in effect on the Initial Borrowing Date and as
the same may be amended, modified or supplemented from time to time
pursuant to the terms thereof.
"Senior Unsecured Note Documents" shall mean and included each
of the documents and other agreements entered into (including, without
limitation, the Senior Unsecured Note Indenture) relating to the issuance
by the Parent of the Senior Unsecured Notes, as in effect on the Initial
Borrowing Date and as the same may be entered into, modified, supplemented
or amended from time to time pursuant to the terms thereof.
"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by M&G Holdings (and not guaranteed or supported
in any way by Parent or any Subsidiary of Parent) to Management Investors,
in the form of Exhibit R, with such changes thereto as are satisfactory to
the Agent and the Required Banks.
"Shareholders' Agreements" shall have the meaning provided in
Section 5.06.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by Parent, the Borrower
or any Subsidiary of the Borrower in connection with the Receivables
Facility which are customary in an off-balance-sheet accounts receivable
transaction.
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Start Date" shall have the meaning provided in the definition
of Interest Reduction Discount.
"Stated Amount" of each Letter of Credit shall, at any time,
mean the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then
be met).
"Stockholders' Agreement" shall mean the Stockholders'
Agreement, dated as of September 22, 1995, by and among M&G Holdings,
Jordan and the other Jordan Investors (as defined therein), in the form
delivered to the Agent and the Banks on the Initial Borrowing Date;
provided that future Management Investors may become party thereto by
executing a counterpart thereof after the Initial Borrowing Date.
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such
Person and/or one or more Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such
Person and/or one or more Subsidiaries of such Person has more than a 50%
equity interest at the time. Unless the context otherwise requires, all
references herein to "Subsidiaries" shall be to Subsidiaries of the
Borrower.
"Subsidiary Guarantor" shall mean each Domestic Subsidiary of
the Borrower which is a party to the Subsidiary Guaranty or the
Non-Wholly-Owned Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in Section
5.15 and shall include, after the execution and delivery thereof, any
similar guaranty required to be delivered pursuant to Sections 8.11, 8.15
and/or 9.13.
"Swingline Bank" shall mean BTCo, in its capacity as the lender
of Swingline Loans.
"Swingline Expiry Date" shall mean the date which is five
Business Days prior to the Final Maturity Date.
"Swingline Loans" shall have the meaning provided in Section
1.01(b).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndication Date" shall mean that date upon which the Agent
determines in its sole discretion (and notifies the Borrower) that the
primary syndication (and resultant addition of institutions as Banks
pursuant to Section 13.04) has been completed.
"Tax Sharing Agreements" shall have the meaning provided in
Section 5.06.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Date" shall have the meaning provided in the definition of
Interest Reduction Discount.
"Test Period" shall mean each period of four consecutive fiscal
quarters then last ended, in each case taken as one accounting period.
Notwithstanding anything to the contrary contained above or otherwise
required by GAAP, in the case of any Test Period ending prior to the first
anniversary of the Initial Borrowing Date, such period shall be a one year
period ending on the last day of a fiscal quarter ended after the Initial
Borrowing Date, and such Test Period shall include (x) the actual results
of the Borrower and its Subsidiaries from and after the date of the
consummation of the Transaction and (y) the historical pro forma financial
results of the Borrower and its Subsidiaries for that portion of the Test
Period occurring prior to the Initial Borrowing Date, with said historical
pro forma financial results to be consistent with the pro forma financial
statements delivered pursuant to Section 7.05(a)(V) and taking into effect
the pro forma adjustments for periods prior to the Initial Borrowing Date
described in the definition of Pro Forma Basis contained herein.
"TJC" shall mean TJC Management Corporation, a Delaware
corporation.
"TJC Management Services Agreements" shall mean and include each
of (i) the Management Consulting Agreement, dated as of September 22, 1995,
by and between TJC and Parent and (ii) the Management Consulting Agreement,
dated as of September 22, 1995, by and between TJC and Xxxxxx, in each case
as in effect on the Initial Borrowing Date and as the same may be amended,
modified or supplemented from time to time in accordance with the terms
hereof and thereof.
"Total Available Commitment" shall mean at any time, the Total
Commitment less the Blocked Commitment, if any, at such time.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Unutilized Commitment" shall mean, at any time, an amount
equal to the remainder of (x) the then Total Commitment then in effect,
less (y) the sum of the aggregate principal amount of Revolving Loans and
Swingline Loans then outstanding plus the then aggregate amount of Letter
of Credit Outstandings.
"Trade L/C Percentage" shall mean the remainder of the
Applicable Margin for Eurodollar Loans less 1.00%.
"Trade Letter of Credit" shall have the meaning set forth in
Section 2.01(a).
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being two separate Tranches,
i.e., Revolving Loans and Swingline Loans.
"Transaction" shall mean, collectively, (i) the consummation of
the Acquisition, (ii) the consummation of the Merger, (iii) the Asset
Contribution, (iv) the MK Stock Contribution, (v) the issuance by Parent of
the Senior Unsecured Notes, (vi) the Refinancing, (vii) the incurrence of
the Loans and the issuance of Letters of Credit hereunder on the Initial
Borrowing Date, (viii) the payment of Transaction Fees and Expenses in
connection with the foregoing, (ix) the issuance by the Borrower of the
Parent Subordinated Intercompany Note, (x) the issuance by Xxxxx
Acquisition Sub. and Gear Acquisition Sub. of the Xxxxx Intercompany Note
and the Gear Intercompany Note, respectively, and (xi) such other
transactions contemplated by the Documents.
"Transaction Fees and Expenses" shall mean all fees and expenses
incurred in connection with and arising out of the Transaction.
"Transaction Intercompany Note" shall have the meaning provided
in Section 5.23(b).
"Type" shall mean the type of Revolving Loan determined with
regard to the interest option applicable thereto, i.e., whether a Base Rate
Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the actuarial present value of the accumulated plan benefits
under the Plan as of the close of its most recent plan year exceeds the
fair market value of the assets allocable thereto, each determined in
accordance with Statement of Financial Accounting Standards No. 35, based
upon the actuarial assumptions used by the Plan's actuary in the most
recent annual valuation of the Plan.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05.
"Unutilized Commitment" with respect to any Bank, at any time,
shall mean such Bank's Commitment at such time less the sum of (i) the
aggregate outstanding principal amount of Revolving Loans made by such Bank
and (ii) such Bank's Percentage of the total Letter of Credit Outstandings
at such time.
"Voting Stock" shall mean, with respect to any corporation, the
outstanding stock of all classes (or equivalent interest) which ordinarily,
in the absence of contingencies, entitles holders thereof to vote for the
election of directors (or Persons performing similar functions) of such
corporation, even though the right so to vote has been suspended by the
happening of such a contingency.
"Weighted Average Life to Maturity" shall mean, when applied to
any Indebtedness at any date, the number of years obtained by dividing (i)
the then outstanding principal amount of such Indebtedness into (ii) the
sum of the product(s) obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payment of principal, including payment at final maturity, in respect
thereof, by (b) the number of years (calculated to the nearest one-twelfth)
which will elapse between such date and the making of such payment.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more
Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person,
any Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any Person,
any Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary.
SECTION 12. The Agent.
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12.01 Appointment. The Banks hereby designate Bankers Trust
Company as Agent (for purposes of this Section 12, the term "Agent" shall
include BTCo in its capacity as Collateral Agent pursuant to the Security
Documents) to act as specified herein and in the other Credit Documents.
Each Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, the Agent
to take such action on its behalf under the provisions of this Agreement,
the other Credit Documents and any other instruments and agreements
referred to herein or therein and to exercise such powers and to perform
such duties hereunder and thereunder as are specifically delegated to or
required of the Agent by the terms hereof and thereof and such other powers
as are reasonably incidental thereto. The Agent may perform any of its
duties hereunder by or through its respective officers, directors, agents,
employees or affiliates.
12.02 Nature of Duties. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
Security Documents. Neither the Agent nor any of its respective officers,
directors, agents, employees or affiliates shall be liable for any action
taken or omitted by it or them hereunder or under any other Credit Document
or in connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason
of this Agreement or any other Credit Document a fiduciary relationship in
respect of any Bank or the holder of any Note; and nothing in this
Agreement or any other Credit Document, expressed or implied, is intended
to or shall be so construed as to impose upon the Agent any obligations in
respect of this Agreement or any other Credit Document except as expressly
set forth herein or therein.
12.03 Lack of Reliance on the Agent. Independently and without
reliance upon the Agent, each Bank and the holder of each Note, to the
extent it deems appropriate, has made and shall continue to make (i) its
own independent investigation of the financial condition and affairs of
Parent and its Subsidiaries in connection with the making and the
continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of
Parent and its Subsidiaries and, except as expressly provided in this
Agreement, the Agent shall not have any duty or responsibility, either
initially or on a continuing basis, to provide any Bank or the holder of
any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. Neither the Agent nor any of its affiliates nor any of
their respective officers, directors, agents or employees shall be
responsible to any Bank or the holder of any Note for, or be required or
have any duty to ascertain, inquire or verify the accuracy of, (i) any
recitals, statements, information, representations or warranties herein or
in any document, certificate or other writing delivered in connection
herewith, (ii) the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document, (iii) the financial condition of
Parent or any of its Subsidiaries, (iv) the performance or observance of
any of the terms, provisions or conditions of this Agreement or any other
Credit Document, (v) the satisfaction of any of the conditions precedent
set forth in Section 5 or 6, or (vi) the existence or possible existence of
any Default or Event of Default.
12.04 Certain Rights of the Agent. If the Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other
Credit Document, the Agent shall be entitled to refrain from such act or
taking such action unless and until the Agent shall have received
instructions from the Required Banks, and the Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, no Bank or the holder of any Note shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining
from acting hereunder or under any other Credit Document in accordance with
the instructions of the Required Banks.
12.05 Reliance. The Agent shall be entitled to rely, and shall
be fully protected (and shall have no liability to any person) in relying,
upon any note, writing, resolution, notice, statement, certificate, telex,
teletype or facsimile message, cablegram, radiogram, order or other
document or telephone message signed, sent or made by any Person that the
Agent believed to be the proper Person, and, with respect to all legal
matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by the
Agent.
12.06 Indemnification. To the extent the Agent is not
reimbursed and indemnified by the Borrower or the Guarantors, the Banks
will reimburse and indemnify the Agent, in proportion to their respective
"percentages" as used in determining the Required Banks, for and against
any and all liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, costs, expenses or disbursements of whatsoever kind or
nature which may be imposed on, asserted against or incurred by the Agent
in performing its respective duties hereunder or under any other Credit
Document, in any way relating to or arising out of this Agreement or any
other Credit Document; provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the Agent's gross negligence or willful misconduct.
12.07 The Agent in its Individual Capacity. With respect to
its obligation to make Loans or issue or participate in Letter of Credit
under this Agreement, the Agent shall have the rights and powers specified
herein for a "Bank" and may exercise the same rights and powers as though
it were not performing the duties specified herein; and the term "Banks,"
"Required Banks," "holders of Notes" or any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with any Credit
Party or any Affiliate of any Credit Party as if they were not performing
the duties specified herein, and may accept fees and other consideration
from any Credit Party for services in connection with this Agreement and
otherwise without having to account for the same to the Banks.
12.08 Holders. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the
case may be, shall have been filed with the Agent. Any request, authority
or consent of any Person who, at the time of making such request or giving
such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as
the case may be, of such Note or of any Note or Notes issued in exchange
therefor.
12.09 Resignation by the Agent. (a) The Agent may resign from
the performance of all its functions and duties hereunder and/or under the
other Credit Documents at any time by giving 15 Business Days' prior
written notice to the Banks. Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c) below or
as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks
shall appoint a successor Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower.
(c) If a successor Agent shall not have been so appointed
within such 15 Business Day period, the Agent, with the consent of the
Borrower (which consent will not be unreasonably withheld or delayed),
shall then appoint a commercial bank or trust company as successor Agent
who shall serve as Agent hereunder or thereunder until such time, if any,
as the Required Banks appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause
(b) or (c) above by the 20th Business Day after the date such notice of
resignation was given by the Agent, the Agent's resignation shall become
effective and the Banks shall thereafter perform all the duties of the
Agent hereunder and/or under any other Credit Document until such time, if
any, as the Required Banks appoint a successor Agent as provided above.
SECTION 13. Miscellaneous.
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13.01 Payment of Expenses, etc. The Borrower shall: (i)
whether or not the transactions herein contemplated are consummated, pay
all reasonable out-of-pocket costs and expenses of the Agent (including,
without limitation, the reasonable fees and disbursements of White & Case
and local counsel and all appraisal fees, trustee's fees, documentary and
recording taxes, title insurance and recording, filing and other expenses)
in connection with the preparation, execution and delivery of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein and any amendment, waiver or consent
relating hereto or thereto, of the Agent in connection with its syndication
efforts with respect to this Agreement and of the Agent and each of the
Banks in connection with the enforcement of this Agreement and the other
Credit Documents and the documents and instruments referred to herein and
therein (including, without limitation, the reasonable fees and
disbursements of counsel for the Agent and, following and during the
continuation of an Event of Default in connection with the enforcement of
this Agreement and the other Credit Documents, for each of the Banks) and
expenses incurred in connection with any reorganization or proposed
reorganization of Parent or any of its Subsidiaries; (ii) pay and hold each
of the Agent and each of the Banks harmless from and against any and all
present and future stamp, excise and other similar taxes with respect to
the foregoing matters and save each of the Agent and each of the Banks
harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable
to such Bank) to pay such taxes; and (iii) indemnify the Agent and each
Bank, and each of their respective officers, directors, employees,
representatives and agents from and hold each of them harmless against any
and all liabilities, obligations (including removal or remedial actions),
losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses and disbursements (including attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of,
(a) any investigation, litigation or other proceeding (whether or not the
Agent or any Bank is a party thereto) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of
any Letter of Credit or the proceeds of any Loans hereunder or the
consummation of any transactions contemplated herein (including, without
limitation, the Transaction) or in any other Credit Document or the
exercise of any of their rights or remedies provided herein or in the other
Credit Documents, or (b) the actual or alleged presence of Hazardous
Materials in the air, surface water or groundwater or on the surface or
subsurface of any Real Property owned, leased or at any time operated by
any Credit Party or any of its Subsidiaries, the Release, generation,
storage, transportation, handling or disposal of Hazardous Materials at any
location, whether or not owned, leased or operated by any Credit Party or
any of its Subsidiaries, the non-compliance of any Real Property with
foreign, federal, state and local laws, regulations, and ordinances
(including applicable permits thereunder) applicable to any Real Property,
or any Environmental Claim asserted against any Credit Party, any of its
Subsidiaries, its operations or any Real Property owned based or at any
time operated by any Credit Party or any of its Subsidiaries, including, in
each case, without limitation, the fees and disbursements of counsel and
other consultants incurred in connection with any such investigation,
litigation or other proceeding (but excluding any losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified). To the
extent that the undertaking to indemnify, pay or hold harmless the Agent or
any Bank set forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, the Borrower shall make the
maximum contribution to the payment and satisfaction of each of the
indemnified liabilities which is permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the
continuance of an Event of Default, each Bank is hereby authorized at any
time or from time to time, without presentment, demand, protest or other
notice of any kind to any Credit Party or any of its Subsidiaries or to any
other Person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located)
to or for the credit or the account of any Credit Party or any of its
Subsidiaries against and on account of the Obligations and liabilities of
such Credit Party or such Subsidiary to such Bank under this Agreement or
under any of the other Credit Documents, including, without limitation, all
interests in Obligations purchased by such Bank pursuant to Section
13.06(b), and all other claims of any nature or description arising out of
or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Bank shall have made any demand hereunder and
although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
13.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in
writing (including telegraphic, telex, telecopier or cable communication)
and mailed, telegraphed, telexed, telecopied, cabled or delivered: if to
the Borrower, at such Person's address specified opposite its signature
below; if to any Bank, at its address specified opposite its name on
Schedule II below; and if to the Agent, at its Notice Office; or, as to any
Credit Party or the Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each
Bank, at such other address as shall be designated by such Bank in a
written notice to the Borrower and the Agent. All such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, or
cabled or sent by overnight courier, be effective when deposited in the
mails, delivered to the telegraph company, cable company or overnight
courier, as the case may be, or sent by telex or telecopier, except that
notices and communications to the Agent shall not be effective until
received by the Agent.
13.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto; provided, however,
no Credit Party may assign or transfer any of its rights, obligations or
interest hereunder or under any other Credit Document without the prior
written consent of the Banks and, provided further, that, although any Bank
may transfer, assign or grant participations in its rights hereunder, such
Bank shall remain a "Bank" for all purposes hereunder (and may not transfer
or assign all or any portion of its Commitments hereunder except as
provided in Section 13.04(b)) and the transferee, assignee or participant,
as the case may be, shall not constitute a "Bank" hereunder and, provided
further, that no Bank shall transfer or grant any participation under which
the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the final scheduled maturity of any
Loan, Note or Letter of Credit (unless such Letter of Credit is not
extended beyond the Final Maturity Date) in which such participant is
participating, or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant's participation over the
amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the Total
Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement or (iii) release all or substantially all of the
Collateral under all of the Security Documents (except as expressly
provided in the Credit Documents) supporting the Obligations hereunder in
which such participant is participating. In the case of any such
participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights
against such Bank in respect of such participation to be those set forth in
the agreement executed by such Bank in favor of the participant relating
thereto) and all amounts payable by the Borrower hereunder shall be
determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion of
its Commitment (and related outstanding Obligations hereunder) to its
parent company and/or any affiliate of such Bank which is at least 50%
owned by such Bank or its parent company or to one or more Banks or (y)
assign all, or if less than all, a portion equal to at least $5,000,000 in
the aggregate for the assigning Bank or assigning Banks, of such
Commitments (and related outstanding Obligations hereunder) to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Bank by execution of an Assignment and Assumption Agreement,
provided that, (i) at such time Schedule I shall be deemed modified to
reflect the Commitments of such new Bank and of the existing Banks, (ii)
new Notes will be issued, at the Borrower's expense, to such new Bank and
to the assigning Bank upon the request of such new Bank or assigning Bank,
such new Notes to be in conformity with the requirements of Section 1.05
(with appropriate modifications) to the extent needed to reflect the
revised Commitments, (iii) the consent of BTCo shall be required in
connection with any such assignment pursuant to clause (y) above (which
consents shall not be unreasonably withheld), (iv) the consent of the
Borrower and each Issuing Bank shall be required in connection with any
assignment of Commitments pursuant to clause (y) above (which consent shall
not be unreasonably withheld), and (v) the Agent shall receive at the time
of each such assignment, from the assigning or assignee Bank, the payment
of a non-refundable assignment fee of $3,500; and provided further, that
such transfer or assignment shall not be effective until recorded by the
agent on the Register pursuant to Section 13.16. To the extent of any
assignment pursuant to this Section 13.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned
Commitments. At the time of each assignment pursuant to this Section
13.04(b) to a Person which is not already a Bank hereunder and which is not
a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for Federal income tax purposes, the respective assignee Bank
shall provide to the Borrower and the Agent the appropriate Internal
Revenue Service Forms (and, if applicable, a Section 4.04(b)(ii)
Certificate described in Section 4.04(b)). To the extent that an
assignment of all or any portion of a Bank's Commitments and related
outstanding Obligations pursuant to Section 1.13 or this Section 13.04(b)
would, at the time of such assignment, result in increased costs under
Section 1.10, 1.11, 2.06 or 4.04 from those being charged by the respective
assigning Bank prior to such assignment, then the Borrower shall not be
obligated to pay such increased costs (although the Borrower shall be
obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Loans and Notes hereunder to a Federal Reserve Bank
in support of borrowings made by such Bank from such Federal Reserve Bank.
13.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Agent or any Bank or any holder of any Note in exercising
any right, power or privilege hereunder or under any other Credit Document
and no course of dealing between the Borrower or any other Credit Party and
the Agent or any Bank or the holder of any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights, powers and remedies herein
or in any other Credit Document expressly provided are cumulative and not
exclusive of any rights, powers or remedies which the Agent or any Bank or
the holder of any Note would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent or any Bank or the holder of any Note to
any other or further action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in
this Agreement, the Agent agrees that promptly after its receipt of each
payment from or on behalf of any Credit Party in respect of any Obligations
of such Credit Party, it shall distribute such payment to the Banks (other
than any Bank that has consented in writing to waive its pro rata share of
any such payment) pro rata based upon their respective shares, if any, of
the Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the
Credit Documents, or otherwise), which is applicable to the payment of the
principal of, or interest on, the Loans, Unpaid Drawings, Commitment
Commission or Letter of Credit Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than
the total of such Obligation then owed and due to such Bank bears to the
total of such Obligation then owed and due to all of the Banks immediately
prior to such receipt, then such Bank receiving such excess payment shall
purchase for cash without recourse or warranty from the other Banks an
interest in the Obligations of the respective Credit Party to such Banks in
such amount as shall result in a proportional participation by all the
Banks in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Bank, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery,
but without interest.
(c) Notwithstanding anything to the contrary contained herein,
the provisions of the preceding Sections 13.06(a) and (b) shall be subject
to the express provisions of this Agreement which require, or permit,
differing payments to be made to Non-Defaulting Banks as opposed to
Defaulting Banks.
13.07 Calculations; Computations. (a) The financial
statements to be furnished to the Banks pursuant hereto shall be made and
prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except
as set forth in the notes thereto or as otherwise disclosed in writing by
the Borrower to the Banks); provided that, (w) except as otherwise
specifically provided herein, all computations of the Applicable Commitment
Commission Percentage, the Interest Reduction Discount and all computations
determining compliance with Section 9 shall utilize accounting principles
and policies in conformity with those used to prepare the pro forma
financial statements delivered to the Banks pursuant to Section 7.05(a)(V)
(with the foregoing generally accepted accounting principles, subject to
the preceding proviso, herein called "GAAP"), (x) any interest income
earned with respect to funds from time to time on deposit pursuant to the
Existing Seller Letter of Credit Collateral Agreement shall not be included
for purposes of any of the financial covenants as income of the Borrower or
its Subsidiaries, (y) any interest expense with respect to the Existing
Seller Installment Note shall not be included in Consolidated Interest
Expense, and shall not reduce Consolidated Net Income, to the extent such
interest expense is offset by earnings with respect to funds deposited
pursuant to the Existing Seller Letter of Credit Collateral Agreement and
Consolidated Interest Expense shall not include, and Consolidated Net
Income shall not be reduced by, fees owing pursuant to the Existing Seller
Letter of Credit (or the agreement pursuant to which same was issued) to
the extent such fees are paid (whether directly to the issuer of the
Existing Seller Letter of Credit or by way of reimbursement to the
Borrower) by the XX Xxxxxxx (although such payments by the XX Xxxxxxx shall
likewise not be included in Consolidated Net Income) and (z) to the extent
expressly required pursuant to the provisions of this Agreement, certain
calculations shall be made on a Pro Forma Basis.
(b) All computations of interest, Commitment Commission and
Fees hereunder shall be made on the basis of a year of 360 days for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest, Commitment Commission or
Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL,
EXCEPT AS OTHERWISE PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY
DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON
THE DATE HEREOF AT 0000 XXXXXXXX, XXX XXXX, XXX XXXX 00000 AS ITS DESIGNEE,
APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS
BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL
PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH
ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT
SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE BORROWER AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS
AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT UNDER THIS
AGREEMENT. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE
ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT UNDER THIS
AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE
(a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) THE BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall
be lodged with the Borrower and the Agent.
13.10 Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which the Borrower and each of the Banks
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Agent at its Notice
Office or, in the case of the Banks, shall have given to the Agent
telephonic (confirmed in writing), written or telex notice (actually
received) at such office that the same has been signed and mailed to it.
The Agent will give the Borrower and each Bank prompt written notice of the
occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement
nor any other Credit Document nor any terms hereof or thereof may be
changed, waived, discharged or terminated unless such change, waiver,
discharge or termination is in writing signed by the respective Credit
Parties party thereto and the Required Banks, provided that no such change,
waiver, discharge or termination shall, without the consent of each Bank
(other than a Defaulting Bank) (with Obligations being directly affected
thereby), (i) extend the final scheduled maturity of any Loan or Note or
extend the stated maturity of any Letter of Credit beyond the Final
Maturity Date, or reduce the rate (except in connection with a waiver of
any post-default increase in interest rate) or extend the time of payment
of interest or Fees thereon, or reduce the principal amount thereof (except
to the extent repaid in cash), it being understood that any amendment to,
or modification of, any financial definition shall not constitute a
reduction for any purpose of this Section 13.12, (ii) release all or
substantially all of the Collateral (except as expressly provided in the
Credit Documents) under all the Security Documents, (iii) amend, modify or
waive any provision of this Section 13.12, (iv) reduce the percentage
specified in the definition of Required Banks (it being understood that,
with the consent of the Required Banks, additional extensions of credit
pursuant to this Agreement may be included in the determination of the
Required Banks on substantially the same basis as the extensions of
Commitments are included on the Effective Date) or (v) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement; provided further, that no such change, waiver,
discharge or termination shall (v) increase the Commitments of any Bank
over the amount thereof then in effect without the consent of such Bank (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Commitment shall not constitute an increase of the Commitment of any
Bank, and that an increase in the available portion of any Commitment of
any Bank shall not constitute an increase in the Commitment of such Bank),
(w) without the consent of the Swingline Bank, amend, modify or waive any
provision relating to the rights or obligations of the Swingline Bank or
with respect to Swingline Loans (including, without limitation, the
obligations of the other Banks to fund Mandatory Borrowings), (x) without
the consent of each Issuing Bank, amend, modify or waive any provision of
Section 2 or alter its rights or obligations with respect to Letters of
Credit issued by it, (y) without the consent of the Agent, amend, modify or
waive any provision of Section 12 as same applies to the Agent or any other
provision as same relates to the rights or obligations of the Agent and (z)
without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clauses (i) through (vi), inclusive, of the first proviso
to Section 13.12(a), the consent of the Required Banks is obtained but the
consent of one or more of such other Banks whose consent is required is not
obtained, then the Borrower shall have the right, so long as all
non-consenting Banks whose individual consent is required are treated as
described in either clauses (A) or (B) below, to either (A) replace each
such non-consenting Bank or Banks with one or more Replacement Banks
pursuant to Section 1.13 so long as at the time of such replacement, each
such Replacement Bank consents to the proposed change, waiver, discharge
or termination or (B) terminate such non-consenting Bank's Commitment and
repay all outstanding Revolving Loans of, and other unpaid Obligations
owing to, such Bank in accordance with Sections 3.02(b) and/or 4.01(b),
provided that, unless the Commitments are terminated, and Revolving Loans
repaid, pursuant to preceding clause (B) are immediately replaced in full
at such time through the addition of new Banks or the increase of the
Commitments and/or outstanding Revolving Loans of existing Banks (who in
each case must specifically consent thereto), then in the case of any
action pursuant to preceding clause (B), the Required Banks (determined
before giving effect to the proposed action) shall specifically consent
thereto, provided further, that in any event the Borrower shall not have
the right to replace a Bank, terminate its Commitment or repay its
Revolving Loans solely as a result of the exercise of such Bank's rights
(and the withholding of any required consent by such Bank) pursuant to the
second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 13.01, 13.06 and
13.16 shall, survive the execution, delivery and termination of this
Agreement, the Notes and any Letters of Credit, and the making and
repayment of the Loans.
13.14 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Bank. Notwithstanding anything to the contrary contained herein, to
the extent that a transfer of Loans pursuant to this Section 13.14 would,
at the time of such transfer, result in increased costs under Section 1.10,
1.11, 2.06 or 4.04 from those being charged by the respective Bank prior to
such transfer, then the Borrower shall not be obligated to pay such
increased costs (although the Borrower shall be obligated to pay any other
increased costs of the type described above resulting from changes after
the date of the respective transfer).
13.15 Confidentiality. (a) Subject to the provisions of
clause (b) of this Section 13.15, each Bank agrees that it will use its
best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, auditors, advisors or counsel or to another
Bank if the Bank or such Bank's holding or parent company in its sole
discretion determines that any such party should have access to such
information, provided such Persons shall be subject to the provisions of
this Section 13.15 to the same extent as such Bank) any information with
respect to any Credit Party or any of their respective Subsidiaries which
is now or in the future furnished pursuant to this Agreement or any other
Credit Document and which is designated by the Borrower to the Banks in
writing as confidential, provided that any Bank may disclose any such
information (a) as has become generally available to the public, (b) as may
be required or appropriate in any report, statement or testimony submitted
to any municipal, state or Federal regulatory body having or claiming to
have jurisdiction over such Bank or to the Federal Reserve Board or the
Federal Deposit Insurance Corporation or similar organizations (whether in
the United States or elsewhere) or their successors, (c) as may be required
or appropriate in respect to any summons or subpoena or in connection with
any litigation, (d) in order to comply with any law, order, regulation or
ruling applicable to such Bank, (e) to the Agent or the Collateral Agent
and (f) to any prospective or actual transferee or participant in
connection with any contemplated transfer or participation of any of the
Notes or Commitments or any interest therein by such Bank, provided, that
such prospective transferee agrees to provisions substantially the same as
those contained in this Section.
(b) Each Credit Party hereby acknowledges and agrees that each
Bank may share with any of its affiliates any information related to any
Credit Party or any of its respective Subsidiaries (including, without
limitation, any nonpublic customer information regarding the
creditworthiness of any Credit Party or any of their respective
Subsidiaries), provided such Persons shall be subject to the provisions of
this Section 13.15 to the same extent as such Bank.
13.16 Register. The Borrower hereby designates the Agent to
serve as the Borrower's agent, solely for purposes of this Section 13.16,
to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Banks, the Loans made by each
of the Banks and each repayment in respect of the principal amount of the
Loans of each Bank. Failure to make any such recordation, or any error in
such recordation shall not affect the Borrower's obligations in respect of
such Loans. With respect to any Bank, the transfer of the Commitments of
such Bank and the rights to the principal of, and interest on, any Loan
made pursuant to such Commitments shall not be effective until such
transfer is recorded on the Register maintained by the Agent with respect
to ownership of such Commitments and Loans and prior to such recordation
all amounts owing to the transferor with respect to such Commitments and
Loans shall remain owing to the transferor. The registration of assignment
or transfer of all or part of the Commitments and the Loans shall be
recorded by the Agent on the Register only upon the acceptance by the Agent
of a properly executed and delivered Assignment and Assumption Agreement
pursuant to Section 13.04(b). Coincident with the delivery of such an
Assignment and Assumption Agreement to the Agent for acceptance and
registration of assignment or transfer of all or part of a Loan, or as soon
thereafter as practicable, the assigning or transferor Bank shall surrender
the Note evidencing such Loan, and thereupon one or more new Notes in the
same aggregate principal amount shall be issued to the assigning or
transferor Bank and/or the new Bank. The Borrower agrees to indemnify the
Agent from and against any and all losses, claims, damages and liabilities
of whatsoever nature which may be imposed on, asserted against or incurred
by the Agent in performing its duties under this Section 13.16.
* * *
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date
first above written.
0000 Xxxx Xxxx Xxxx, Xxxxx 000 MOTORS AND GEARS
Xxxxxxxxx, Xxxxxxxx 00000 INDUSTRIES, INC.
Attention: Xxxxxx X. Xxxxxxxxxxx
By /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------
Title: Vice President
with copies to:
Xxxxxxxx X. Xxxxxxx
The Jordan Company
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Xxxxx X. Xxxxxxx, Esq.
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
BANKERS TRUST COMPANY,
Individually and as Agent
By /s/ Xxxxxxxx Xxxxx
--------------------------
Title: Vice President
