EXECUTION COPY
$145,000,000
CREDIT AGREEMENT
AMONG
RELIANT BUILDING PRODUCTS, INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY,
AS DOCUMENTATION AGENT
AND
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT
DATED AS OF JANUARY 28, 1998
CHASE SECURITIES INC.,
AS ARRANGER
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS 1
1.1 Defined Terms 1
1.2 Other Definitional Provisions 31
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 31
2.1 Term Loan Commitments 31
2.2 Procedure for Term Loan Borrowing 32
2.3 Repayment of Term Loans 32
2.4 Revolving Credit Commitments 34
2.5 Procedure for Revolving Credit Borrowing 35
2.6 Swing Line Commitment 35
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans 36
2.8 Repayment of Loans; Evidence of Debt 37
2.9 Commitment Fees, etc. 38
2.10 Termination or Reduction of Revolving Credit Commitments 38
2.11 Optional Prepayments 38
2.12 Mandatory Prepayments and Commitment Reductions 39
2.13 Conversion and Continuation Options 41
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches 41
2.15 Interest Rates and Payment Dates 41
2.16 Computation of Interest and Fees 42
2.17 Inability to Determine Interest Rate 42
2.18 Pro Rata Treatment and Payments 43
2.19 Requirements of Law 45
2.20 Taxes 46
2.21 Indemnity 48
2.22 Illegality 48
2.23 Change of Lending Office 49
2.24 Replacement of Lenders under Certain Circumstances 49
2.25 Security Documents 49
2.26 Filing and Recording 50
SECTION 3. LETTERS OF CREDIT 50
3.1 L/C Commitment 50
3.2 Procedure for Issuance of Letter of Credit 50
3.3 Commissions, Fees and Other Charges 51
3.4 L/C Participations 51
3.5 Reimbursement Obligation of the Borrower 52
3.6 Obligations Absolute 52
3.7 Letter of Credit Payments 53
3.8 Applications 53
SECTION 4. REPRESENTATIONS AND WARRANTIES 53
4.1 Financial Condition 53
4.2 No Change 55
4.3 Corporate Existence; Compliance with Law 55
4.4 Corporate Power; Authorization; Enforceable Obligations 55
4.5 No Legal Bar; No Burdensome Restrictions 56
4.6 No Material Litigation 56
4.7 No Default 56
4.8 Ownership of Property; Liens 56
4.9 Intellectual Property 56
4.10 Taxes 56
4.11 Federal Regulations 57
4.12 Labor Matters 57
4.13 ERISA 57
4.14 Investment Company Act; Other Regulations 57
4.15 Subsidiaries 58
4.16 Use of Proceeds 58
4.17 Environmental Matters 58
4.18 Accuracy of Information, etc 59
4.19 Security Documents 60
4.20 Solvency 60
4.21 Senior Indebtedness 60
4.22 Regulation H 60
4.23 Status of Receivables and Other Collateral 60
SECTION 5. CONDITIONS PRECEDENT 62
5.1 Conditions to Initial Extension of Credit 62
5.2 Conditions to Each Extension of Credit 66
SECTION 6. AFFIRMATIVE COVENANTS 66
6.1 Financial Statements 67
6.2 Certificates; Other Information 67
6.3 Payment of Obligations 68
6.4 Conduct of Business and Maintenance of Existence, etc. 69
6.5 Maintenance of Property; Insurance 69
6.6 Inspection of Property; Books and Records; Discussions 69
6.7 Notices 70
6.8 Environmental Laws 71
6.9 Interest Rate Protection 72
6.10 Additional Collateral, etc 72
6.11 Additional Receivables Documentation 74
6.12 Surveys 74
SECTION 7. NEGATIVE COVENANTS 74
7.1 Financial Covenants 74
7.2 Limitation on Indebtedness 75
7.3 Limitation on Liens 76
7.4 Limitation on Fundamental Changes 78
7.5 Limitation on Sale of Assets 79
7.6 Limitation on Dividends 80
7.7 Limitation on Capital Expenditures 80
7.8 Limitation on Investments, Loans and Advances 81
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. 82
7.10 Limitation on Transactions with Affiliates 82
7.11 Limitation on Sales and Leasebacks 83
7.12 Limitation on Changes in Fiscal Periods 83
7.13 Limitation on Negative Pledge Clauses 83
7.14 Limitation on Restrictions on Subsidiary Distributions 83
7.15 Limitation on Lines of Business 83
7.16 Limitation on Amendments to Acquisition Documents 83
7.17 Limitation on Activities of Holdings 84
7.18 Credit Extensions 84
7.19 Change in Accounting Method 84
7.20 Limitation on Guarantee Obligations 84
SECTION 8. EVENTS OF DEFAULT 84
SECTION 9. THE ADMINISTRATIVE AGENT 88
9.1 Appointment 88
9.2 Delegation of Duties 88
9.3 Exculpatory Provisions 88
9.4 Reliance by Administrative Agent 88
9.5 Notice of Default 89
9.6 Non-Reliance on Administrative Agent, Arranger and Other Lenders 89
9.7 Indemnification 90
9.8 Administrative Agent in Its Individual Capacity 90
9.9 Successor Administrative Agent 90
9.10 Authorization to Release Liens 91
9.11 The Arranger and the Documentation Agent 91
SECTION 10. MISCELLANEOUS 91
10.1 Amendments and Waivers 91
10.2 Notices 92
10.3 No Waiver; Cumulative Remedies 93
10.4 Survival of Representations and Warranties 93
10.5 Payment of Expenses 93
10.6 Successors and Assigns; Participations and Assignments 94
10.7 Adjustments; Set-off 97
10.8 Counterparts 97
10.9 Severability 97
10.10 Integration 98
10.11 GOVERNING LAW 98
10.12 Submission To Jurisdiction; Waivers 98
10.13 Acknowledgements 98
10.14 WAIVERS OF JURY TRIAL 99
10.15 Confidentiality 99
10.16 Joint and Several Obligations 99
10.17 Enforceability; Usury 99
CREDIT AGREEMENT, dated as of January 28, 1998, among RELIANT
BUILDING PRODUCTS, INC., a Delaware corporation (the "Borrower"), the several
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banks and other financial institutions or entities from time to time parties
to this Agreement (the "Lenders"), CHASE SECURITIES INC., as advisor and
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arranger (in such capacity, the "Arranger"), CANADIAN IMPERIAL BANK OF
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COMMERCE, NEW YORK AGENCY, as documentation agent (in such capacity, the
"Documentation Agent"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as
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administrative agent (in such capacity, the "Administrative Agent").
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W I T N E S S E T H:
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WHEREAS, the Borrower intends to acquire (the "Acquisition") all of
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the outstanding Capital Stock of CFA Holding Company (the "Target"), a
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Delaware corporation, and to refinance the outstanding indebtedness of the
Borrower and the Target, with the purchase price for the Acquisition and the
outstanding principal amount of the refinanced indebtedness aggregating no
more than $125,900,000 (including fees and expenses);
WHEREAS, following the Acquisition the Target may be merged into the
Borrower;
WHEREAS, the Lenders are willing to make such credit facilities
available upon and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms As used in this Agreement, the terms listed in
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this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"Acquisition": as defined in the recitals hereto.
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"Acquisition Agreement": the Stock Purchase Agreement, dated as of
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December 17, 1997, by and among Reliant Building Products, Inc. and the
stockholders, warrant holders and option holders of CFA Holding Company.
"Adjustment Date": as defined in the Pricing Grid.
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"Affiliate": as to any Person, any other Person which, directly or
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indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.
"Aggregate Exposure": with respect to any Lender, an amount equal
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to (a) until the Closing Date, the aggregate amount of such Lender's
Commitments and (b) thereafter, the sum of (i) the aggregate unpaid principal
amount of such Lender's Term Loans and (ii) the amount of such Lender's
Revolving Credit Commitment or, if the Revolving Credit Commitments have been
terminated, the amount of such Lender's Revolving Extensions of Credit.
"Aggregate Exposure Percentage": with respect to any Lender, the
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ratio (expressed as a percentage) of such Lender's Aggregate Exposure to the
Aggregate Exposure of all Lenders.
"Agreement": this Credit Agreement, as amended, supplemented or
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otherwise modified from time to time.
"Applicable Margin": for each Type of Loan, the rate per annum set
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forth under the relevant column heading below:
Base Rate Eurodollar
Loans Loans
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Revolving Credit Loans 1.25% 2.25%
Swing Line Loans . . . 1.25%
Tranche A Term Loans . 1.25% 2.25%
Tranche B Term Loans . 1.50% 2.50%;
provided, that on and after the first Adjustment Date occurring after
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the completion of the fiscal quarter of the Borrower ended October 2, 1998,
the Applicable Margin will be determined pursuant to the Pricing Grid.
"Application": an application, in such form as the Issuing Lender
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may specify from time to time, requesting the Issuing Lender to open a Letter
of Credit.
"Approved Initial Public Offering": an initial public offering of
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voting Capital Stock of the Borrower or Holdings, so long as no Default or
Event of Default shall have occurred and be continuing or would result
therefrom.
"Arranger": as defined in the preamble hereto.
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"Asset Sale": any Disposition of Property (including any Permitted
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Affiliate Sale of Receivables) or series of related Dispositions of Property
(excluding any such Disposition permitted by clause (a), (b), (c) or (d) of
Section 7.5) which yields gross proceeds to the Borrower or any of its
Subsidiaries (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of
$1,000,000.
"Assignee": as defined in Section 10.6(c).
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"Assignor": as defined in Section 10.6(c).
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"ATEMCO": the joint venture created by the ATEMCO Joint Venture
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Agreement.
"ATEMCO Joint Venture Agreement": the Joint Venture Agreement of
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ATEMCO dated March 3, 1982, by and among the Borrower, Tower Extrusions, Inc.,
and MEB Enterprises, Inc., as amended and in effect from time to time.
"Available Revolving Credit Commitment": as to any Revolving Credit
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Lender at any time, an amount equal to the excess, if any, of (a) such
Lender's Revolving Credit Commitment over (b) such Lender's Revolving
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Extensions of Credit; provided, that in calculating any Lender's Revolving
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Extensions of Credit for the purpose of determining such Lender's Available
Revolving Credit Commitment pursuant to Section 2.9(a), the aggregate
principal amount of Swing Line Loans then outstanding shall be deemed to be
zero.
"Base Rate": for any day, a rate per annum (rounded upwards, if
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necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
For purposes hereof: "Prime Rate" shall mean the rate of interest per annum
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publicly announced from time to time by the Reference Lender as its prime or
base rate in effect at its principal office in New York City (the Prime Rate
not being intended to be the lowest rate of interest charged by the Reference
Lender in connection with extensions of credit to debtors); "Base CD Rate"
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shall mean the sum of (a) the product of (i) the Three-Month Secondary CD Rate
and (ii) a fraction, the numerator of which is one and the denominator of
which is one minus the C/D Reserve Percentage and (b) the C/D Assessment Rate;
and "Three-Month Secondary CD Rate" shall mean, for any day, the secondary
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market rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such rate shall
not be so reported on such day or such next preceding Business Day, the
average of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the Reference Lender from
three New York City negotiable certificate of deposit dealers of recognized
standing selected by it. Any change in the Base Rate due to a change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective
Rate shall be effective as of the opening of business on the effective day of
such change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans the rate of interest applicable to which
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is based upon the Base Rate.
"Board": the Board of Governors of the Federal Reserve System of
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the United States (or any successor).
"Borrowing Base": at any date, the amount of the then most recent
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computation of the Borrowing Base, determined by calculating the amount equal
to:
(a) 85% of the Net Amount of Eligible Receivables at such date;
plus
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(b) 50% of the amount of Eligible Inventory at said date,
calculated at the lower of cost (determined on a FIFO basis) or market less
the Slow Moving Reserve then in effect; provided that in no event shall the
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portion of the Borrowing Base attributable to Eligible Inventory exceed 50% of
the Borrowing Base.
The Borrowing Base will be computed hereunder on a monthly basis (based
on all information reasonably available to the Administrative Agent, including
without limitation, the periodic reports and listings delivered to the
Administrative Agent in accordance with Section 6.2(c)), and a monthly
Borrowing Base Certificate from a Responsible Officer of the Borrower
presenting the Borrower's computation of the Borrowing Base will be
periodically delivered to the Administrative Agent in accordance with Section
6.2(d).
"Borrowing Base Certificate": a certificate duly executed by a
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Responsible Officer substantially in the form of Exhibit B-2.
"Borrowing Date": any Business Day specified by the Borrower as a
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date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Business Day": (i) for all purposes other than as covered by
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clause (ii) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close
and (ii) with respect to all notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, any day which is
a Business Day described in clause (i) and which is also a day for trading by
and between banks in Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person,
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the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment (including replacements, capitalized repairs
and improvements during such period) which should be capitalized under GAAP on
a consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of
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such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
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other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Collateral Account": as defined in Section 2.12(e).
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"Cash Equivalents": (a) marketable direct obli-gations issued by,
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or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the date
of acquisition issued by any Lender or by any commercial bank organized under
the laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor's Ratings Services ("S&P") or P-2
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by Xxxxx'x Investors Service, Inc. ("Moody's"), or carrying an equivalent
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rating by a nationally recognized rating agency, if both of the two named
rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition; (d)
repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than
30 days with respect to securities issued or fully guaranteed or insured by
the United States government; (e) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision
or taxing authority of any such state, commonwealth or territory or by any
foreign government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the case may
be) are rated at least A by S&P or A by Moody's; (f) securities with
maturities of six months or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; or (g) shares of
money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition.
"C/D Assessment Rate": for any day as applied to any Base Rate
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Loan, the annual assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund maintained by the Federal Deposit Insurance
Corporation (the "FDIC") classified as well-capitalized and within supervisory
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subgroup "B" (or a comparable successor assessment risk classification) within
the meaning of 12 C.F.R. Section 327.4 (or any successor provision) to the
FDIC (or any successor) for the FDIC's (or such successor's) insuring time
deposits at offices of such institution in the United States.
"C/D Reserve Percentage": for any day as applied to any Base Rate
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Loan, that percentage (expressed as a decimal) which is in effect on such day,
as prescribed by the Board, for determining the maximum reserve requirement
for a Depositary Institution (as defined in Regulation D of the Board as in
effect from time to time) in respect of new non-personal time deposits in
Dollars having a maturity of 30 days or more.
"Change of Control": the occurrence of any of the following at any
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time after the Closing Date: (a) the Control Group shall fail to
"Beneficially Own" (as defined below), directly or indirectly, in the
aggregate more than fifty percent (50%) of the aggregate voting power of all
classes of partnership interests in (1) each of the Reliant Partners Entities
or (2) Reliant Coinvestment Partners, L.P.; (b) prior to the consummation of
an Approved Initial Public Offering for the Borrower, the Control Group shall
fail to either (i) Beneficially Own, directly or indirectly, in the aggregate
more than fifty percent (50%) of the aggregate voting power of all classes of
Capital Stock of the Borrower, or (ii) cause enough of the nominees of the
Control Group in the aggregate to be elected to the Board of Directors of the
Borrower so as to constitute a majority of such Board of Directors; (c) prior
to the consummation of an Approved Initial Public Offering for Holdings, the
Control Group shall fail to either (i) Beneficially Own, directly or
indirectly, in the aggregate more than fifty percent (50%) of the aggregate
voting power of all classes of Capital Stock of Holdings, or (ii) cause enough
of the nominees of the Control Group in the aggregate to be elected to the
Board of Directors of Holdings so as to constitute a majority of such Board of
Directors; (d) following the consummation of an Approved Initial Public
Offering for the Borrower, either (i) the Control Group shall either (A) fail
to Beneficially Own, directly or indirectly, in the aggregate more than
thirty-five percent (35%) of the aggregate voting power of all classes of
Capital Stock of the Borrower or (B) allow any "person" (as such term is used
in Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934, as
amended, including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13(d)-5 of the Securities
and Exchange Act of 1934), other than members of the Control Group, to
Beneficially Own, directly or indirectly, in the aggregate more than the
aggregate voting power of all classes of Capital Stock of the Borrower then
held by the Control Group, or (ii) the Control Group and the then current
management of the Borrower shall fail to cause enough of their respective
nominees in the aggregate to be elected to the Board of Directors of the
Borrower so as to constitute a majority of the Board of Directors of the
Borrower; (e) following the consummation of an Approved Initial Public
Offering for Holdings, either (i) the Control Group shall either (A) fail to
Beneficially Own, directly or indirectly, in the aggregate more than
thirty-five percent (35%) of the aggregate voting power of all classes of
Capital Stock of Holdings, or (B) allow any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934, as
amended, including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13(d)-5 of the Securities
and Exchange Act of 1934), other than members of the Control Group, to
Beneficially Own, directly or indirectly, in the aggregate more than the
aggregate voting power of all classes of Capital Stock of Holdings then held
by the Control Group, or (ii) the Control Group and the then current
management of Holdings shall fail to cause enough of their respective nominees
in the aggregate to be elected to the Board of Directors of Holdings so as to
constitute a majority of the Board of Directors of Holdings; (f) Holdings,
Reliant Coinvestment Partners, L.P. or either of the Reliant Partners Entities
consolidates with, or merges with or into, another Person (other than an
Affiliate thereof), or any Person (other than an Affiliate thereof)
consolidates with, or merges with or into, Holdings, Reliant Coinvestment
Partners, L.P. or either of the Reliant Partners Entities; (g) Holdings,
Reliant Coinvestment Partners, L.P. or either of the Reliant Partners Entities
sells, assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of the assets of Holdings, Reliant Coinvestment Partners,
L.P. or either of the Reliant Partners Entities to any Person (other than an
Affiliate thereof) or (h) a Specified Change of Control. As used herein,
"Beneficially Own" shall mean "beneficially own" as defined in Rules 13d-3 and
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13d-5 of the Securities and Exchange Act of 1934, as amended, or any successor
provision thereto.
"Chase Bank of Texas": Chase Bank of Texas, National Association.
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"Closing Date": the date on which the conditions precedent set
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forth in Section 5.1 shall have been satisfied, which date is January 28,
1998.
"Code": the Internal Revenue Code of 1986, as amended from time to
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time.
"Collateral": all Property of the Loan Parties, now owned or
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hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commitment": as to any Lender, the sum of the Tranche A Term Loan
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Commitment, the Tranche B Term Loan Commitment and the Revolving Credit
Commitment of such Lender.
"Commitment Fee Rate": 1/2 of 1% per annum; provided, that on and
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after the first Adjustment Date occurring after the completion of the fiscal
quarter of the Borrower ended September 30, 1998, the Commitment Fee Rate will
be determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not
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incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of the
Code.
"Compliance Certificate": a certificate duly executed by a
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Responsible Officer substantially in the form of Exhibit B-1.
"Confidential Information Memorandum": the Confidential Information
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Memorandum dated January 1998 and furnished to the Lenders.
"Consolidated Current Assets": at any date, all amounts (other than
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cash and Cash Equivalents) which would, in conformity with GAAP, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts which
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would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
the Borrower and its Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of the Borrower and its Subsidiaries and (b)
without duplication of clause (a) above, all Indebtedness consisting of
Revolving Credit Loans or Swing Line Loans to the extent otherwise included
therein.
"Consolidated EBITDA": for any period, Consolidated Net Income for
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such period plus, without duplication and to the extent reflected as a charge
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in the statement of such Consolidated Net Income for such period, the sum of
(a) income tax expense, (b) interest expense, amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) to the extent deducted in
determining such Consolidated Net Income, expenses relating to payments
pursuant to the Xxxxxx Group Consulting Agreements, not to exceed $3,500,000,
in any fiscal year of the Borrower, (f) to the extent deducted in determining
such Consolidated Net Income, cash expenses relating to the planned closure
and consolidation referred to in the Confidential Information Memorandum of
certain facilities of the Borrower, not to exceed $3,500,000 in the aggregate,
(g) any extraordinary, unusual or non-recurring expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of
such Consolidated Net Income for such period, losses on sales of assets
outside of the ordinary course of business) and (h) any other non-cash
charges, and minus, to the extent included in the statement of such
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Consolidated Net Income for such period, the sum of (a) interest income, (b)
any extraordinary, unusual or non-recurring income or gains (including,
whether or not otherwise includable as a separate item in the statement of
such Consolidated Net Income for such period, gains on the sales of assets
outside of the ordinary course of business) and (c) any other non-cash income,
all as determined on a consolidated basis.
"Consolidated Interest Coverage Ratio": for any period, the ratio
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of (a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense": for any period, total interest
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expense (including that attributable to Capital Lease Obligations) of the
Borrower and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries (including, without
limitation, all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net costs
under Interest Rate Protection Agreements to the extent such net costs are
allocable to such period in accordance with GAAP) but excluding amortization
or writeoff of debt discount and debt issuance costs and commissions,
discounts and other fees and charges associated with Indebtedness (including
the Loans).
"Consolidated Leverage Ratio": as at any date, the ratio of (a)
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Consolidated Net Total Debt on such date to (b) Consolidated EBITDA for the
most recent period of four fiscal quarters (or if less, the number of full
fiscal quarters subsequent to the Closing Date); provided that for purposes of
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calculating Consolidated EBITDA of the Borrower and its Subsidiaries for any
period, the Consolidated EBITDA of any Person acquired by the Borrower or its
Subsidiaries during such period shall be included on a pro forma basis for
--- -----
such period (assuming the consummation of each such acquisition and the
incurrence or assumption of any Indebtedness in connection therewith occurred
on the first day of such period) if the consolidated balance sheet of such
acquired Person and its consolidated Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated
statements of income and stockholders' equity and of cash flows for the period
in respect of which Consolidated EBITDA is to be calculated (i) have been
previously provided to the Administrative Agent and the Lenders and (ii)
either (A) have been reported on without a qualification arising out of the
scope of the audit by independent certified public accountants of nationally
recognized standing or (B) have been found acceptable by the Administrative
Agent.
"Consolidated Net Income": for any period, the consolidated net
-------------------------
income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
--------
excluded (a) the income (or deficit) of any Person accrued prior to the date
it becomes a Subsidiary of the Borrower or is merged into or consolidated with
the Borrower or any of its Subsidiaries, (b) the income (or deficit) of any
Person (other than a Subsidiary of the Borrower) in which the Borrower or any
of its Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by the Borrower or such Subsidiary in the
form of dividends or similar distributions, (c) the undistributed earnings of
any Subsidiary of the Borrower to the extent that the declaration or payment
of dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any
Loan Document) or Requirement of Law applicable to such Subsidiary and (d) any
extraordinary or non recurring items, as determined in accordance with GAAP.
"Consolidated Net Total Debt": at any date, the aggregate principal
---------------------------
amount of all Indebtedness of the Borrower and its Subsidiaries at such date,
net of the average cash and Cash Equivalents maintained by the Borrower and
its Subsidiaries during the prior three month period, all as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Worth": at any date, all amounts which would, in
-----------------------
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' equity at such date.
"Consolidated Working Capital": at any date, the excess of
------------------------------
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
"Contractual Obligation": as to any Person, any provision of any
-----------------------
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Control Group": Keystone, Inc., a Texas corporation, Oak Hill
--------------
Partners, Inc., a New York corporation, FW Strategic Partners, L.P., a
Delaware limited partnership, Arbor Investors, L.L.C., a Delaware limited
liability company, Group 31, Inc., a Texas corporation, and FW Group Gen Par,
Inc., a Texas corporation, together with the respective Affiliates of such
entities on the Closing Date and the respective Permitted Transferees of any
of such entities or such Affiliates anytime thereafter.
"Default": any of the events specified in Section 8, whether or not
-------
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Dilution Factors": with respect to the Borrower and its Domestic
-----------------
Subsidiaries, at any date, the aggregate dollar amount equal to the sum of (a)
any credit memos, adjustments, returns, and allowances (such as co-op
advertising, volume rebate incentives), (b) cash discounts, (c) bad debt
write-offs and (d) other non-cash credits.
"Dilution Ratio": at any date, the amount (expressed as a
---------------
percentage) equal to the result of (a) the aggregate amount of the Dilution
Factors for the twelve most recently ended fiscal months divided by (b) total
----------
gross credit sales of the Borrower and its Domestic Subsidiaries, net of
intercompany sales, for such twelve fiscal months.
"Dilution Reserve": at any date, the amount equal to the result of
-----------------
(a) the Dilution Ratio multiplied by (b) the amount of Eligible Receivables on
-------------
such date.
"Disposition": with respect to any Property, any sale, lease, sale
-----------
and leaseback, assignment, conveyance, transfer or other disposition thereof;
and the terms "Dispose" and "Disposed of" shall have correlative meanings.
------- -----------
"Documentation Agent": as defined in the preamble hereto.
--------------------
"Dollars" and "$": dollars in lawful currency of the United States
------- -
of America.
"Domestic Subsidiary": any Subsidiary of the Borrower organized
--------------------
under the laws of any jurisdiction within the United States of America.
"Dormant Subsidiaries": each of the Subsidiaries of the Borrower
---------------------
which is listed as a Dormant Subsidiary on Schedule 4.15 attached hereto.
"ECF Percentage": 75%; provided, that, with respect to each fiscal
--------------- --------
year of the Borrower ending on or after April 2, 1999, the ECF Percentage
shall be reduced to 50% if the Consolidated Leverage Ratio as of the last day
of such fiscal year less than 4.0 to 1.0.
"Eligible Inventory": inventory of the Borrower or any of its
-------------------
Domestic Subsidiaries (but only to the extent that such inventory is
Collateral hereunder and is subject to a first priority perfected Lien in
favor of the Administrative Agent for the ratable benefit of the Lenders),
which are and at all times shall continue to be acceptable to the
Administrative Agent in all respects. Standards of eligibility for inventory
may be fixed and revised from time to time solely by the Administrative Agent
in the Administrative Agent's exclusive judgment with thirty days prior notice
by the Administrative Agent to the Borrower. In general, without limiting the
foregoing, inventory shall in no event be considered as Eligible Inventory
without complying with the following requirements: (a) such inventory shall
be valued in accordance with GAAP and excludes LIFO reserves and general
ledger reserves for shrink or obsolescence and shall be owned by the Borrower
or any of its Domestic Subsidiaries; (b) such inventory is in good condition,
meets all standards imposed by any Governmental Authority having regulatory
authority over it, is not obsolete, is not repair or replacement parts for
machinery and equipment, does not include burden or manufacturing overhead
components, does not include any profits or transfer price additions charged
or accrued in connection with transfers of such inventory between the Borrower
and its Domestic Subsidiaries or among the Domestic Subsidiaries of the
Borrower, is not returned or damaged, is not scrap or remnants inventory, is
not packaging or shipping supplies or materials and is currently usable in the
manufacturing process or saleable in the normal course of business of the
Borrower or any of its Domestic Subsidiaries; (c) such inventory is not in the
possession of or control of any warehouseman, bailee, or any agent or
processor for or customer of the Borrower or any of its Subsidiaries, unless
such warehouseman, bailee, agent, processor, or customer has subordinated any
Lien it may claim therein pursuant to a written subordination agreement
reasonably acceptable to Administrative Agent; (d) except for inventory being
shipped to a customer of the Borrower or any of its Domestic Subsidiaries (so
long as such inventory is in control of, and is being shipped by, the Borrower
or any of its Domestic Subsidiaries), such inventory must not be in transit
and must be housed or stored in the United States at a location owned or
leased by the Borrower or any of its Domestic Subsidiaries; (e) if such
inventory is housed or stored at a location which is leased, and not owned by
the Borrower or any of its Domestic Subsidiaries, the owner of such leased
facility shall have subordinated or waived any Lien it may claim against such
inventory, whether contractual or statutory, to the Lien which the
Administrative Agent holds against such inventory for the ratable benefit of
the Lenders pursuant to a written subordination or waiver agreement acceptable
to the Administrative Agent in all respects, provided that during the
--------
six-month period immediately following the Closing Date such subordination and
waiver shall not be required for inventory housed or stored at the facility of
the Borrower and its Subsidiaries located in South Hackensack, New Jersey; (f)
such inventory must be adequately insured to the reasonable satisfaction of
the Administrative Agent pursuant to insurance coverage fulfilling the
requirements of Section 6.5 and of the Security Documents; and (g) the
Administrative Agent has not deemed such inventory ineligible because the
Administrative Agent reasonably considers the value thereof to be impaired or
its ability to realize such value to be insecure. Notwithstanding anything to
the contrary contained in this Agreement or any other Loan Document, no
inventory of any Dormant Subsidiary or any Subsidiary of the Borrower created
or acquired after the Closing Date (including any Subsidiary acquired pursuant
to Section 7.4(c)) shall be included within Eligible Inventory for purposes
hereof, unless and until the Administrative Agent shall have conducted a field
examination (at the Borrower's cost and expense) of such Subsidiary's books,
records and operations in order to reasonably satisfy the Administrative Agent
that the inventory components of such Subsidiary generally satisfy the
above-described standards of eligibility.
"Eligible Receivables": as at any date of determination thereof,
---------------------
Receivables created by the Borrower or any of its Domestic Subsidiaries (but
only to the extent that such Receivables are Collateral hereunder and are
subject to a first priority perfected Lien in favor of the Administrative
Agent for the ratable benefit of the Lenders) in the ordinary course of
business arising out of the sale of goods or rendering of services by the
Borrower or such Domestic Subsidiary, which are and at all times shall
continue to be acceptable to the Administrative Agent in all respects.
Standards of eligibility for Receivables may be fixed and revised from time to
time solely by the Administrative Agent in the Administrative Agent's
exclusive judgment with thirty days prior notice by the Administrative Agent
to the Borrower. In general, without limiting the foregoing, an Eligible
Receivable must comply with all of the following requirements: (a) all
payments due on the Receivable have been billed and invoiced in a timely
fashion and in the normal course of business; (b) no payment is outstanding on
the Receivable for more than 90 days after the date of invoice or is more than
60 days past due (to be reduced by the net credit balances within these
categories); (c) the payments due on 50% or more of all Receivables owing to
the Borrower and its Subsidiaries by the applicable account debtor are less
than 90 days past the date of invoice; (d) the total Receivables owing to the
Borrower and its Subsidiaries by the applicable account debtor constitute 10%
or less of the aggregate Receivables owing to the Borrower and its
Subsidiaries by all account debtors, or if the total Receivables of the
applicable account debtor exceed 10% of the aggregate of all Receivables owing
to the Borrower and its Subsidiaries by all account debtors, the Receivables
of the applicable account debtor up to such 10% limit shall be deemed to
constitute Eligible Receivables (subject to compliance with all other
applicable standards of eligibility) and the Receivables of the applicable
account debtor exceeding such 10% limit shall be included within Eligible
Receivables (subject to compliance with all other applicable standards of
eligibility) only if the Receivables exceeding such 10% limit are backed or
secured by credit insurance or a guarantee issued by a bank reasonably
satisfactory to the Administrative Agent in all respects and such credit
insurance or such guarantee has been assigned to or issued in favor of, as the
case may be, the Administrative Agent upon terms acceptable to the
Administrative Agent in its discretion; (e) the Receivable is free and clear
of all security interests, liens, charges and encumbrances of any nature
whatsoever (except for the Lien in favor of the Administrative Agent); (f) the
Receivable arose from a completed, outright and lawful sale of goods, to which
title has passed to the applicable account debtor on an absolute sales basis,
or from the rendering of services by or on behalf of the Borrower or any such
Domestic Subsidiary; (g) the Receivable constitutes an "account" within the
meaning of the Uniform Commercial Code of the state in which the Borrower's or
such Domestic Subsidiary's principal offices are located; (h) the Receivable
does not arise out of a xxxx and hold, sale-or-return, consignment, memo,
progress billing, promotional, sample or trial basis, C.O.D. or cash in
advance arrangement or is subject to any setoff, contra (any amount for which
there is an offsetting liability from the Borrower or any of its
Subsidiaries), offset, deduction, dispute, chargeback, credit, counterclaim,
subject to retainage or holdbacks of any type or other defense arising out of
the transactions represented by the Receivable or independently thereof; (i)
the applicable account debtor has finally accepted the goods or services from
the sale out of which the Receivable arose and has not objected to such
account debtor's liability thereon or returned, rejected or repossessed any of
such goods, except for complaints made or goods returned in the ordinary
course of business for which, in the case of goods returned, goods of equal or
greater value have been shipped in return; (j) the applicable account debtor
is not any Governmental Authority, unless there has been compliance
satisfactory to the Administrative Agent in all respects with the Assignment
of Claims Act or similar state statutes; (k) the applicable account debtor is
not an Affiliate of the Borrower or any of its Subsidiaries or an employee,
officer, sales representative, agent or shareholder thereof; (l) the account
debtor must be located in the United States, except for Receivables insured or
backed by credit insurance or a letter of credit in form and substance
acceptable to the Administrative Agent in all respects; (m) the Receivable
complies with all material Requirements of Law (including without limitation,
all usury laws, fair credit reporting and billing laws, fair debt collection
practices and rules, and regulations relating to truth in lending and other
similar matters); (n) the Receivable is in full force and effect and
constitutes a legal, valid and binding obligation of the applicable account
debtor enforceable in accordance with the terms thereof; (o) the Receivable is
denominated in and provides for payment by the applicable account debtor in
Dollars; (p) the Receivable has not been and is not required to be charged or
written off as uncollectible in accordance with GAAP; (q) if the Receivable is
owing by an account debtor for which the Borrower or the applicable Domestic
Subsidiary must have filed a "Notice of Business Activities Report" or similar
report in a state or states where failure to comply with such filing of notice
precludes bringing suit against the applicable account debtor, the Borrower or
the applicable Domestic Subsidiary must have filed such requisite activities
report or other similar report and otherwise be in full compliance with such
Requirement of Law; and (r) if the Receivable arises out of a "backhauling"
arrangement, such Receivable shall be only included within Eligible
Receivables (subject to compliance with all other applicable standards of
eligibility) to the extent that the aggregate amount of all other Eligible
Receivables arising out of "backhauling" arrangements does not exceed
$500,000. Notwithstanding anything to the contrary contained in this
Agreement or any other Loan Document, no Receivables of any Dormant Subsidiary
or any Subsidiary of the Borrower created or acquired after the Closing Date
(including any Subsidiary acquired pursuant to Section 7.4(c)) shall be
included within Eligible Receivables for purposes hereof, unless and until the
Administrative Agent shall have conducted a field examination (at the
Borrower's cost and expense) of such Subsidiary's books, records and
operations in order to reasonably satisfy the Administrative Agent that the
Receivables of such Subsidiary generally satisfy the above-described standards
of eligibility.
"Environmental Laws": any and all laws, rules, orders, regulations,
------------------
statutes, ordinances, guidelines, codes or decrees of the United States or any
other nation, or any state, local, municipal or other Governmental Authority
or other Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of human
health or the environment, as now or may at any time hereafter be in effect.
"Environmental Permits": any and all permits, licenses,
----------------------
registrations, approvals, notifications, exemptions and any other
authorization required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
-----------------------------------
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board) maintained by a
member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
----------------------
Interest Period pertaining to a Eurodollar Loan, the rate per annum at which
the Administrative Agent is offered Dollar deposits at or about 11:00 A.M.,
New York City time, two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where its eurodollar and foreign
currency and exchange operations are then being conducted for delivery on the
first day of such Interest Period for the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which
-----------------
is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
----------------
Period pertaining to a Eurodollar Loan, a rate per annum determined for such
day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):
Eurodollar Base Rate
-----------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
------------------
the then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
------------------
provided that any requirement for the giving of notice, the lapse of time, or
--------
both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
------------------
excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) an amount equal to the amount of all
non-cash charges (including depreciation and amortization) deducted in
arriving at such Consolidated Net Income, (iii) decreases in Consolidated
Working Capital for such fiscal year, (iv) an amount equal to the aggregate
net non-cash loss on the Disposition of Property by the Borrower and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income and (v) the net increase during such fiscal year (if
any) in deferred tax accounts of the Borrower over (b) the sum, without
----
duplication, of (i) an amount equal to the amount of all non-cash credits
included in arriving at such Consolidated Net Income, (ii) the aggregate
amount actually paid by the Borrower and its Subsidiaries in cash during such
fiscal year on account of Capital Expenditures (excluding the principal amount
of Indebtedness incurred in connection with such expenditures), (iii) the
aggregate amount of all prepayments of Revolving Credit Loans and Swing Line
Loans during such fiscal year to the extent accompanying permanent optional
reductions of the Revolving Credit Commitments and all optional prepayments of
the Term Loans during such fiscal year, (iv) the aggregate amount of all
regularly scheduled principal payments of Funded Debt (including, without
limitation, the Term Loans) of the Borrower and its Subsidiaries made during
such fiscal year (other than in respect of any revolving credit facility to
the extent there is not an equivalent permanent reduction in commitments
thereunder), (v) increases in Consolidated Working Capital for such fiscal
year, (vi) an amount equal to the aggregate net non-cash or cash gain on the
Disposition of Property by the Borrower and its Subsidiaries during such
fiscal year (other than sales of inventory in the ordinary course of
business), to the extent included in arriving at such Consolidated Net Income,
(vii) the net decrease during such fiscal year (if any) in deferred tax
accounts of the Borrower (viii) the amount actually paid by the Borrower and
its Subsidiaries in cash during such fiscal year on account of restructuring
charges in connection with the Acquisition, not to exceed $1,500,000 in the
aggregate and (ix) to the extent not deducted in determining Consolidated Net
Income for such year, the amount actually paid by the Borrower and its
Subsidiaries in cash during such fiscal year on account of contingent
liabilities in connection with the purchase of assets of USA Windowman, Inc.
in May, 1997, not to exceed $1,800,000 in the aggregate.
"Excess Cash Flow Application Date": as defined in Section 2.12(c).
---------------------------------
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in respect
------------------------------
of which either (i) the pledge of all of the Capital Stock of such Subsidiary
as Collateral or (ii) the guaranteeing by such Subsidiary of the Obligations,
would, in the good faith judgment of the Borrower, result in adverse tax
consequences to the Borrower.
"Existing Credit Facilities": each of (a) the Credit Agreement made
--------------------------
and entered into as of May 9, 1997 by and among the Borrower, the financial
institutions party thereto and The Chase Manhattan Bank, as agent for such
financial institutions and (b) the Credit Facility and Security Agreement,
dated December 18, 1996, by and among Alpine Industries, Inc., Care Free
Aluminum Products, Inc., Ultra Building Systems, Inc. and KeyBank National
Association.
"Facility": each of (a) the Tranche A Term Loan Commitments and the
--------
Tranche A Term Loans made thereunder (the "Tranche A Term Loan Facility"), (b)
----------------------------
the Tranche B Term Loan Commitments and the Tranche B Term Loans made
thereunder (the "Tranche B Term Loan Facility") and (c) the Revolving Credit
----------------------------
Commitments and the extensions of credit made thereunder (the "Revolving
---------
Credit Facility").
----------------
"Federal Funds Effective Rate": for any day, 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 on the
next succeeding 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 the day of such transactions received by the Reference
Lender from three federal funds brokers of recognized standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
-------------------
Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such Person
------------
that matures more than one year from the date of its creation or matures
within one year from such date but is renewable or extendible, at the option
of such Person, to a date more than one year from such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date, including,
without limitation, all current maturities and current sinking fund payments
in respect of such Indebtedness whether or not required to be paid within one
year from the date of its creation and, in the case of the Borrower,
Indebtedness in respect of the Loans.
"Funding Office": the office of the Administrative Agent set forth
---------------
in Section 10.2.
"GAAP": generally accepted accounting principles in the United
----
States of America as in effect from time to time, except that for purposes of
Section 7.1, GAAP shall be determined on the basis of such principles in
effect on the date hereof and consistent with those used in the preparation of
the most recent audited financial statements delivered pursuant to Section
4.1(b). In the event that any "Accounting Change" (as defined below) shall
occur and such change results in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then the Borrower
and the Administrative Agent agree to enter into negotiations in order to
amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
the Borrower's financial condition shall be the same after such Accounting
Changes as if such Accounting Changes had not been made. Until such time as
such an amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants or, if applicable, the Securities and Exchange Commission
(or successors thereto or agencies with similar functions).
Xxxxxx Group Consulting Agreements": (a) that certain consulting
-------------------------------------
agreement dated on or about the Closing Date, by and between Xxxxxx Group,
Inc. and the Borrower, (b) any and all additional consulting agreements
entered into by and between Xxxxxx Group, Inc. and the Borrower or any of the
Borrower's Subsidiaries after the Closing Date, in connection with any
acquisition, consolidation or merger permitted by Section 7.4(c) (so long as
only one such consulting agreement is entered into by and between Xxxxxx
Group, Inc. and the Borrower or the applicable Subsidiary for each such
acquisition, consolidation or merger), and (c) any and all extensions,
modifications and amendments of any of such consulting agreements each of
which consulting agreements, additional consulting agreements, and extensions,
modifications and amendments thereof shall be reasonably satisfactory to the
Administrative Agent of the time of execution thereof; provided, however, that
-------- -------
in no event shall (i) the term of such consulting agreement dated on or about
the Closing Date be extended beyond thirty-six (36) months after the Closing
Date or (ii) all of the payments (including reimbursements of expenses) made
and to be made by the Borrower and its Subsidiaries under such consulting
agreement dated on or about the Closing Date exceed $4,500,000 in the
aggregate or (iii) all of the payments including reimbursements of expenses)
made and to be made by the Borrower or its applicable Subsidiary under any
such consulting agreement entered into after the Closing Date exceed 7% of the
aggregate purchase price of the acquisition, consolidation or merger giving
rise to such consulting agreement.
"Governmental Authority": any nation or government, any state or
-----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government (including, without limitation, the National Association of
Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and Collateral
-----------------------------------
Agreement to be executed and delivered by Holdings, the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A, as the same may
be amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
--------------------- ------------
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends or other obligations
(the "primary obligations") of any other third Person (the "primary obligor")
------------------- ---------------
in any manner, whether directly or indirectly, including, without limitation,
any obligation of the guaranteeing 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 (1) for the
purchase or payment of any such primary obligation or (2) 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
owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
-------- -------
endorsements of instruments for deposit or collection in the ordinary course
of business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall
be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantors": the collective reference to Holdings and the
----------
Subsidiary Guarantors.
"Holdings": RBPI Holding Corporation, a Delaware corporation.
--------
"Indebtedness": of any Person at any date, without duplication, (a)
------------
all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of Property or services (other
than current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such Property), (e) all Capital Lease
Obligations of such Person, (f) all obligations of such Person, contingent or
otherwise, as an account party under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any Capital Stock
(other than common stock) of such Person, (h) all Guarantee Obligations of
such Person in respect of obligations of the kind referred to in clauses (a)
through (g) above; (i) all obligations of the kind referred to in clauses (a)
through (h) above secured by (or for which the holder of such obligation has
an existing right, contingent or otherwise, to be secured by) any Lien on
Property (including, without limitation, accounts and contract rights) owned
by such Person, whether or not such Person has assumed or become liable for
the payment of such obligation, (j) for the purposes of Section 8(e) only, all
obligations of such Person in respect of Interest Rate Protection Agreements
and (k) the liquidation value of any preferred Capital Stock of such Person or
its Subsidiaries held by any Person other than such Person and its Wholly
Owned Subsidiaries.
"Independent Financial Advisor": a nationally recognized accounting,
-----------------------------
appraisal, investment banking firm or consultant that is, in the judgment of
the Borrower's Board of Directors, qualified to perform the task for which it
has been engaged (a) which does not, and whose directors, officers and
employees or affiliates do not, have a direct or indirect financial interest
in the Borrower or any of its Subsidiaries and (b) which, in the judgment of
the Board of Directors of the Borrower, is otherwise independent and qualified
to perform the task for which it is to be engaged.
"Insolvency": with respect to any Multiemployer Plan, the condition
----------
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
---------
"Intellectual Property": the collective reference to all rights,
----------------------
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, technology, know-how and processes, and all
rights to xxx at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day
---------------------
of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period
longer than three months, each day which is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day of such
Interest Period and (d) as to any Loan (other than any Revolving Credit Loan
that is a Base Rate Loan and any Swing Line Loan), the date of any repayment
or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
----------------
period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice
of conversion, as the case may be, given with respect thereto; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Eurodollar Loan and ending one, two, three
or six months thereafter, as selected by the Borrower by irrevocable notice to
the Administrative Agent not less than three Business Days prior to the last
day of the then current Interest Period with respect thereto; provided that,
--------
all of the foregoing provisions relating to Interest Periods are subject to
the following:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend
beyond the Scheduled Revolving Credit Termination Date or beyond the date
final payment is due on the Tranche A Term Loan or the Tranche B Term Loans,
as the case may be, shall end on the Revolving Credit Termination Date or such
due date, as applicable;
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Interest Rate Protection Agreement": any interest rate protection
-----------------------------------
agreement, interest rate futures contract, interest rate option, interest rate
cap or other interest rate hedge arrangement, to or under which the Borrower
or any of its Subsidiaries is a party or a beneficiary on the date hereof or
becomes a party or a beneficiary after the date hereof.
"Issuing Lender": Chase Bank of Texas, in its capacity as issuer of
--------------
any Letter of Credit.
"L/C Commitment": $12,000,000.
---------------
"L/C Fee Payment Date": the last day of each March, June, September
--------------------
and December and the last day of the Revolving Credit Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of (a)
----------------
the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit which have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Revolving
-----------------
Credit Lenders other than the Issuing Lender.
"Letters of Credit": as defined in Section 3.1(a).
-------------------
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
----
"Loan Documents": this Agreement, the Security Documents and the
---------------
Notes.
"Loan Parties": Holdings, the Borrower and each Subsidiary of the
-------------
Borrower which is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
---------------------------
holders of more than 50% of the aggregate unpaid principal amount of the Term
Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Credit
Facility, prior to any termination of the Revolving Credit Commitments, the
holders of more than 50% of the Total Revolving Credit Commitments).
"Majority Revolving Credit Facility Lenders": the Majority Facility
------------------------------------------
Lenders in respect of the Revolving Credit Facility.
"Material Adverse Effect": a material adverse effect on (a) the
-------------------------
Acquisition, (b) the business, assets, property, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole
or (c) the validity or enforceability of this Agreement or any of the other
Loan Documents or the rights or remedies of the Administrative Agent or the
Lenders hereunder or thereunder.
"Material Environmental Amount": an amount payable by the Borrower
------------------------------
and/or its Subsidiaries in excess of $1,500,000 for remedial costs, compliance
costs, compensatory damages, punitive damages, fines, penalties or any
combination thereof.
"Materials of Environmental Concern": any gasoline or petroleum
-------------------------------------
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or forces of any kind,
whether or not any such substance or force is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise
to liability under any Environmental Law.
"Mortgaged Properties": the real properties listed on Schedule
---------------------
1.1B, as to which the Administrative Agent for the benefit of the Lenders
shall be granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by any
---------
Loan Party in favor of, or for the benefit of, the Administrative Agent for
the benefit of the Lenders, substantially in the form of Exhibit D (with such
changes thereto as shall be advisable under the law of the jurisdiction in
which such mortgage or deed of trust is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as
-------------------
defined in Section 4001(a)(3) of ERISA.
"Net Amount of Eligible Receivables": at any time, without
--------------------------------------
duplication, the gross amount of Eligible Receivables at such time less each
----
of the following items: (a) returns, discounts, claims, credits and
allowances of any nature asserted or taken by account debtors of the Borrower
or any of its Subsidiaries (to the extent the same are included in
Receivables); (b) the amount of the service expense portion of the warranty
reserve established for field-related warranty expenditures for repair and
replacement of the Borrower and its Subsidiaries (determined in accordance
with GAAP); and (c) the amount of Dilution Reserve then in effect.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
-------------------
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured
by a Lien expressly permitted hereunder on any asset which is the subject of
such Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and (b) in connection
with any issuance or sale of equity securities or debt securities or
instruments or the incurrence of loans, the cash proceeds received from such
issuance or incurrence, net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other customary
fees and expenses actually incurred in connection therewith.
"Non-Excluded Taxes": as defined in Section 2.20(a).
-------------------
"Non-U.S. Lender": as defined in Section 2.20(d).
----------------
"Notes": the collective reference to any promissory note evidencing
-----
Loans.
"Obligations": the unpaid principal of and interest on (including,
-----------
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Loans
and all other obligations and liabilities of the Borrower to the
Administrative Agent or to any Lender (or, in the case of Interest Rate
Protection Agreements, any affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Interest Rate
Protection Agreement entered into with any Lender or any affiliate of any
Lender or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise.
"Other Taxes": any and all present or future stamp or documentary
------------
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
"Participant": as defined in Section 10.6(b).
-----------
"Payment Office": the office of the Administrative Agent set forth
---------------
in Section 10.2.
"PBGC": the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": as defined in Section 7.4(c).
----------------------
"Permitted Affiliate Sale of Receivables": any sale, assignment,
-------------------------------------------
transfer or other disposition by the Borrower or any of its Subsidiaries to
any of their respective Affiliates of any Receivables which do not constitute
Eligible Receivables, so long as (a) the consideration received by the
Borrower or the applicable Subsidiary upon the disposition of the applicable
Receivables is approximately equivalent to the original invoice amount(s)
giving rise to such Receivables and (b) the aggregate amount of such sales,
assignments, transfers or other dispositions from the Closing Date do not
exceed $5,000,000.
"Permitted Affiliate Transactions": any of the following: (a)
----------------------------------
transactions with or among the Borrower and any Wholly Owned Subsidiary
Guarantor; (b) customary directors' fees, customary directors'
indemnifications and similar arrangements for directors and officers of the
Borrower or any of its Subsidiaries entered into in the ordinary course of
business, together with any payments made under any such indemnification
arrangements; (c) the issuance and sale by the Borrower to its shareholders of
additional Capital Stock; (d) any payment or distribution made pursuant to any
applicable Restricted Payment Exception; (e) loans and advances to officers,
directors and employees of the Borrower or any of its Subsidiaries for travel,
entertainment, moving and other relocation expenses, in each case made in the
ordinary course of business; (f) loans and advances to officers, directors and
employees of the Borrower or any of its Subsidiaries for purchases of the
Capital Stock of Holdings, so long as the amount of such loans and advances do
not exceed $750,000 in the aggregate; (g) the incurrence of intercompany
Indebtedness permitted pursuant to Section 7.2(b); (h) that certain tax
sharing arrangement entered into as of the Closing Date by and among the
Borrower and each of its Subsidiaries, which shall be reasonably satisfactory
to the Administrative Agent; (i) the Xxxxxx Group Consulting Agreements and,
so long as no Default or Event of Default has occurred and is continuing or
would result therefrom, any payment pursuant to the terms thereof; (j) any
Permitted Affiliate Sale of Receivables; and (k) So long as no Default or
Event of Default has occurred and is continuing or would result therefrom, the
purchase, redemption or other acquisition for value by the Borrower or any of
its Subsidiaries of any Capital Stock of the Borrower or any of its
Subsidiaries held by officers, employees, former officers or former employees
of the Borrower or any of its Subsidiaries (or the estates or beneficiaries of
such officers, employees, former officers or former employees) upon death,
disability, retirement or termination of employment, or dividends by the
Borrower to Holdings to effect the same in respect of any Capital Stock of
Holdings or any direct or indirect equity interest of Reliant Partners, so
long as the amount of such purchases, redemptions, acquisitions or dividends
do not, in the aggregate, exceed $2,000,000.
"Permitted Transferees": with respect to any Person: (a) in the
----------------------
case of any Person who is a natural person, such individual's spouse or
children, any trust for such individual's benefit or the benefit of such
individual's spouse or children, or any corporation or partnership in which
the direct and beneficial owner of all of the equity interest is such natural
Person or such individual's spouse or children or any trust for the benefit of
such Persons; (b) in the case of any Person who is a natural person, the
heirs, beneficiaries, executors, administrators or personal representatives of
such natural Person upon the death of such Person or upon the incompetency or
disability of such Person for purposes of the protection and management of
such individual's assets; and (c) in the case of any Person who is not a
natural Person, any Affiliate of such Person.
"Person": an individual, partnership, corporation, limited
------
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan which is
----
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pricing Grid": the pricing grid attached hereto as Annex A.
-------------
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
--------------------------
"Projections": as defined in Section 6.2(e).
-----------
"Proper Form": in form and substance satisfactory to the
------------
Administrative Agent.
"Properties": the facilities and properties owned, leased or
----------
operated by Holdings, the Borrower or any of its Subsidiaries.
"Property": any right or interest in or to property of any kind
--------
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Receivables": all of the accounts, instruments, documents, chattel
-----------
paper and general intangibles of the Borrower or any of its Subsidiaries,
whether secured or unsecured, whether now existing or hereafter created or
arising, and whether or not specifically assigned to the Administrative Agent
for the ratable benefit of the Lenders.
"Recovery Event": any settlement of or payment in respect of any
---------------
property or casualty insurance claim or any condemnation proceeding relating
to any asset of the Borrower or any of its Subsidiaries.
"Reference Lender": Chase Bank of Texas.
-----------------
"Refunded Swing Line Loans": as defined in Section 2.7(b).
----------------------------
"Refunding Date": as defined in Section 2.7(c).
---------------
"Register": as defined in Section 10.6(d).
--------
"Regulation G": Regulation G of the Board as in effect from time to
------------
time.
"Regulation U": Regulation U of the Board as in effect from time to
------------
time.
"Reimbursement Obligation": the obligation of the Borrower to
-------------------------
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Reliant Partners Entities": Reliant Partners, L.P., a Texas limited
-------------------------
partnership, and Reliant Partners II, L.P., a Texas limited partnership.
"Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b)
-----------------
of ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
Section 4043.
"Required Lenders": the holders of more than 50% of (a) until the
-----------------
Closing Date, the Commitments and (b) thereafter, the sum of (i) the aggregate
unpaid principal amount of the Term Loans and (ii) the Total Revolving Credit
Commitments or, if the Revolving Credit Commitments have been terminated, the
Total Revolving Extensions of Credit.
"Required Prepayment Lenders": the Majority Facility Lenders in
-----------------------------
respect of each Facility.
"Requirement of Law": as to any Person, the Certificate of
--------------------
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person
or any of its Property is subject.
"Responsible Officer": any president, vice president, chief
--------------------
financial officer, treasurer or assistant treasurer of the Borrower, but in
any event, with respect to financial matters, the chief financial officer,
treasurer or assistant treasurer of the Borrower.
"Restricted Payment Exception": as defined in Section 7.6(b).
------------------------------
"Revolving Credit Availability": at any time an amount equal to the
-----------------------------
excess, if any, of (a) the lesser at such time of (i) the Total Revolving
Credit Commitments (as such amount may be reduced in accordance with the
provisions of this Agreement) and (ii) the Borrowing Base, over (b) the Total
----
Revolving Credit Extensions.
"Revolving Credit Commitment": as to any Lender, the obligation of
----------------------------
such Lender, if any, to make Revolving Credit Loans and participate in Swing
Line Loans and Letters of Credit, in an aggregate principal and/or face amount
not to exceed the amount set forth under the heading "Revolving Credit
Commitment" opposite such Lender's name on Schedule 1.1A, as the same may be
changed from time to time pursuant to the terms hereof. The original amount
of the Total Revolving Credit Commitments is $40,000,000.
"Revolving Credit Commitment Period": the period from and including
----------------------------------
the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Lender": each Lender which has a Revolving Credit
-----------------------
Commitment or which has made Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
------------------------
"Revolving Credit Percentage": as to any Revolving Credit Lender at
---------------------------
any time, the percentage which such Lender's Revolving Credit Commitment then
constitutes of the Total Revolving Credit Commitments (or, at any time after
the Revolving Credit Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Lender's Revolving
Credit Loans then outstanding constitutes of the aggregate principal amount of
the Revolving Credit Loans then outstanding).
"Revolving Credit Termination Date": the earlier of (a) the
------------------------------------
Scheduled Revolving Credit Termination Date and (b) the date on which the
Tranche A Term Loans shall be paid in full.
"Revolving Extensions of Credit": as to any Revolving Credit Lender
------------------------------
at any time, an amount equal to the sum of (a) the aggregate principal amount
of all Revolving Credit Loans made by such Lender then outstanding, (b) such
Lender's Revolving Credit Percentage of the L/C Obligations then outstanding
and (c) such Lender's Revolving Credit Percentage of the aggregate principal
amount of Swing Line Loans then outstanding.
"Scheduled Revolving Credit Termination Date": December 31, 2003.
---------------------------------------------
"Security Documents": the collective reference to the Guarantee and
------------------
Collateral Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any Property of any
Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.
"Seller Note": the RBPI Holding Corporation Subordinated Note
------------
issued by Holdings dated May 9, 1997, in a principal amount of $9,800,000 and
any refinancing thereof that is subordinated to the obligations of Holdings in
respect of the Guarantee and Collateral Agreement (without any advancement of
the maturity date thereof).
"Senior Subordinated Note Indenture": the Indenture dated as of May
----------------------------------
9, 1997 entered into by the Borrower and certain of its Subsidiaries in
connection with the issuance of the Senior Subordinated Notes, at a par value
of $70,000,000 in aggregate principal amount, together with all instruments
and other agreements entered into by the Borrower or such Subsidiaries in
connection therewith, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 7.9.
"Senior Subordinated Notes": the subordinated notes of the Borrower
-------------------------
issued pursuant to the Senior Subordinated Note Indenture.
"Single Employer Plan": any Plan which is covered by Title IV of
----------------------
ERISA, but which is not a Multiemployer Plan.
"Slow Moving Reserve": with respect to the Borrower and its
---------------------
Domestic Subsidiaries, at any date, the amount equal to the result of (a) 3%
(this percentage will be reviewed by the Administrative Agent on an annual
basis and adjusted based upon appropriate monitoring of excess, slow-moving
and obsolete inventory items) multiplied by (b) the amount of Eligible
--------------
Inventory at such date.
"Solvent": when used with respect to any Person, means that, as of
-------
any date of determination, (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and
state laws governing determinations of the insolvency of debtors, (b) the
present fair saleable value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the liability of
such Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person will be able to pay
its debts as they mature. For purposes of this definition, (i) "debt" means
liability on a "claim", and (ii) "claim" means any (x) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured or unmatured, disputed, undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control" as defined in
----------------------------
the Senior Subordinated Note Indenture.
"Subordinated Indebtedness": with respect to the Borrower,
--------------------------
Indebtedness subordinated in right of payment to the Obligations on terms
satisfactory to and approved in writing by the Administrative Agent in its
discretion, together with any refinancings, refundings, renewals or extensions
thereof (without any increase in the principal amount thereof). For purposes
hereof, Indebtedness in respect of the Senior Subordinated Notes shall be
deemed to be Subordinated Indebtedness.
"Subsidiary": as to any Person, a corporation, partnership, limited
----------
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers
of such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than
---------------------
any Excluded Foreign Subsidiary.
"Swing Line Commitment": the obligation of the Swing Line Lender to
---------------------
make Swing Line Loans pursuant to Section 2.6 in an aggregate principal amount
at any one time outstanding not to exceed $5,000,000.
"Swing Line Lender": Chase Bank of Texas, in its capacity as the
-------------------
lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.6.
------------------
"Swing Line Participation Amount": as defined in Section 2.7.
----------------------------------
"Target": as defined in the recitals hereto.
------
"Term Loan Lenders": the collective reference to the Tranche A Term
-----------------
Loan Lenders and the Tranche B Term Loan Lenders.
"Term Loans": the collective reference to the Tranche A Term Loans
-----------
and Tranche B Term Loans.
"Total Revolving Credit Commitments": at any time, the aggregate
-------------------------------------
amount of the Revolving Credit Commitments at such time.
"Total Revolving Extensions of Credit": at any time, the aggregate
-------------------------------------
amount of the Revolving Extensions of Credit of the Revolving Credit Lenders
at such time.
"Tranche A Term Loan": as defined in Section 2.1.
----------------------
"Tranche A Term Loan Commitment": as to any Lender, the obligation
-------------------------------
of such Lender, if any, to make a Tranche A Term Loan to the Borrower
hereunder in a principal amount not to exceed the amount set forth under the
heading "Tranche A Term Loan Commitment" opposite such Lender's name on
Schedule 1.1A. The original aggregate amount of the Tranche A Term Loan
Commitments is $40,000,000.
"Tranche A Term Loan Lender": each Lender which has a Tranche A
------------------------------
Term Loan Commitment or which has made a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to Tranche A Term Loan Lender
-------------------------------
at any time, the percentage which such Lender's Tranche A Term Loan Commitment
then constitutes of the aggregate Tranche A Term Loan Commitments (or, at any
time after the Closing Date, the percentage which the aggregate principal
amount of such Lender's Tranche A Term Loans then outstanding constitutes of
the aggregate principal amount of the Tranche A Term Loans then outstanding).
"Tranche B Term Loan": as defined in Section 2.1.
----------------------
"Tranche B Term Loan Commitment": as to Tranche B Term Loan Lender,
------------------------------
the obligation of such Lender, if any, to make a Tranche B Term Loan to the
Borrower hereunder in a principal amount not to exceed the amount set forth
under the heading "Tranche B Term Loan Commitment" opposite such Lender's name
on Schedule 1.1A. The original aggregate amount of the Tranche B Term Loan
Commitments is $65,000,000.
"Tranche B Term Loan Lender": each Lender which has a Tranche B
------------------------------
Term Loan Commitment or which has made a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Lender at any time, the
------------------------------
percentage which such Lender's Tranche B Term Loan Commitment then constitutes
of the aggregate Tranche B Term Loan Commitments (or, at any time after the
Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding); provided, that
--------
solely for purposes of calculating the amount of each installment of Tranche B
Term Loans (other than the last installment) payable to a Term Loan Lender
pursuant to Section 2.3(b), such Term Loan Lender's Tranche B Term Loan
Percentage shall be calculated without giving effect to any portion of any
prior mandatory or optional prepayment attributable to such Term Loan Lender's
Tranche B Term Loans which shall have been declined by such Term Loan Lender
(or, in the case of any Term Loan Lender which shall have acquired its Tranche
B Term Loans by assignment from another Person, by such other Person).
"Transferee": as defined in Section 10.15.
----------
"Type": as to any Loan, its nature as a Base Rate Loan or a
----
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
---------------
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"Wholly Owned Subsidiary": as to any Person, any other Person all
-------------------------
of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that
----------------------------------
is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions Other Definitional Provisions.
------------------------------ -----------------------------
(a) Unless otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in the other Loan Documents or any
certificate or other document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to Holdings, the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments Subject to the terms and conditions
----------------------
hereof, (a) each Tranche A Term Loan Lender severally agrees to make a term
loan (a "Tranche A Term Loan") to the Borrower on the
-------------------
Closing Date in an amount not to exceed the amount of the Tranche A Term Loan
Commitment of such Lender and (b) each Tranche B Term Loan Lender severally
agrees to make a term loan (a "Tranche B Term Loan") to the Borrower on the
-------------------
Closing Date in an amount not to exceed the amount of the Tranche B Term Loan
Commitment of such Lender. The Term Loans may from time to time be Eurodollar
Loans or Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.13.
2.2 Procedure for Term Loan Borrowing.
-------------------------------------
The Borrower shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to
10:00 A.M., Houston, Texas time, one Business Day prior to the anticipated
Closing Date) requesting that the Term Loan Lenders make the Term Loans on the
Closing Date and specifying the amount to be borrowed. The Term Loans made on
the Closing Date shall initially be Base Rate Loans. Upon receipt of such
notice the Administrative Agent shall promptly notify each Term Loan Lender
thereof. Not later than 12:00 Noon, Houston, Texas time, on the Closing Date
each Term Loan Lender shall make available to the Administrative Agent at the
Funding Office an amount in immediately available funds equal to the Term Loan
or Term Loans to be made by such Lender. The Administrative Agent shall make
available to the Borrower with the aggregate of the amounts made available to
the Administrative Agent by the Term Loan Lenders in immediately available
funds.
2.3 Repayment of Term Loans. (a) The
-----------------------
Tranche A Term Loan of each Tranche A Lender shall mature in 20 consecutive
quarterly installments, commencing on June 30, 1999, each of which shall be in
an amount equal to such Lender's Tranche A Term Loan Percentage multiplied by
the amount set forth below opposite such installment:
Installment. . . . Principal Amount
------------------ -----------------
June 30, 1999. . . $ 666,667
September 30, 1999 666,667
December 31, 1999. 666,666
March 31, 2000 . . 2,000,000
June 30, 2000. . . 2,000,000
September 30, 2000 2,000,000
December 31, 2000. 2,000,000
March 31, 2001 . . 2,500,000
June 30, 2001. . . 2,500,000
September 30, 2001 2,500,000
December 31, 2001. 2,500,000
March 31, 2002 . . 2,500,000
June 30, 2002. . . 2,500,000
September 30, 2002 2,500,000
December 31, 2002. 2,500,000
March 31, 2003 . . 2,500,000
June 30, 2003. . . 2,500,000
September 30, 2003 2,500,000
December 31, 2003. 2,500,000
(b) The Tranche B Term Loan of each Tranche B Lender shall mature
in 24 consecutive quarterly installments, commencing on June 30, 1998, each of
which shall be in an amount equal to such Lender's Tranche B Term Loan
Percentage multiplied by the amount set forth below opposite such installment:
Installment. . . . Principal Amount
------------------ -----------------
June 30, 1998. . . $ 250,000
September 30, 1998 250,000
December 31, 1998. 250,000
March 31, 1999 . . 187,500
June 30, 1999. . . 187,500
September 30, 1999 187,500
December 31, 1999. 187,500
March 31, 2000 . . 187,500
June 30, 2000. . . 187,500
September 30, 2000 187,500
December 31, 2000. 187,500
March 31, 2001 . . 187,500
June 30, 2001. . . 187,500
September 30, 2001 187,500
December 31, 2001. 187,500
March 31, 2002 . . 187,500
June 30, 2002. . . 187,500
September 30, 2002 187,500
December 31, 2002. 187,500
March 31, 2003 . . 187,500
June 30, 2003. . . 187,500
September 30, 2003 187,500
December 31, 2003. 187,500
March 31, 2004 . . 60,500,000
2.4 Revolving Credit Commitments.
----------------------------
(a) Subject to the terms and conditions hereof, each Revolving Credit Lender
severally agrees to make revolving credit loans ("Revolving Credit Loans") to
----------------------
the Borrower from time to time during the Revolving Credit Commitment Period
in an aggregate principal amount at any one time outstanding which, when added
to such Lender's Revolving Credit Percentage of the sum of (i) the L/C
Obligations then outstanding and (ii) the aggregate principal amount of the
Swing Line Loans then outstanding, does not exceed the amount of such Lender's
Revolving Credit Commitment; provided that no Revolving Credit Lender shall be
--------
required to make a Revolving Credit Loan to the extent that, after giving
effect thereto, the Total Revolving Extensions of Credit at such time would
exceed the Borrowing Base at such time. During the Revolving Credit
Commitment Period the Borrower may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Credit Loans may from time to time be Eurodollar Loans or Base Rate
Loans, as determined by the Borrower and notified to the Administrative Agent
in accordance with Sections 2.5 and 2.13, provided that no Revolving Credit
--------
Loan shall be made as a Eurodollar Loan after the day that is one month prior
to the Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit Loans
on the Revolving Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing.
-------------------------------------------
The Borrower may borrow under the Revolving
Credit Commitments during the Revolving Credit Commitment Period on any
Business Day, provided that the Borrower shall give the Administrative Agent
--------
irrevocable notice (which notice must be received by the Administrative Agent
prior to 11:00 a.m., Houston, Texas time, (a) three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business
Day prior to the requested Borrowing Date, in the case of Base Rate Loans),
specifying (i) the amount and Type of Revolving Credit Loans to be borrowed,
(ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans,
the respective amounts of each such Type of Loan and the respective lengths of
the initial Interest Period therefor. Any Revolving Credit Loans made on the
Closing Date shall initially be Base Rate Loans. Each borrowing under the
Revolving Credit Commitments shall be in an amount equal to (x) in the case of
Base Rate Loans, $1,000,000 or a whole multiple thereof (or, if the then
aggregate Available Revolving Credit Commitments are less than $1,000,000,
such lesser amount) and (y) in the case of Eurodollar Loans, $5,000,000 or a
whole multiple of $1,000,000 in excess thereof; provided, that the Swing Line
--------
Lender may request, on behalf of the Borrower, borrowings under the Revolving
Credit Commitments which are Base Rate Loans in other amounts pursuant to
Section 2.7. Upon receipt of any such notice from the Borrower, the
Administrative Agent shall promptly notify each Revolving Credit Lender
thereof. Each Revolving Credit Lender will make the amount of its pro rata
--- ----
share of each borrowing available to the Administrative Agent for the account
of the Borrower at the Funding Office prior to 1:00 p.m., Houston Texas time,
on the Borrowing Date requested by the Borrower in funds immediately available
to the Administrative Agent. Such borrowing will then be made available to
the Borrower by the Administrative Agent in like funds as received by the
Administrative Agent.
2.6 Swing Line Commitment. (a) Subject
---------------------
to the terms and conditions hereof, the Swing Line Lender agrees to make a
portion of the credit otherwise available to the Borrower under the Revolving
Credit Commitments from time to time during the Revolving Credit Commitment
Period by making swing line loans ("Swing Line Loans") to the Borrower;
-----------------
provided that (i) the aggregate principal amount of Swing Line Loans
--------
outstanding at any time shall not exceed the Swing Line Commitment then in
effect (notwithstanding that the Swing Line Loans outstanding at any time,
when aggregated with the Swing Line Lender's other outstanding Revolving
Credit Loans hereunder, may exceed the Swing Line Commitment then in effect),
(ii) the Borrower shall not request, and the Swing Line Lender shall not make,
any Swing Line Loan if, after giving effect to the making of such Swing Line
Loan, the aggregate amount of the Available Revolving Credit Commitments would
be less than zero, (iii) the Borrower shall not request, and the Swing Line
Lender shall not make a Swing Line Loan to the extent that, after giving
effect thereto, the Total Revolving Extensions of Credit at such time would
exceed the Borrowing Base at such time. During the Revolving Credit
Commitment Period, the Borrower may use the Swing Line Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof. Swing Line Loans shall be Base Rate Loans only.
(b) The Borrower shall repay all outstanding Swing Line Loans on
the Revolving Credit Termination Date.
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line
-------------------------------------------------------------
Loans. (a)
-----
Whenever the Borrower desires that the Swing Line Lender make Swing Line Loans
it shall give the Swing Line Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swing
Line Lender not later than 12:00 Noon, Houston, Texas time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the
requested Borrowing Date (which shall be a Business Day during the Revolving
Credit Commitment Period). Each borrowing under the Swing Line Commitment
shall be in an amount equal to $500,000 or a whole multiple of $100,000 in
excess thereof. Not later than 2:00 P.M., Houston, Texas time, on the
Borrowing Date specified in a notice in respect of Swing Line Loans, the Swing
Line Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to the amount of the
Swing Line Loan to be made by the Swing Line Lender. The Administrative Agent
shall make the proceeds of such Swing Line Loan available to the Borrower on
such Borrowing Date in immediately available funds.
(b) The Swing Line Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one
Business Day's notice given by the Swing Line Lender, request each Revolving
Credit Lender to make, and each Revolving Credit Lender hereby agrees to make,
a Revolving Credit Loan, in an amount equal to such Revolving Credit Lender's
Revolving Credit Percentage of the aggregate amount of the Swing Line Loans
(the "Refunded Swing Line Loans") outstanding on the date of such notice, to
--------------------------
repay the Swing Line Lender. Each Revolving Credit Lender shall make the
amount of such Revolving Credit Loan available to the Administrative Agent at
the Funding Office in immediately available funds, not later than 10:00 A.M.,
Houston, Texas time, one Business Day after the date of such notice. The
proceeds of such Revolving Credit Loans shall be immediately applied by the
Swing Line Lender to repay the Refunded Swing Line Loans. The Borrower
irrevocably authorizes the Swing Line Lender to charge the Borrower's accounts
with the Administrative Agent (up to the amount available in each such
account) in order to immediately pay the amount of such Refunded Swing Line
Loans to the extent amounts received from the Revolving Credit Lenders are not
sufficient to repay in full such Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.7(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the
Borrower or if for any other reason, as determined by the Swing Line Lender in
its sole discretion, Revolving Credit Loans may not be made as contemplated by
Section 2.7(b), each Revolving Credit Lender shall, on the date such Revolving
Credit Loan was to have been made pursuant to the notice referred to in
Section 2.7(b) (the "Refunding Date"), purchase for cash an undivided
---------------
participating interest in an amount equal to (i) its Revolving Credit
Percentage times (ii) the aggregate principal amount of Swing Line Loans then
-----
outstanding which were to have been repaid with such Revolving Credit Loans
(the "Swing Line Participation Amount").
----------------------------------
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Lender's Swing Line Participation
Amount, the Swing Line Lender receives any payment on account of the Swing
Line Loans, the Swing Line Lender will distribute to such Lender its Swing
Line Participation Amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender's
participating interest was outstanding and funded and, in the case of
principal and interest payments, to reflect such Lender's pro rata portion of
--- ----
such payment if such payment is not sufficient to pay the principal of and
interest on all Swing Line Loans then due); provided, however, that in the
-------- -------
event that such payment received by the Swing Line Lender is required to be
returned, such Revolving Credit Lender will return to the Swing Line Lender
any portion thereof previously distributed to it by the Swing Line Lender.
(e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.7(b) and to purchase participating interests pursuant
to Section 2.7(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.8 Repayment of Loans; Evidence of Debt.
------------------------------------
(a) The Borrower hereby unconditionally promises to pay to
the Administrative Agent for the account of the appropriate Revolving Credit
Lender or Term Loan Lender, as the case may be, (i) the then unpaid principal
amount of each Revolving Credit Loan of such Revolving Credit Lender on the
Revolving Credit Termination Date (or such earlier date on which the Loans
become due and payable pursuant to Section 8) (ii) the then unpaid principal
amount of each Swing Line Loan of such Swing Line Lender on the Revolving
Credit Termination Date (or such earlier date on which the Loans become due
and payable pursuant to Section 8) and (iii) the principal amount of each Term
Loan of such Term Loan Lender in --installments according to the amortization
schedule set forth in Section 2.3 (or on such earlier date on which the Loans
become due and payable pursuant to Section 8). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Loans from time
to time outstanding from the date hereof until payment in full thereof at the
rates per annum, and on the dates, set forth in Section 2.15.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from each Loan of such Lender from time to time,
including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein
for each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Sections 2.8(b) and 10.6(d) shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
----- -----
amounts of the obligations of the Borrower therein recorded; provided,
--------
however, that the failure of any Lender or the Administrative Agent to
maintain the Register or any such account, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to such Borrower by such Lender in accordance with
the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing any Term Loans,
Revolving Credit Loans or Swing Line Loans, as the case may be, of such
Lender, substantially in the forms of Exhibit G-1, G-2 or G-3, respectively,
with appropriate insertions as to date and principal amount.
2.9 Commitment Fees, etc. (a) The Borrower
---------------------
agrees to pay to the Administrative Agent for the account of each Revolving
Credit Lender a commitment fee for the period from and including the Closing
Date to the last day of the Revolving Credit Commitment Period, computed at
the Commitment Fee Rate on the average daily amount of the Available Revolving
Credit Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June, September
and December and on the Revolving Credit Termination Date, commencing on the
first of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent the fees
in the amounts and on the dates from time to time agreed to in writing by the
Borrower and the Administrative Agent.
2.10 Termination or Reduction of Revolving Credit Commitments.
-----------------------------------------------------------
The Borrower shall have the right, upon not less than three Business Days'
Notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the amount of the Revolving
Credit Commitments; provided that no such termination or reduction of Revolving
--------
Credit Commitments shall be permitted if, after giving effect thereto and to
any prepayments of the Revolving Credit Loans and Swing Line Loans made on
the effective date thereof, the Total Revolving Extensions of Credit would
exceed the Total Revolving Credit Commitments. Any such reduction shall be in
an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Revolving Credit Commitments then in effect.
2.11 Optional Prepayments. The Borrower
--------------------
may at any time and from time to time prepay the Loans, in whole or in part,
without premium or penalty, upon irrevocable notice delivered to the
Administrative Agent at least three Business Days prior thereto in the case of
Eurodollar Loans and at least one Business Day prior thereto in the case of
Base Rate Loans, which notice shall specify the date and amount of prepayment
and whether the prepayment is of Eurodollar Loans or Base Rate Loans;
provided, that if a Eurodollar Loan is prepaid on any day other than the last
day of the Interest Period applicable thereto, the Borrower shall also pay any
amounts owing pursuant to Section 2.21. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Credit Loans which are Base Rate Loans and Swing Line Loans) accrued
interest to such date on the amount prepaid. Partial prepayments of Term
Loans and Revolving Credit Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof. Partial prepayments of Swing Line
Loans shall be in an aggregate principal amount of $100,000 or a whole
multiple thereof.
2.12 Mandatory Prepayments and Commitment Reductions.
--------------------------------------------------
(a) Unless the Required Prepayment Lenders shall otherwise agree, if after
the Closing Date any Capital Stock shall be issued by Holdings, the
Borrower or any of its Subsidiaries, or Indebtedness incurred by the Borrower
or any of its Subsidiaries (excluding any Indebtedness incurred in accordance
with Section 7.2 as in effect on the date of this Agreement), an amount
equal to (i) 50%, in the case of such Capital Stock and (ii) 100%, in the case
of such Indebtedness, of the Net Cash Proceeds thereof shall be applied on the
date of such issuance or incurrence toward the prepayment of the Term Loans
and the reduction of the Revolving Credit Commitments as set forth in
Section 2.12(d).
(b) Unless the Required Prepayment Lenders shall otherwise agree,
if on any date the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds in an amount greater than or equal to $1,000,000 from any Asset Sale
or Recovery Event then such Net Cash Proceeds shall be applied on such date
toward the prepayment of the Term Loans and the reduction of the Revolving
Credit Commitments as set forth in Section 2.12(d); provided, that,
--------
notwithstanding the foregoing, Net Cash Proceeds not exceeding $2,750,000 in
the aggregate relating to the closure and consolidation referred to in the
Confidential Information Memorandum of certain of the facilities of the
Borrower and its Subsidiaries shall not be required to be applied toward the
repayment of the Term Loans and the reduction of the Revolving Credit
Commitments; provided, further, that, notwithstanding the foregoing, the first
-------- -------
$1,000,000 of Net Cash Proceeds received by the Borrower and its Subsidiaries
since the Closing Date otherwise required to be so applied shall not be
required to be applied toward the repayment of the Term Loans and the
reduction of the Revolving Credit Commitments.
(c) Unless the Required Prepayment Lenders shall otherwise agree,
if, for any fiscal year of the Borrower commencing with the fiscal year ending
March 31, 1999, there shall be Excess Cash Flow, the Borrower shall, on the
relevant Excess Cash Flow Application Date, apply the ECF Percentage of such
Excess Cash Flow toward the prepayment of the Term Loans and the reduction of
the Revolving Credit Commitments as set forth in Section 2.12(d). Each such
prepayment and commitment reduction shall be made on a date (an "Excess Cash
-----------
Flow Application Date") no later than five Business Days after the earlier of
---------------------
(i) the date on which the financial statements of the Borrower referred to in
Section 6.1(a), for the fiscal year with respect to which such prepayment is
made, are required to be delivered to the Lenders and (ii) the date such
financial statements are actually delivered.
(d) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to Section 2.12(a), (b) and (c) shall be
applied, first, to the prepayment of the Term Loans and, second, to reduce
----- ------
permanently the Revolving Credit Commitments. Any such reduction of the
Revolving Credit Commitments shall be accompanied by prepayment of the
Revolving Credit Loans and/or Swing Line Loans to the extent, if any, that the
Total Revolving Extensions of Credit exceed the amount of the Total Revolving
Credit Commitments as so reduced, provided that if the aggregate principal
--------
amount of Revolving Credit Loans and Swing Line Loans then outstanding is less
than the amount of such excess (because L/C Obligations constitute a portion
thereof), the Borrower shall, to the extent of the balance of such excess,
replace outstanding Letters of Credit and/or deposit an amount in cash in a
Cash Collateral Account. The application of any prepayment pursuant to
Section 2.12 shall be made first to Base Rate Loans and second to Eurodollar
Loans. Each prepayment of the Loans under Section 2.12 (except in the case of
Revolving Credit Loans that are Base Rate Loans and Swing Line Loans) shall be
accompanied by accrued interest and fees, if any, to the date of such
prepayment on the amount prepaid.
(e) If, at any time, the Total Revolving Extensions of Credit at
such time exceed the Borrowing Base at such time, the Borrower shall, without
notice or demand, immediately repay Swing Line Loans then outstanding and/or,
after the Swing Line Loans have been paid in full, Revolving Loans in an
aggregate principal amount equal to the lesser of (i) the amount of such
excess and (ii) the aggregate principal amount of Swing Line Loans and
Revolving Loans then outstanding, together with interest accrued to the date
of such payment or prepayment on the principal so prepaid and any amounts
payable under Section 2.21 in connection therewith. To the extent that after
giving effect to any prepayment of Swing Line Loans and Revolving Loans
required by the preceding sentence, the Total Revolving Extensions of Credit
at such time exceed the Borrowing Base at such time, the Borrower shall,
without notice or demand, immediately deposit in a Cash Collateral Account
upon terms reasonably satisfactory to the Administrative Agent an amount equal
to the lesser of (i) the aggregate then outstanding L/C Obligations and (ii)
the amount of such remaining excess. The Administrative Agent shall apply any
cash deposited in the Cash Collateral Account (to the extent thereof) to pay
any Reimbursement Obligations which become due thereafter, provided that the
--------
Administrative Agent shall release to the Borrower from time to time such
portion of the amount on deposit in the Cash Collateral Account which is equal
to the amount by which the Borrowing Base at such time plus the amount on
deposit in the Cash Collateral Account exceeds the Total Revolving Extensions
of Credit at such time. "Cash Collateral Account" means an account
-------------------------
established by the Borrower with the Administrative Agent for the benefit of
the Lenders and on terms or conditions satisfactory to the Administrative
Agent and over which the Administrative Agent shall have been granted a first
priority Lien and the right of withdrawal for application in accordance with
this Section 2.12(e).
2.13 Conversion and Continuation Options.
--------------------------------------
(a) The Borrower may elect from time to time to convert
Eurodollar Loans to Base Rate Loans by giving the Administrative Agent at
least two Business Days' prior irrevocable notice of such election, provided
--------
that any such conversion of Eurodollar Loans may only be made on the last day
of an Interest Period with respect thereto. The Borrower may elect from time
to time to convert Base Rate Loans to Eurodollar Loans by giving the
Administrative Agent at least three Business Days' prior irrevocable notice of
such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no Base Rate Loan under a particular Facility
--------
may be converted into a Eurodollar Loan (i) when any Event of Default has
occurred and is continuing and the Administrative Agent or the Majority
Facility Lenders in respect of such Facility have determined in its or their
sole discretion not to permit such conversions or (ii) after the date that is
one month prior to the final scheduled termination or maturity date of such
Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to
such Loans, provided that no Eurodollar Loan under a particular Facility may
--------
be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Majority Facility Lenders
in respect of such Facility have determined in its or their sole discretion
not to permit such continuations or (ii) after the date that is one month
prior to the final scheduled termination or maturity date of such Facility,
and provided, further, that if the Borrower shall fail to give any required
-------- -------
notice as described above in this paragraph or if such continuation is not
permitted pursuant to the preceding proviso such Loans shall be automatically
converted to Base Rate Loans on the last day of such then expiring Interest
Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches.
-----------------------------------------------------------
Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions,
continuations and optional prepayments of Eurodollar Loans hereunder and all
selections of Interest Periods hereunder shall be in such amounts and be made
pursuant to such elections so that, (a) after giving effect thereto, the
aggregate principal amount of the Eurodollar Loans comprising each Eurodollar
Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in
excess thereof and (b) no more than twelve Eurodollar Tranches shall be
outstanding at any one time.
2.15 Interest Rates and Payment Dates.
---------------------------------
(a) Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the
Eurodollar Rate determined for such day plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at a
rate per annum which is equal to (x) in the case of the Loans, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section 2.15 plus 2% or (y) in the case of Reimbursement Obligations, the
----
rate applicable to Base Rate Loans under the Revolving Credit Facility plus
----
2%, and (ii) if all or a portion of any interest payable on any Loan or
Reimbursement Obligation or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate applicable to Base Rate Loans under the relevant
Facility plus 2% (or, in the case of any such other amounts that do not relate
----
to a particular Facility, the Base Rate plus 4%), in each case, with respect
----
to clauses (i) and (ii) above, from the date of such non-payment until such
amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this
--------
Section 2.15 shall be payable from time to time on demand.
2.16 Computation of Interest and Fees.
--------------------------------
(a) Interest, fees and commissions payable pursuant hereto shall be
calculated on the basis of a 360-day year for the actual days elapsed, except
that, with respect to Base Rate Loans the rate of interest on which is
calculated on the basis of the Prime Rate, the interest thereon shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting
from a change in the Base Rate or the Eurocurrency Reserve Requirements shall
become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall as soon as practicable
notify the Borrower and the relevant Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations and calculations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.15(a).
2.17 Inability to Determine Interest Rate.
-------------------------------------
If prior to the first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Interest
Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period will
not adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans
during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be made as
Base Rate Loans, (y) any Loans under the relevant Facility that were to have
been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans
under the relevant Facility shall be converted, on the first day of such
Interest Period, to Base Rate Loans. Until such notice has been withdrawn by
the Administrative Agent, no further Eurodollar Loans under the relevant
Facility shall be made or continued as such, nor shall the Borrower have the
right to convert Loans under the relevant Facility to Eurodollar Loans.
2.18 Pro Rata Treatment and Payments.
-----------------------------------
(a) Each borrowing by the Borrower from the Lenders hereunder,
each payment by the Borrower on account of any commitment fee and any
reduction of the Commitments of the Lenders shall be made pro rata according
--- ----
to the respective Tranche A Term Loan Percentages, Tranche B Term Loan
Percentages or Revolving Credit Percentages, as the case may be, of the
relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Tranche A Term Loans or the
Tranche B Term Loans, as the case may be, shall be made pro rata according to
--- ----
the respective outstanding principal amounts of the Tranche A Term Loans or
the Tranche B Term Loans, as the case may be, then held by the Term Loan
Lenders (except as otherwise provided in Section 2.18(d) or in the last
sentence of this Section 2.18(b)). The amount of each principal prepayment of
the Term Loans shall be applied pro rata to the Tranche A Term Loans and the
--- ----
Tranche B Term Loans and to reduce the then remaining installments thereof, as
the case may be, pro rata based upon the then remaining principal amount
--- ----
thereof (except as provided in the last sentence of this Section 2.18(b)).
Amounts prepaid on account of the Term Loans may not be reborrowed.
Notwithstanding anything to the contrary in this Section 2.18(b), at the
option of the Borrower prepayments by the Borrower on account of principal of
and interest on the Term Loans may be applied to reduce the remaining
installments of the Tranche A Term Loans and Tranche B Term Loans, as the case
may be, first, in the order of their scheduled maturities with respect to
-----
those installments due within the next four succeeding fiscal quarters of the
Borrower and second, pro rata based upon the then remaining principal amount
------ --- ----
thereof.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of the
--- ----
Revolving Credit Loans then held by the Revolving Credit Lenders.
(d) Notwithstanding anything to the contrary in Sections 2.11, 2.12
or 2.18, so long as any Tranche A Term Loans are outstanding, each Tranche B
Term Loan Lender may, at its option, decline any optional prepayment or
mandatory payment applicable to the Tranche B Term Loans of such Lender;
accordingly, with respect to the amount of any optional prepayment described
in Section 2.11 or mandatory prepayment described in Section 2.12 that is
allocated to Tranche B Term Loans (such amounts, the "Tranche B Prepayment
--------------------
Amount"), at any time when Tranche A Term Loans remain outstanding, the
------
Borrower will, (i) in the case of any optional prepayment which the Borrower
wishes to make, not later than five Business Days prior to the date on which
the Borrower wishes to make such optional prepayment, and (ii) in the case of
any mandatory prepayment required to be made pursuant to Section 2.12, in lieu
of applying such amount to the prepayment of Tranche B Term Loans as provided
in paragraph Section 2.12(d), on the date specified in Section 2.12 for such
prepayment, give the Administrative Agent telephonic notice (promptly
confirmed in writing) requesting that the Administrative Agent prepare and
provide to each Tranche B Lender a notice (each, a "Prepayment Option Notice")
------------------------
as described below. As promptly as practicable after receiving such notice
from the Borrower, the Administrative Agent will send to each Tranche B Lender
a Prepayment Option Notice, which shall be in the form of Exhibit H, and shall
include an offer by the Borrower to prepay on the date (each a "Prepayment
----------
Date") that is a date selected by the Administrative Agent, the relevant
----
Tranche B Term Loans of such Lender by an amount equal to the portion of the
Prepayment Amount indicated in such Lender's Prepayment Option Notice as being
applicable to such Lender's Tranche B Term Loans. On the Prepayment Date, (i)
the Borrower shall pay to the Administrative Agent the aggregate amount
necessary to prepay that portion of the outstanding relevant Tranche B Term
Loans in respect of which Tranche B Lenders have accepted prepayment as
described above (such Lenders, the "Accepting Lenders"), and such amount shall
-----------------
be applied to reduce the Tranche B Repayment Amounts with respect to each
Accepting Lender and (ii) the Borrower shall pay to the Administrative Agent
an amount equal to the portion of the Tranche B Prepayment Amount not accepted
by the Accepting Lenders, and such amount shall be applied to the prepayment
of the remaining Tranche A Term Loans.
(e) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for
the account of the Lenders, at the Payment Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If
any payment hereunder (other than payments on the Eurodollar Loans) becomes
due and payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the
result of such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately preceding
Business Day. In the case of any extension of any payment of principal
pursuant to the preceding two sentences, interest thereon shall be payable at
the then applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available
to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this Section
2.18(f) shall be conclusive in the absence of manifest error. If such
Lender's share of such borrowing is not made available to the Administrative
Agent by such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to Base Rate Loans under the
relevant Facility, on demand, from the Borrower.
(g) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata
--- ----
shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the Borrower within three Business Days of such
required date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
2.19 Requirements of Law. (a) If the
-------------------
adoption of or any change in any Requirement of Law or in the interpretation
or application thereof or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application or any
Eurodollar Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Non-Excluded Taxes covered by
Section 2.20 and changes in the rate of tax on the overall net income of such
Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination of
the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating
in Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender
for such increased cost or reduced amount receivable. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.19, it
shall promptly notify the Borrower (with a copy to the Administrative Agent)
of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the
effect of reducing the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder or under or in respect
of any Letter of Credit to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction.
(c) A certificate as to any additional amounts payable pursuant to
this Section 2.19 submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section 2.19 shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
2.20 Taxes. (a) All payments made by the Borrower under
-----
this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Administrative Agent or
any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
Administrative Agent or such Lender having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement or
any other Loan Document). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") or
------------------
Other Taxes are required to be withheld from any amounts payable to the
Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement,
provided, however, that the Borrower shall not be required to increase any
-------- -------
such amounts payable to any Lender with respect to any Non-Excluded Taxes (i)
that are attributable to such Lender's failure to comply with the requirements
of paragraph (d) or (e) of this Section 2.20 or (ii) that are United States
withholding taxes imposed on amounts payable to such Lender at the time the
Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to Section 2.20(a).
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for the account of the Administrative Agent or
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to
pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts
or other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as
a result of any such failure. The agreements in this Section 2.20 shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a citizen or resident
of the United States of America, a corporation, partnership or other entity
created or organized in or under the laws of the United States of America (or
any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "Non-U.S. Lender")
---------------
shall deliver to the Borrower and the Administrative Agent (or, in the case of
a Participant, to the Lender from which the related participation shall have
been purchased) two copies of either U.S. Internal Revenue Service Form 1001
or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption from
U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of "portfolio interest" a statement substantially in the
form of Exhibit I and a Form W-8, or any subsequent versions thereof or
successors thereto properly completed and duly executed by such Non-U.S.
Lender claiming complete exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments by the Borrower under this Agreement and the
other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender
on or before the date it becomes a party to this Agreement (or, in the case of
any Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered
by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the
Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other
form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this Section 2.20(d), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.20(d) that such Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly
completed and executed documentation prescribed by applicable law as will
permit such payments to be made without withholding or at a reduced rate,
provided that such Lender is legally entitled to complete, execute and deliver
--------
such documentation and in such Lender's reasonable judgment such completion,
execution or submission would not materially prejudice the legal position of
such Lender.
2.21 Indemnity. The Borrower agrees to indemnify each
---------
Lender and to hold each Lender harmless from any loss or expense which such
Lender may sustain or incur as a consequence of (a) default by the Borrower in
making a borrowing of, conversion into or continuation of Eurodollar Loans
after the Borrower has given a notice requesting the same in accordance with
the provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with
the provisions of this Agreement or (c) the making of a prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced
on the date of such failure) in each case at the applicable rate of interest
for such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
----
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. A certificate as to any amounts
payable pursuant to this Section 2.21 submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.22 Illegality. Notwithstanding any other provision
----------
herein, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be cancelled and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect
to such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section
2.21.
2.23 Change of Lending Office. Each
------------------------
Lender agrees that, upon the occurrence of any event giving rise to the
operation of Section 2.19 or 2.20(a) with respect to such Lender, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any
Loans affected by such event with the object of avoiding the consequences of
such event; provided, that such designation is made on terms that, in the sole
--------
judgment of such Lender, cause such Lender and its lending office(s) to suffer
no economic, legal or regulatory disadvantage, and provided, further, that
-------- -------
nothing in this Section 2.23 shall affect or postpone any of the obligations
of any Borrower or the rights of any Lender pursuant to Section 2.19 or
2.20(a).
2.24 Replacement of Lenders under Certain Circumstances.
--------------------------------------------------
The Borrower shall be permitted to
replace any Lender which (a) requests reimbursement for amounts owing pursuant
to Section 2.19 or 2.20 or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; provided that (i) such
--------
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) prior to any such replacement, such Lender shall have taken no action
under Section 2.22 so as to eliminate the continued need for payment of
amounts owing pursuant to Section 2.19 or 2.20, (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrower shall
be liable to such replaced Lender under Section 2.21 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (vii) the replaced Lender shall be obligated to make
such replacement in accordance with the provisions of Section 10.6 (provided
that the Borrower shall be obligated to pay the registration and processing
fee referred to therein), (viii) until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts (if any) required
pursuant to Section 2.19 or 2.20, as the case may be, and (ix) any such
replacement shall not be deemed to be a waiver of any rights which the
Borrower, the Administrative Agent or any other Lender shall have against the
replaced Lender.
2.25 Security Documents. The Loans and all
------------------
other Obligations shall be secured by the Collateral described in the Security
Documents and are entitled to the benefits thereof. The Borrower and the
Guarantors shall duly execute and deliver the Security Documents, all consents
of third parties necessary to permit the effective granting of the Liens
created thereby, financing statements pursuant to the Uniform Commercial Code
and other documents, all in Proper Form, as may be reasonably required by the
Administrative Agent to grant to the Administrative Agent, for the ratable
benefit of the Lenders, a valid, perfected and enforceable first priority Lien
on and security interest in the Collateral (subject only to the Liens
permitted under Section 7.3).
2.26 Filing and Recording. The Borrower
--------------------
shall, at its sole cost and expense, cause all financing statements and other
Security Documents pursuant to this Agreement to be duly recorded and/or filed
or otherwise perfected in all places necessary, in the opinion of the
Administrative Agent, and take such other actions as the Administrative Agent
may reasonably request, in order to perfect and protect the Liens of the
Administrative Agent, for the ratable benefit of the Lenders, in the
Collateral. The Borrower, to the extent permitted by law, hereby authorizes
the Administrative Agent to file any financing statement in respect of any
Lien created pursuant to the Security Documents which may at any time be
required or which, in the opinion of the Administrative Agent, may at any time
be desirable, although the same may have been executed only by the
Administrative Agent or, at the option of the Administrative Agent, to sign
such financing statement on behalf of the Borrower and the Guarantors and file
the same, and the Borrower hereby irrevocably designates the Administrative
Agent, its agents, representatives and designees as its agent and
attorney-in-fact for this purpose. In the event that any re-recording or
refiling thereof (or the filing of any statements of continuation or
assignment of any financing statement) is required to protect and preserve
such Lien, the Borrower shall, at the Borrower's cost and expense, cause the
same to be recorded and/or refiled at the time and in the manner requested by
the Administrative Agent.
3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and
--------------
conditions hereof, the Issuing Lender, in reliance on the agreements of the
other Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue
letters of credit ("Letters of Credit") for the account of the Borrower on any
-----------------
Business Day during the Revolving Credit Commitment Period in such form as may
be approved from time to time by the Issuing Lender; provided that the Issuing
--------
Lender shall have no obligation to issue any Letter of Credit if, after giving
effect to such issuance, (i) the L/C Obligations would exceed the L/C
Commitment, (ii) the aggregate amount of the Available Revolving Credit
Commitments would be less than zero or (iii) the Total Revolving Extensions of
Credit at such time would exceed the Borrowing Base at such time. Each Letter
of Credit shall (i) be denominated in Dollars and (ii) expire no later than
the earlier of (x) the first anniversary of its date of issuance and (y) the
date which is five Business Days prior to the Scheduled Revolving Credit
Termination Date, provided that any Letter of Credit with a one-year term may
--------
provide for the renewal thereof for additional one-year periods (which shall
in no event extend beyond the date referred to in clause (y) above).
(b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(c) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit.
-----------------------------------------------
The Borrower may from time to time request that
the Issuing Lender issue a Letter of Credit by delivering to the Issuing
Lender at its address for notices specified herein an Application therefor,
completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may request. Upon receipt of any Application, the Issuing Lender will process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such
Letter of Credit to the beneficiary thereof or as otherwise may be agreed to
by the Issuing Lender and the Borrower. The Issuing Lender shall furnish a
copy of such Letter of Credit to the Borrower promptly following the issuance
thereof. The Issuing Lender shall promptly furnish to the Administrative
Agent, which shall in turn promptly furnish to the Lenders, notice of the
issuance of each Letter of Credit (including the amount thereof).
3.3 Commissions, Fees and Other Charges.
-----------------------------------
(a) The Borrower will pay a commission on all outstanding Letters
of Credit at a per annum rate equal to the Applicable Margin then in effect
with respect to Eurodollar Loans under the Revolving Credit Facility, shared
ratably among the Revolving Credit Lenders and payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date. In addition, the Borrower
shall pay to the Issuing Lender for its own account a fronting fee of 1/4 of
1% per annum, payable quarterly in arrears on each L/C Fee Payment Date after
the Issuance Date.
(b) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender
------------------
irrevocably agrees to grant and hereby grants to each L/C Participant, and, to
induce the Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuing Lender, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's Revolving Credit Percentage in the Issuing
Lender's obligations and rights under each Letter of Credit issued hereunder
and the amount of each draft paid by the Issuing Lender thereunder. Each L/C
Participant unconditionally and irrevocably agrees with the Issuing Lender
that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not reimbursed in full by the Borrower in accordance with the terms
of this Agreement, such L/C Participant shall pay to the Issuing Lender upon
demand at the Issuing Lender's address for notices specified herein an amount
equal to such L/C Participant's Revolving Credit Percentage of the amount of
such draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit
is paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily
average Federal Funds Effective Rate during the period from and including the
date such payment is required to the date on which such payment is immediately
available to the Issuing Lender, times (iii) a fraction the numerator of which
is the number of days that elapse during such period and the denominator of
which is 360. If any such amount required to be paid by any L/C Participant
pursuant to Section 3.4(a) is not made available to the Issuing Lender by such
L/C Participant within three Business Days after the date such payment is due,
the Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to Base Rate Loans under the Revolving Credit
Facility. A certificate of the Issuing Lender submitted to any L/C
Participant with respect to any amounts owing under this Section shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
---
rata share of such payment in accordance with Section 3.4(a), the Issuing
----
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied
thereto by the Issuing Lender), or any payment of interest on account thereof,
the Issuing Lender will distribute to such L/C Participant its pro rata share
--- ----
thereof; provided, however, that in the event that any such payment received
-------- -------
by the Issuing Lender shall be required to be returned by the Issuing Lender,
such L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower.
--------------------------------------------
The Borrower agrees to reimburse the Issuing
Lender on each date on which the Issuing Lender notifies the Borrower of the
date and amount of a draft presented under any Letter of Credit and paid by
the Issuing Lender for the amount of (a) such draft so paid and (b) any taxes,
and any reasonable fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. Each such payment shall be
made to the Issuing Lender at its address for notices specified herein in
lawful money of the United States of America and in immediately available
funds. Interest shall be payable on any and all amounts remaining unpaid by
the Borrower under this Section from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in
full at the rate set forth in Section 2.15(c). Each drawing under any Letter
of Credit shall (unless an event of the type described in clause (i) or (ii)
of Section 8(f) shall have occurred and be continuing with respect to the
Borrower, in which case the procedures specified in Section 3.4 for funding by
L/C Participants shall apply) constitute a request by the Borrower to the
Administrative Agent for a borrowing pursuant to Section 2.5 of Base Rate
Loans (or, at the option of the Administrative Agent and the Swing Line Lender
in their sole discretion, a borrowing pursuant to Section 2.7 of Swing Line
Loans) in the amount of such drawing. The Borrowing Date with respect to such
borrowing shall be the date of such drawing.
3.6 Obligations Absolute. The Borrower's
--------------------
obligations under this Section 3 shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or defense
to payment which the Borrower may have or have had against the Issuing Lender,
any beneficiary of a Letter of Credit or any other Person. The Borrower also
agrees with the Issuing Lender that the Issuing Lender shall not be
responsible for, and the Borrower's Reimbursement Obligations under Section
3.5 shall not be affected by, among other things, the validity or genuineness
of documents or of any endorsements thereon, even though such documents shall
in fact prove to be invalid, fraudulent or forged, or any dispute between or
among the Borrower and any beneficiary of any Letter of Credit or any other
party to which such Letter of Credit may be transferred or any claims
whatsoever of the Borrower against any beneficiary of such Letter of Credit or
any such transferee. The Issuing Lender shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Issuing Lender. The Borrower agrees
that any action taken or omitted by the Issuing Lender under or in connection
with any Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct and in accordance with the
standards or care specified in the Uniform Commercial Code of the State of New
York, shall be binding on the Borrower and shall not result in any liability
of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any
-------------------------
draft shall be presented for payment under any Letter of Credit, the Issuing
Lender shall promptly notify the Borrower of the date and amount thereof. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to
any payment obligation expressly provided for in such Letter of Credit, be
limited to determining that the documents (including each draft) delivered
under such Letter of Credit in connection with such presentment are
substantially in conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of
------------
any Application related to any Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent, the Issuing Lender, the Swing
Line Lender and the Lenders to enter into this Agreement and to make the Loans
and issue or participate in the Letters of Credit, Holdings and the Borrower
hereby jointly and severally represent and warrant to the Administrative
Agent, the Issuing Lender, the Swing Line Lender and each Lender that:
4.1 Financial Condition. (a) The
--------------------
unaudited pro forma consolidated balance sheet of the Borrower and its
--- -----
consolidated Subsidiaries as at September 30, 1997 (including the notes
thereto) (the "Pro Forma Balance Sheet"), copies of which have heretofore been
-----------------------
furnished to each Lender, has been prepared giving effect (as if such events
had occurred on such date) to (i) the consummation of the Acquisition, (ii)
the Loans to be made on the Closing Date and the use of proceeds thereof and
(iii) the payment of fees and expenses in connection with the foregoing. The
Pro Forma Balance Sheet has been prepared based on the best information
available to the Borrower as of the date of delivery thereof, and presents
fairly on a pro forma basis the estimated financial position of Borrower and
--- -----
its consolidated Subsidiaries as at September 30, 1997, assuming that the
events specified in the preceding sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as at March 31, 1997, March 29, 1996 and March 31,
1995, and the related consolidated statements of income and of cash flows for
the fiscal years ended on such dates, reported on by and accompanied by an
unqualified report from Ernst & Young LLP, present fairly the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at
such date, and the consolidated results of its operations and its consolidated
cash flows for the respective fiscal years then ended. The unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries
as at December 31, 1997, and the related unaudited consolidated statements of
income and cash flows for the nine-month period ended on such date, present
fairly the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidated results of its
operations and its consolidated cash flows for the nine-month period then
ended (subject to normal year-end audit adjustments). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by the aforementioned firm of accountants and
disclosed therein). Holdings, the Borrower and its Subsidiaries do not have
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, which are
not reflected in the most recent financial statements referred to in this
paragraph (b). During the period from March 31, 1997 to and including the
date hereof there has been no Disposition by the Borrower and its consolidated
Subsidiaries of any material part of its business or Property.
(c) The audited consolidated balance sheets of the Target and its
consolidated Subsidiaries as at December 31, 1996 and December 31, 1995, and
the related consolidated statements of income and of cash flows for the fiscal
years ended on such dates, reported on by and accompanied by an unqualified
report from Deloitte & Touche LLP, present fairly the consolidated financial
condition of the Target and its consolidated Subsidiaries as at such date, and
the consolidated results of its operations and its consolidated cash flows for
the respective fiscal years then ended. The unaudited consolidated balance
sheet of the Target and its consolidated Subsidiaries as at October 31, 1997,
and the related unaudited consolidated statements of income and cash flows for
the ten-month period ended on such date, present fairly the consolidated
financial condition of the Target and its consolidated Subsidiaries as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the Target-month period then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein and with respect to
the unaudited statements, except for the absence of footnote disclosure, prior
period comparative data and other presentation items that are required by GAAP
and except as set forth on Schedule 4.1(c). The Target and its Subsidiaries
do not have any material Guarantee Obligations, contingent liabilities and
liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including, without limitation, any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, which are not reflected in the most recent financial statements
referred to in this paragraph (c). During the period from December 31, 1996
to and including the date hereof there has been no Disposition by the Target
and its consolidated Subsidiaries of any material part of its business or
Property.
4.2 No Change. Since September 30, 1997 there has been
---------
no event, development or circumstance which has had or could reasonably be
expected to have a Material Adverse Effect.
4.3 Corporate Existence; Compliance with Law.
----------------------------------------
Each of Holdings, the Borrower and its Subsidiaries (a)
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate power and authority,
and the legal right, to own and operate its Property, to lease the Property it
operates as lessee and to conduct the business in which it is currently
engaged, (c) is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
Property or the conduct of its business requires such qualification except to
the extent that the failure be so qualified and in good standing could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect and
(d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
-----------------------------------------------------------
Each Loan Party has
the corporate power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and, in the case of the
Borrower, to borrow hereunder. Each Loan Party has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Acquisition and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 4.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect and (ii)
the filings referred to in Section 4.19. Each Loan Document has been duly
executed and delivered on behalf of each Loan Party party thereto. This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party party
thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar; No Burdensome Restrictions.
--------------------------------------------
The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of Holdings, the Borrower or
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
4.6 No Material Litigation. No
------------------------
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of Holdings or the
Borrower, threatened by or against Holdings, the Borrower or any of its
Subsidiaries or against any of their respective properties or revenues (a)
with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.
4.7 No Default. Neither Holdings, the Borrower nor any
----------
of its Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred
and is continuing.
4.8 Ownership of Property; Liens.
----------------------------
Each of Holdings, the Borrower and its Subsidiaries has title in fee simple
to, or a valid leasehold interest in, all its real property, and good title
to, or a valid leasehold interest in, all its other Property, and none of such
Property is subject to any Lien except as permitted by Section 7.3.
4.9 Intellectual Property. Holdings, the
---------------------
Borrower and each of its Subsidiaries owns, or is licensed to use, all
Intellectual Property necessary for the conduct of its business as currently
conducted, all of which Intellectual Property is listed on Schedule 6 to the
Guarantee and Collateral Agreement. No claim has been asserted or threatened
or is pending by any Person challenging or questioning the use of any
Intellectual Property or the validity or effectiveness of any Intellectual
Property, except for claims the adverse determination of which could not
reasonably be expected to have a Material Adverse Effect, nor does Holdings or
Borrower know of any valid basis for any such claim. The use of Intellectual
Property by Holdings, the Borrower and its Subsidiaries does not infringe on
the rights of any Person in any material respect.
4.10 Taxes. Each of Holdings, the Borrower and each of its
-----
Subsidiaries (other than any Dormant Subsidiary) has filed or caused to be
filed all Federal, state and other material tax returns which are required to
be filed and has paid all taxes shown to be due and payable on said returns or
on any assessments made against it or any of its Property and all other taxes,
fees or other charges imposed on it or any of its Property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of Holdings,
the Borrower or its Subsidiaries, as the case may be); no tax Lien has been
filed, and, to the knowledge of Holdings and the Borrower, no claim is being
asserted, with respect to any such tax, fee or other charge.
4.11 Federal Regulations. No part of the
-------------------
proceeds of any Loans will be used for "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation G or Regulation U as now and from time to time hereafter in effect
or for any purpose which violates the provisions of the Regulations of the
Board. If requested by any Lender or the Administrative Agent, the Borrower
will furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR Form
U-1 referred to in Regulation G or Regulation U, as the case may be.
4.12 Labor Matters. There are no strikes or other
-------------
labor disputes against Holdings, the Borrower or any of its Subsidiaries
pending or, to the knowledge of Holdings or the Borrower, threatened that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. Hours worked by and payment made to employees of
Holdings, the Borrower and its Subsidiaries have not been in violation of the
Fair Labor Standards Act or any other applicable Requirement of Law dealing
with such matters that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect. All payments due from Holdings,
the Borrower or any of its Subsidiaries on account of employee health and
welfare insurance that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect if not paid have been paid or
accrued as a liability on the books of Holdings, the Borrower or the relevant
Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated
-----
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan which has resulted or could reasonably be expected to
result in a material liability under ERISA, and neither the Borrower nor any
Commonly Controlled Entity would become subject to any material liability
under ERISA if the Borrower or any such Commonly Controlled Entity were to
withdraw completely from all Multiemployer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed
made. No such Multiemployer Plan is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations.
-----------------------------------------
No Loan Party is an "investment company", or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended. No Loan Party is subject to
regulation under any Requirement of Law (other than Regulation X of the Board)
which limits its ability to incur Indebtedness.
4.15 Subsidiaries. The Subsidiaries listed on
------------
Schedule 4.15 constitute all the Subsidiaries of the Borrower at the date
hereof. Except as expressly indicated on Schedule 4.15, each of the
Subsidiaries listed thereon is a Wholly Owned Subsidiary. Each of the Dormant
Subsidiaries listed on Schedule 4.15 does not currently conduct or maintain
any business operation and does not own assets having an aggregate value in
excess of the amount shown for such Dormant Subsidiary on Schedule 4.15.
4.16 Use of Proceeds. The proceeds of the Term
-----------------
Loans shall be used to finance a portion of the Acquisition and to pay related
fees and expenses. The proceeds of the Revolving Credit Loans and the Swing
Line Loans, and the Letters of Credit, shall be used to finance a portion of
the Acquisition, for general corporate purposes of the Borrower and its
Subsidiaries in the ordinary course of business and to finance Permitted
Acquisitions by the Borrower or any Subsidiary as permitted by Section 7.4.
4.17 Environmental Matters. Other than
----------------------
exceptions to any of the following that could not, individually or in the
aggregate, reasonably be expected to result in the payment of a Material
Environmental Amount:
(a) Holdings, the Borrower and its Subsidiaries: (i) are, and
within the period of all applicable statutes of limitation have been, in
compliance with all applicable Environmental Laws; (ii) hold all Environmental
Permits (each of which is in full force and effect) required for any of their
current or intended operations or for any property owned, leased, or otherwise
operated by any of them; (iii) are, and within the period of all applicable
statutes of limitation have been, in compliance with all of their
Environmental Permits; and (iv) reasonably believe that: each of their
Environmental Permits will be timely renewed and complied with, without
material expense; any additional Environmental Permits that may be required of
any of them will be timely obtained and complied with, without material
expense; and compliance with any Environmental Law that is or is expected to
become applicable to any of them will be timely attained and maintained,
without material expense.
(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or formerly owned, leased or
operated by Holdings, the Borrower or any of its Subsidiaries, or at any other
location (including, without limitation, any location to which Materials of
Environmental Concern have been sent for re-use or recycling or for treatment,
storage, or disposal) which could reasonably be expected to (i) give rise to
liability of Holdings, the Borrower or any of its Subsidiaries under any
applicable Environmental Law or otherwise result in costs to Holdings, the
Borrower or any of its Subsidiaries, or (ii) interfere with the continued
operations of Holdings, the Borrower or any of its Subsidiaries, or (iii)
impair the fair saleable value of any real property owned or leased by
Holdings, the Borrower or any of its Subsidiaries.
(c) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or relating to
any Environmental Law to which Holdings, the Borrower or any of its
Subsidiaries is, or to the knowledge of Holdings or the Borrower will be,
named as a party that is pending or, to the knowledge of Holdings or the
Borrower, threatened.
(d) Neither Holdings, the Borrower nor any of its Subsidiaries has
received any written request for information, or been notified that it is a
potentially responsible party under or relating to the federal Comprehensive
Environmental Response, Compensation, and Liability Act or any similar
Environmental Law, or with respect to any Materials of Environmental Concern.
(e) Neither Holdings, the Borrower nor any of its Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or other
agreement, nor is subject to any judgment, decree, or order or other
agreement, in any judicial, administrative, arbitral, or other forum, relating
to compliance with or liability under any Environmental Law.
(f) Neither Holdings, the Borrower nor any of its Subsidiaries has
assumed or retained, by contract or operation of law, any liabilities of any
kind, fixed or contingent, known or unknown, under any Environmental Law or
with respect to any Material of Environmental Concern.
4.18 Accuracy of Information, etc. No
----------------------------
statement or information contained in this Agreement, any other Loan Document,
the Confidential Information Memorandum or any other document, certificate or
statement furnished to the Administrative Agent or the Lenders or any of them,
by or on behalf of any Loan Party for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, contained as of
the date such statement, information, document or certificate was so furnished
(or, in the case of the Confidential Information Memorandum, as of the date of
this Agreement), any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. The projections and pro forma financial information
--- -----
contained in the materials referenced above are based upon good faith
estimates and assumptions believed by management of the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein
by a material amount. As of the date hereof, the representations and
warranties contained in the Acquisition Agreement are true and correct in all
material respects. There is no fact known to any Loan Party that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Confidential
Information Memorandum or in any other documents, certificates and statements
furnished to the Administrative Agent and the Lenders for use in connection
with the transactions contemplated hereby and by the other Loan Documents.
4.19 Security Documents. (a) The
-------------------
Guarantee and Collateral Agreement is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral described therein and proceeds
thereof. In the case of the Pledged Stock described in the Guarantee and
Collateral Agreement, when stock certificates representing such Pledged Stock
are delivered to the Administrative Agent, and in the case of the other
Collateral described in the Guarantee and Collateral Agreement, when financing
statements in appropriate form are filed in the offices specified on Schedule
4.19(a), the Guarantee and Collateral Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in
each case prior and superior in right to any other Person.
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
4.19(b), each such Mortgage shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Mortgaged Properties and the proceeds thereof, as security for the Obligations
(as defined in the relevant Mortgage), in each case prior and superior in
right to any other Person.
4.20 Solvency. Each Loan Party is, and after giving
--------
effect to the Acquisition and the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith will be and
will continue to be, Solvent.
4.21 Senior Indebtedness. The Obligations
-------------------
constitute "Senior Indebtedness" of the Borrower under and as defined in the
Senior Subordinated Note Indenture. The obligations of each Subsidiary
Guarantor under the Guarantee and Collateral Agreement constitute "Guarantor
Senior Indebtedness" of such Subsidiary Guarantor under and as defined in the
Senior Subordinated Note Indenture.
4.22 Regulation H. No Mortgage encumbers improved
------------
real property which is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available under the
National Flood Insurance Act of 1968.
4.23 Status of Receivables and Other Collateral.
-----------------------------------------------
(a) The Borrower or any Guarantor, as
applicable, is and shall be the sole owner, free and clear of all Liens except
in favor of the Administrative Agent or otherwise permitted under Section 7.2
hereunder, of and fully authorized to sell, transfer, pledge and/or grant a
security interest in each and every item of said Collateral owned by the
Borrower or any such Guarantor, (b) each Eligible Receivable is and shall be a
good and valid account representing an undisputed bona fide indebtedness
incurred or an amount indisputably owed by the account debtor therein named,
for a fixed sum as set forth in the invoice relating thereto with respect to
an absolute sale and delivery upon the specified terms of goods sold by the
Borrower or one or more of its Subsidiaries, or work, labor and/or services
theretofore rendered by the Borrower or the applicable Subsidiary; (c) no
Eligible Receivable is or shall be subject to any defense, offset,
counterclaim, discount or allowance (as of the time of its creation) except as
may be stated in the invoice relating thereto or discounts and allowances as
may be customary in the Borrower's or its applicable Subsidiary's business;
(d) none of the transactions underlying or giving rise to any Eligible
Receivable shall violate any applicable state or federal laws or regulations,
and all documents relating to any Receivable shall be legally sufficient under
such laws or regulations and shall be legally enforceable in accordance with
their terms, subject, as to enforceability, to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creators' rights generally; (e) to the best of the Borrower's knowledge, each
account debtor, guarantor or endorser with respect to any Eligible Receivable
is solvent and able to pay all Receivables on which it is obligated in full
when due; (f) all documents and agreements relating to Eligible Receivables
shall be true and correct and in all respects what they purport to be; (g) to
the best of the Borrower's knowledge, all signatures and endorsements that
appear on all documents and agreements relating to Eligible Receivables shall
be genuine and all signatories and endorsers with respect thereto shall have
full capacity to contract; (h) the Borrower and each its Subsidiaries shall
maintain books and records pertaining to the respective Collateral owned by
each of them in detail, form and scope as the Administrative Agent shall
reasonably require; (i) concurrently with the delivery by the Borrower to the
Administrative Agent of any accounts receivable aging or any sales report
summary hereunder, the Borrower will disclose to the Administrative Agent
which Receivables, if any, arise out of contracts with the United States or
any department, agency or instrumentality thereof, and will, upon request from
the Administrative Agent, execute or cause to be executed any instruments and
take any steps required by the Administrative Agent in order that all monies
due or to become due under any such contract shall be assigned to the
Administrative Agent and notice thereof given under the Federal Assignment of
Claims Act; (j) the Borrower will, promptly after any Responsible Officer
learns thereof, report to the Administrative Agent any material loss or
destruction of, or substantial damage to, any of the Collateral, and any other
matters materially affecting the value, enforceability or collectability of
any of the Collateral; (k) if any amount payable under or in connection with
any Receivable is evidenced by a promissory note or other instrument, as such
terms are defined in the Uniform Commercial Code, such promissory note or
instrument shall be promptly pledged, endorsed, assigned and delivered to the
Administrative Agent as additional Collateral; (l) the Borrower shall not
redate, or allow any of its Subsidiaries to redate, any invoice or sale or
make or allow to be made sales on extended dating beyond that customary in the
industry; (m) if any Default or Event of Default shall have occurred and be
continuing, the Borrower shall promptly provide the Administrative Agent with
copies of any regularly scheduled physical counts of the Borrower's and each
of its Subsidiaries' inventory which are conducted by the Borrower and such
Subsidiaries after the Closing Date; (n) after the occurrence and during the
continuation of any Default or Event of Default, the Borrower shall conduct a
physical count of its and each of its Subsidiaries' inventory at such
intervals as the Administrative Agent may request and promptly supply the
Administrative Agent with a copy of such counts accompanied by a report of the
value (based on the lower of cost, on a weighted average basis, or market
value) of such inventory; and (o) neither the Borrower, nor any of its
Subsidiaries, has pledged, shall pledge or shall be entitled to pledge the
Lenders' credit on any purchases or for any purpose whatsoever.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit.
-----------------------------------------
The agreement of each Lender to make the initial
extension of credit requested to be made by it is subject to the satisfaction,
prior to or concurrently with the making of such extension of credit on the
Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received
--------------
(i) this Agreement, executed and delivered by a duly authorized officer of
Holdings and the Borrower, (ii) the Guarantee and Collateral Agreement,
executed and delivered by a duly authorized officer of Holdings, the Borrower
and each Subsidiary Guarantor and (iii) a Mortgage covering each of the
Mortgaged Properties, executed and delivered by a duly authorized officer of
each party thereto.
(b) Acquisition, etc. The following transactions shall have been
----------------
consummated, in each case on terms and conditions reasonably satisfactory to
the Lenders:
(i) the Acquisition; and
(ii) Holdings shall have received at least
$5,000,000 in cash from the proceeds of equity issued by Holdings to its
existing shareholders and management of the Borrower and the Target and other
investors satisfactory to the Lenders, and such proceeds shall have been
contributed to the Borrower as additional common equity.
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders
-----------------------------------------------
shall have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of (A) the Borrower and its consolidated Subsidiaries and
(B) the Target and its consolidated Subsidiaries for the 1996 and 1995 fiscal
years and (iii) unaudited interim consolidated financial statements of (A) the
Borrower and its consolidated Subsidiaries and (B) the Target and its
consolidated Subsidiaries for each fiscal month and quarterly period ended
subsequent to the date of the latest applicable financial statements delivered
pursuant to clause (ii) of this paragraph as to which such financial
statements are available, and such financial statements shall not, in the
reasonable judgment of the Lenders, reflect any material adverse change in the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries, as reflected in the financial statements or projections
contained in the Confidential Information Memorandum.
(d) Approvals. All governmental and third party approvals
---------
(including landlords' and other consents) necessary or, in the discretion of
the Administrative Agent, advisable in connection with the Acquisition, the
continuing operations of Holdings, the Borrower and its Subsidiaries and the
transactions contemplated hereby shall have been obtained and be in full force
and effect, and all applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the Acquisition or
the financing contemplated hereby.
(e) Related Agreements. The Administrative Agent shall have
-------------------
received true and correct copies, certified as to authenticity by the
Borrower, of the Acquisition Agreement and such other documents or instruments
as may be reasonably requested by the Administrative Agent, including, without
limitation, a copy of the Senior Subordinated Note Indenture and any other
debt instrument, security agreement or other material contract to which the
Loan Parties may be a party.
(f) Termination of Existing Credit Facilities. The Administrative
-----------------------------------------
Agent shall have received evidence satisfactory to the Administrative Agent
that the Existing Credit Facilities shall be simultaneously terminated, all
amounts thereunder shall be simultaneously paid in full and arrangements
satisfactory to the Administrative Agent shall have been made for the
termination of Liens and security interests granted in connection therewith.
(g) Fees. The Lenders and the Administrative Agent shall have
----
received all fees required to be paid, and all expenses for which invoices
have been presented, on or before the Closing Date.
(h) Projections. The Lenders shall have received satisfactory
-----------
projections for fiscal years 1998-2004.
(i) Solvency Opinion. The Administrative Agent shall have received
----------------
a reasonably satisfactory solvency opinion from Houlihan, Lokey, Xxxxxx &
Xxxxx which shall document the solvency of the Borrower and its Subsidiaries
considered as a whole after giving effect to the transactions contemplated
hereby.
(j) Lien Searches. The Administrative Agent shall have received
--------------
the results of a recent lien search in each of the jurisdictions where assets
of the Target or its Subsidiaries are located, and such search shall reveal no
liens on any of the assets of the Target or its Subsidiaries except for liens
permitted by Section 7.3.
(k) Environmental Assessment. The Administrative Agent shall have
------------------------
received an environmental assessment with respect to the Target and its
Subsidiaries in form, scope and substance satisfactory to the Administrative
Agent.
(l) Expenses. The Administrative Agent shall have received
--------
satisfactory evidence that the fees and expenses to be incurred in connection
with the Acquisition and the financing thereof shall not exceed $5,000,000.
(m) Closing Certificate. The Administrative Agent shall have
--------------------
received a certificate of each Loan Party, dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments.
(n) Legal Opinions. The Administrative Agent shall have received
--------------
the following executed legal opinions:
(i) the legal opinion of Xxxxx, Xxxx & Xxxxxxx,
counsel to Holdings, the Borrower and its Subsidiaries, substantially in the
form of Exhibit F;
(ii) to the extent consented to by the relevant
counsel, each legal opinion, if any, delivered in connection with the
Acquisition Agreement, accompanied by a reliance letter in favor of the
Lenders; and
(iii) the legal opinion of local counsel in each of
Georgia, Michigan, North Carolina and Tennessee and of such other special and
local counsel as may be required by the Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(o) Pledged Stock; Stock Powers; Pledged Notes. The Administrative
------------------------------------------
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof and (ii) each
promissory note pledged to the Administrative Agent pursuant to the Guarantee
and Collateral Agreement endorsed in blank (or accompanied by an executed
transfer form in blank satisfactory to the Administrative Agent) by the
pledgor thereof.
(p) Filings, Registrations and Recordings. Each document
----------------------------------------
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded in
order to create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for filing,
registration or recordation.
(q) Title Insurance; Flood Insurance. (i) If requested by the
-----------------------------------
Administrative Agent, the Administrative Agent shall have received, and the
title insurance company issuing the policy referred to in clause (ii) below
(the "Title Insurance Company") shall have received, maps or plats of an
-------------------------
as-built survey of the sites of the Mortgaged Properties certified to the
Administrative Agent and the Title Insurance Company in a manner satisfactory
to them, dated a date satisfactory to the Administrative Agent and the Title
Insurance Company by an independent professional licensed land surveyor
satisfactory to the Administrative Agent and the Title Insurance Company,
which maps or plats and the surveys on which they are based shall be made in
accordance with the Minimum Standard Detail Requirements for Land Title
Surveys jointly established and adopted by the American Land Title Association
and the American Congress on Surveying and Mapping in 1992, and, without
limiting the generality of the foregoing, there shall be surveyed and shown on
such maps, plats or surveys the following: (A) the locations on such sites of
all the buildings, structures and other improvements and the established
building setback lines; (B) the lines of streets abutting the sites and width
thereof; (C) all access and other easements appurtenant to the sites; (D) all
roadways, paths, driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the site, whether recorded,
apparent from a physical inspection of the sites or otherwise known to the
surveyor; (E) any encroachments on any adjoining property by the building
structures and improvements on the sites; (F) if the site is described as
being on a filed map, a legend relating the survey to said map; and (G) the
flood zone designations, if any, in which the Mortgaged Properties are
located.
(ii) The Administrative Agent shall have received in respect of
each Mortgaged Property a mortgagee's title insurance policy (or policies) or
marked up unconditional binder for such insurance. Each such policy shall (A)
be in an amount satisfactory to the Administrative Agent; (B) be issued at
ordinary rates; (C) insure that the Mortgage insured thereby creates a valid
first Lien on such Mortgaged Property free and clear of all defects and
encumbrances, except as disclosed therein; (D) name the Administrative Agent
for the benefit of the Lenders as the insured thereunder; (E) be in the form
of ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or equivalent
policies); (F) contain such endorsements and affirmative coverage as the
Administrative Agent may reasonably request and (G) be issued by title
companies satisfactory to the Administrative Agent (including any such title
companies acting as co-insurers or reinsurers, at the option of the
Administrative Agent). The Administrative Agent shall have received evidence
satisfactory to it that all premiums in respect of each such policy, all
charges for mortgage recording tax, and all related expenses, if any, have
been paid.
(iii) If requested by the Administrative Agent, the Administrative
Agent shall have received (A) a policy of flood insurance which (1) covers any
parcel of improved real property which is encumbered by any Mortgage (2) is
written in an amount not less than the outstanding principal amount of the
indebtedness secured by such Mortgage which is reasonably allocable to such
real property or the maximum limit of coverage made available with respect to
the particular type of property under the National Flood Insurance Act of
1968, whichever is less, and (3) has a term ending not later than the maturity
of the Indebtedness secured by such Mortgage and (B) confirmation that the
Borrower has received the notice required pursuant to Section 208(e)(3) of
Regulation H of the Board.
(iv) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in, the title
policy or policies referred to in clause (ii) above and a copy of all other
material documents affecting the Mortgaged Properties.
(r) Insurance. The Administrative Agent shall have received
---------
insurance certificates satisfying the requirements of Section 5.3 of the
Guarantee and Collateral Agreement;
(s) Borrowing Base Certificate; Schedule and Aging of Receivables.
-------------------------------------------------------------
The Administrative Agent shall have received (i) a Borrowing Base Certificate
and (ii) the most recent schedule and aging of Receivables of each of the
Borrower and its Subsidiaries and the Target and its Subsidiaries, certified
by a Responsible Officer of the Borrower (in each case, dated within 30 days
of the Closing Date); and
5.2 Conditions to Each Extension of Credit.
------------------------------------------
The agreement of each Lender to make any extension of
credit requested to be made by it on any date (including, without limitation,
its initial extension of credit) is subject to the satisfaction of the
following conditions precedent:
(a) Representations and Warranties. Each of the representations
-------------------------------
and warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of such
date (and, in the case of such initial extension of credit, after giving
effect to the Acquisition and the financing thereof pursuant hereto).
(b) No Default. No Default or Event of Default shall have occurred
----------
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
(c) Borrowing Base. After giving effect to the Revolving
---------------
Extensions of Credit requested to be made on any such date and the use of
proceeds thereof, the Total Revolving Extensions of Credit at such time shall
not exceed the Borrowing Base at such time.
(d) Closing Date Revolving Extensions of Credit. After giving
----------------------------------------------
effect to the Revolving Extensions of Credit requested to be made on the
Closing Date and the use of proceeds thereof, the Total Revolving Extensions
of Credit at such time shall not exceed $9,800,000.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that,
so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or any
Administrative Agent hereunder, each of Holdings and the Borrower shall and
shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to the
--------------------
Administrative Agent and each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the end
of such year and the related audited consolidated statements of income and of
cash flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by KPMG Peat Marwick LLP or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal year
of the Borrower, the unaudited consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such quarter
and the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 30 days
after the end of each month occurring during each fiscal year of the Borrower
(other than the third, sixth, ninth and twelfth such month), the unaudited
consolidated balance sheets of the Borrower and its Subsidiaries as at the end
of such month and the related unaudited consolidated statements of income and
of cash flows for such month and the portion of the fiscal year through the
end of such month, setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such accountants or officer, as the case
may be, and disclosed therein).
6.2 Certificates; Other Information.
---------------------------------
Furnish to the Administrative Agent and each Lender, or, in the
case of clause (g), to the relevant Lender:
(a) concurrently with the financial statements provided for in
Sections 6.1(a) and 6.1(b), (1) a Compliance Certificate, signed by a
Responsible Officer of the Borrower, and (2) a written certificate in Proper
Form, identifying each Subsidiary which is otherwise required by the
provisions of Section 6.10(c) to become a Guarantor at the request of the
Administrative Agent but which has not yet done so as of the date of such
certificate, and providing an explanation of the reasons why each such
Subsidiary is not a Guarantor, signed by a Responsible Officer of the
Borrower;
(b) as soon as available and in any event within five (5) days
after the date of issuance thereof (if any such management letter is ever
issued), a management letter prepared by the independent public accountants
who reported on the financial statements provided for in Section 6.1(a), with
respect to the internal audit and financial controls of the Borrower and its
Subsidiaries;
(c) as soon as available and in any event within twenty (20) days
after the end of each month, accounts receivable agings and reconciliations,
inventory designations, accounts payable agings and reconciliations, monthly
sales report summaries, open order reports and all other schedules,
computations and other information, all in reasonable detail, as may be
reasonably required or requested by the Administrative Agent, all certified by
a Responsible Officer of the Borrower;
(d) as soon as available and in any event within twenty (20) days
after the end of each month, a Borrowing Base Certificate, signed by a
Responsible Officer of the Borrower, provided that the Borrowing Base
--------
Certificates delivered in respect of each of the three months immediately
following the Closing Date shall be furnished within twenty-five (25) days
after the end of each such month;
(e) as soon as available and in any event at least fifteen (15)
days prior to the commencement of each fiscal year of the Borrower,
management-prepared consolidated financial projections of the Borrower and its
Subsidiaries for the immediately following two (2) fiscal years (setting forth
such projections on both an annual basis and on a monthly basis for the
upcoming fiscal year and on an annual basis only for the fiscal year
thereafter), such projections to be in such format and detail as reasonably
requested by the Administrative Agent;
(f) within five days after the same are sent, copies of all
financial statements and reports which Holdings or the Borrower sends to the
holders of any class of its debt securities or public equity securities and
within five days after the same are filed, copies of all financial statements
and reports which Holdings or the Borrower may make to, or file with, the
Securities and Exchange Commission or any successor or analogous Governmental
Authority; and
(g) such other information relating to the financial condition,
operations and business affairs of the Borrower or any of its Subsidiaries as
from time to time may be reasonably requested by any Lender.
6.3 Payment of Obligations. Pay,
------------------------
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its material obligations of whatever
nature, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of Holdings,
the Borrower or its Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence, etc.
------------------------------------------------------
(a) (i) Preserve, renew
and keep in full force and effect its corporate existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary
or desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 7.4 and except, in the case of clause (ii)
above, to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect; and(_) (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.5 Maintenance of Property; Insurance.
------------------------------------
(a) Keep all Property useful and necessary in its business in
good working order and condition, ordinary wear and tear excepted; (b) keep
its insurable Properties adequately insured at all times by financially sound
and reputable insurers; (c) maintain such other insurance, to such extent and
against such risks, including fire and other risks insured against by extended
coverage, employee liability and business interruption, as is customary with
companies similarly situated and in the same or similar businesses, provided,
--------
however, that such insurance shall insure the Property of the Borrower and
-------
each of its Subsidiaries against all risk of physical damage, including
without limitation, loss by fire, explosion, theft, fraud and such other
casualties as may be reasonably satisfactory to the Administrative Agent, but
in no event at any time in an amount less than the replacement value of the
Collateral; (d) maintain in full force and effect worker's compensation
coverage and public liability insurance against claims for personal injury or
death or property damage occurring upon, in, about or in connection with its
operations and with the use of any Properties owned, occupied or controlled by
the Borrower or any of its Subsidiaries, in such amounts as the Administrative
Agent shall reasonably deem necessary; and (e) maintain such other insurance
as may be required by law or as may be reasonably requested by the
Administrative Agent for purposes of assuring compliance with this Section
6.5.
6.6 Inspection of Property; Books and Records; Discussions.
-----------------------------------------------------------
(a) Keep proper
books of records 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 and (b) upon
reasonable notice (which may be telephonic notice), at all reasonable times
and as often as the Administrative Agent may reasonably request, permit any
authorized representative designated by the Administrative Agent, together
with any authorized representatives of any Lender desiring to accompany the
Administrative Agent, to visit and inspect the Properties and financial
records of the Borrower and its Subsidiaries and to make extracts from such
financial records at the Administrative Agent's expense, and permit any
authorized representative designated by the Administrative Agent (together
with any accompanying representatives of any Lender) to discuss the affairs,
finances and condition of the Borrower and its Subsidiaries with the
appropriate Responsible Officer and such other officers as the Borrower shall
deem appropriate and the Borrower's independent public accountants, as
applicable. The Administrative Agent agrees that it shall schedule any
meeting with any such independent public accountant through the Borrower, and
a Responsible Officer of the Borrower shall have the right to be present at
any such meeting. At the Borrower's expense, the Administrative Agent shall
have the right to examine, up to three (3) times in each fiscal year of the
Borrower prior to the occurrence of a Default or Event of Default (but as
frequently as may be requested by the Administrative Agent at any time after a
Default or Event of Default shall have occurred which has not been cured to
the satisfaction of the Administrative Agent or waived in writing by the
Administrative Agent and the Required Lenders) the existence and condition of
the Receivables, books and records of the Borrower and its Subsidiaries and to
review their compliance with the terms and conditions of this Agreement and
the other Loan Documents, subject to governmental confidentiality
requirements. The Administrative Agent shall also have the right to verify
with any and all customers of the Borrower and any of its Subsidiaries the
existence and condition of the Receivables, as often as the Administrative
Agent may require, without prior notice to or consent of the Borrower or any
of its Subsidiaries; provided, however, that so long as no Default or Event of
-------- -------
Default shall have occurred which has not been cured to the reasonable
satisfaction of the Administrative Agent or waived in writing by the
Administrative Agent and the Required Lenders, the Administrative Agent agrees
to limit the frequency of such verification as to any specific customer of the
Borrower and any of its Subsidiaries to once per fiscal year of the Borrower,
but only so long as the total Receivables owing to the Borrower and its
Subsidiaries by such customer constitute less than five percent (5%) of the
aggregate Receivables owing to the Borrower and its Subsidiaries by all
customers (it being understood that the Administrative Agent's right to verify
with any customers exceeding such 5% concentration limit shall be unlimited,
whether or not any Default or Event of Default exists).
6.7 Notices.
-------
(a) Notify the Administrative Agent and each Lender within one (1)
Business Day after any Responsible Officer of the Borrower or any of its
Subsidiaries acquires knowledge of the occurrence of, or if Holdings, the
Borrower or any of its Subsidiaries causes or intends to cause, as the case
may be, any of the following: (i) the institution of any lawsuit,
administrative proceeding or investigation affecting Holdings, the Borrower or
any of its Subsidiaries, including without limitation, any audit by the
Internal Revenue Service, the adverse determination under which could
reasonably be expected to have a Material Adverse Effect; (ii) any development
or event or any change in the business or affairs of Holdings, the Borrower or
any of its Subsidiaries' which has had or which could reasonably be expected
to have a Material Adverse Effect; (iii) any Event of Default or Default,
together with a detailed statement by a Responsible Officer on behalf of the
Borrower of the steps being taken to cure the effect of such Event of Default
or Default; (iv) the occurrence of a default or event of default by Holdings,
the Borrower or any of its Subsidiaries under any agreement or series of
related agreements to which it is a party, which default or event of default
could have a Material Adverse Effect; (v) any violation by, or investigation
of Holdings, the Borrower or any of its Subsidiaries in connection with any
actual or alleged violation of any Requirement of Law imposed by the
Occupational Safety Hazard Administration or any other Governmental Authority
which has or is likely to have, in the reasonable judgment of any Responsible
Officer of the Borrower, a Material Adverse Effect; (vi) any discovery of any
condition, or any other development, which has resulted or is reasonably
likely to result, in the reasonable judgment of any Responsible Officer of the
Borrower, in the payment of a Material Environmental Amount; and (vii) any
significant change in the accuracy of any material representations and
warranties of Holdings, the Borrower or any of its Subsidiaries in this
Agreement or any other Loan Document.
(b) Promptly notify the Administrative Agent and each Lender of
either (i) the commencement of any material business operations or activities
by any Dormant Subsidiary or (ii) the acquisition by any Dormant Subsidiary of
any asset or assets other than those assets held by such Dormant Subsidiary as
of the Closing Date.
(c) Promptly notify the Administrative Agent of the following
events, as soon as possible and in any event within 30 days after the Borrower
knows or has reason to know thereof: (i) the occurrence of any Reportable
Event with respect to any Plan, a failure to make any required contribution to
a Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or the Borrower or any Commonly Controlled Entity or
any Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action Holdings, the Borrower or the relevant
Subsidiary proposes to take with respect thereto.
6.8 Environmental Laws. (a)(i) Comply with all
------------------
applicable Environmental Laws, and obtain, comply with and maintain any and
all Environmental Permits necessary for its operations as conducted and as
planned; and (ii) take all reasonable efforts to ensure that all of its
tenants, subtenants, contractors, subcontractors, and invitees comply with all
Environmental Laws, and obtain, comply with and maintain any and all
Environmental Permits, applicable to any of them insofar as any failure to so
comply, obtain or maintain reasonably could be expected to adversely affect
the Borrower. For purposes of this 6.8(a), noncompliance with any applicable
Environmental Law or Environmental Permit shall be deemed not to constitute a
breach of this covenant provided that, upon learning of any actual or
--------
suspected noncompliance, Holdings, the Borrower and any affected Subsidiary
shall promptly undertake all reasonable efforts to achieve compliance, and
provided further that, in any case, such non-compliance, and any other
--------
noncompliance with Environmental Law, individually or in the aggregate, could
not reasonably be expected to give rise to a Material Adverse Effect or
materially and adversely affect the value of any Mortgaged Property.
(b) Promptly comply with all orders and directives of all
Governmental Authorities regarding Environmental Laws, other than such orders
and directives as to which an appeal has been timely and properly taken in
good faith, provided that the pendency of any and all such appeals could not
--------
reasonably be expected to give rise to a Material Adverse Effect and does not
materially and adversely affect the value of any Mortgaged Property.
(c) Prior to acquiring any ownership or leasehold interest in real
property (other than a leasehold interest in commercial office space acquired
for the sole purpose of serving as the chief executive offices of the Borrower
and its Subsidiaries), or other interest in any real property that could give
rise to Holdings, the Borrower or any of its Subsidiaries being found subject
to potential liability under any Environmental Law: (i) obtain a written
report by an environmental consultant reasonably acceptable to the
Administrative Agent (the "Environmental Consultant") of the Environmental
Consultant's assessment of the presence or potential presence of significant
levels of any Materials of Environmental Concern on, under, in, or about the
property, or of other conditions that could give rise to potentially
significant liability under or violations of Environmental Law relating to
such acquisition; and (ii) advise the Administrative Agent of the planned
acquisition, including a brief description of the real property involved. The
Administrative Agent shall be provided with a copy of such report upon its
request. The Administrative Agent shall have the right, but shall not have
any duty, to request and/or obtain such report.
(d) At any time upon the Administrative Agent's reasonable request,
and promptly upon the Administrative Agent's request if there has been an
Event of Default which has not been cured to the reasonable satisfaction of
the Administrative Agent, permit an environmental consultant whom the
Administrative Agent in its discretion designates to perform an environmental
assessment of any property owned or leased by Holdings or the Borrower or any
of its Subsidiaries, or on which operations of Holdings, the Borrower or any
of its Subsidiaries otherwise take place. Such environmental assessment shall
be in form, scope, and substance satisfactory to the Administrative Agent.
Holdings, the Borrower and its Subsidiaries shall cooperate fully in the
conduct of such environmental assessment, and the Borrower shall pay the costs
of such environmental assessment immediately upon written demand by the
Administrative Agent. The Administrative Agent shall have the right, but
shall not have any duty, to request and/or obtain any such environmental
assessment.
6.9 Interest Rate Protection. In the
------------------------
case of the Borrower, within 60 days after the Closing Date, enter into
Interest Rate Protection Agreements to the extent necessary to provide that at
least $55,000,000 of the aggregate principal amount of the Term Loans is
subject to either a fixed interest rate or interest rate protection for a
period of not less than three years, which Interest Rate Protection Agreements
shall have terms and conditions reasonably satisfactory to the Administrative
Agent.
6.10 Additional Collateral, etc. (a)
---------------------------
With respect to any Property acquired after the Closing Date by Holdings, the
Borrower or any of its Subsidiaries (other than (x) any Property described in
paragraph (b), (c) or (d) below and (y) any Property subject to a Lien
expressly permitted by Section 7.3(g)) as to which the Administrative Agent,
for the benefit of the Lenders, does not have a perfected Lien, promptly (i)
execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the
Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Lenders, a first priority
security interest in such Property and (ii) take all actions necessary or
advisable to grant to the Administrative Agent, for the benefit of the
Lenders, a perfected first priority security interest in such Property,
including without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative
Agent.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $1,000,000 acquired
after the Closing Date by Holdings, the Borrower or any of its Subsidiaries
(other than any such real property subject to a Lien expressly permitted by
Section 7.3(g)), promptly (i) execute and deliver a first priority Mortgage in
favor of the Administrative Agent, for the benefit of the Lenders, covering
such real property, (ii) if requested by the Administrative Agent, provide the
Lenders with (x) title and extended coverage insurance covering such real
property in an amount at least equal to the purchase price of such real estate
(or such other amount as shall be reasonably specified by the Administrative
Agent) as well as a current ALTA survey thereof, together with a surveyor's
certificate and (y) any consents or estoppels reasonably deemed necessary or
advisable by the Administrative Agent in connection with such mortgage or deed
of trust, each of the foregoing in form and substance reasonably satisfactory
to the Administrative Agent and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date by Holdings
(which, for the purposes of this paragraph (c), shall include any existing
Subsidiary that ceases to be an Excluded Foreign Subsidiary), the Borrower or
any of its Subsidiaries, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
as the Administrative Agent deems necessary or advisable in order to grant to
the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary which
is owned by Holdings, the Borrower or any of its Subsidiaries, (ii) deliver to
the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of Holdings, the Borrower or such Subsidiary, as the case
may be, (iii) cause such new Subsidiary (A) to become a party to the Guarantee
and Collateral Agreement and (B) to take such actions necessary or advisable
to grant to the Administrative Agent for the benefit of the Lenders a
perfected first priority security interest in the Collateral described in the
Guarantee and Collateral Agreement with respect to such new Subsidiary,
including, without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative
Agent, and (iv) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary created
or acquired after the Closing Date by Holdings, the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement as the
Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary which
is owned by Holdings, the Borrower or any of its Subsidiaries (provided that
in no event shall more than 65% of the total outstanding Capital Stock of any
such new Subsidiary be required to be so pledged), (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of Holdings, the Borrower or such Subsidiary, as the case
may be, and take such other action as may be necessary or, in the opinion of
the Administrative Agent, desirable to perfect the Lien of the Administrative
Agent thereon, and (iii) if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
6.11 Additional Receivables Documentation.
------------------------------------
In addition to the Receivables information delivered pursuant to the other
provisions of this Agreement, furnish such further schedules
and/or information as the Administrative Agent may require relating to the
Receivables (including without limitation, sales invoices). The items to be
provided under this Section 6.11 are to be in form satisfactory to the
Administrative Agent and are to be executed and delivered to the
Administrative Agent from time to time solely for its convenience in
maintaining records of the Collateral. The Borrower's failure to give any of
such items to the Administrative Agent shall not affect, terminate, modify or
otherwise limit the Administrative Agent's Lien or security interest in the
Collateral.
6.12 Surveys. Within 60 days after the Closing Date,
-------
furnish the Administrative Agent with (a) an as-built survey of the sites of
each Mortgaged Property, in form and substance satisfactory to the
Administrative Agent and (b) if applicable, endorsements to the title
insurance policies required by Section 5.1(q)(ii) providing access, survey,
comprehensive, tax lot and contiguity coverage.
7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or any Administrative Agent hereunder, the
Borrower shall not, and shall not (except with respect to Section 7.1) permit
any of its Subsidiaries to, directly or indirectly:
7.1 Financial Covenants.
--------------------
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
---------------------------
Ratio (i) as at the last day of any fiscal quarter of the Borrower ending
during any period set forth below or (ii) as at any date during the fiscal
quarter of the Borrower commencing immediately following any such last day to
exceed the ratio set forth below opposite such period:
Period. . . . . . . . . . . . . . . . . Consolidated Leverage Ratio
--------------------------------------- ---------------------------
July 4, 1998 - September 30, 1999 . . . 6.25 to 1.0
October 1, 1999 - September 28, 2000. . 5.75 to 1.0
September 29, 2000 - September 27, 2001 5.00 to 1.0
September 28, 2001 - September 26, 2002 4.50 to 1.0
September 27, 2002 - September 25, 2003 4.00 to 1.0
September 26, 2003 - March 31, 2004 . . 3.50 to 1.0
; provided, that for the purposes of determining the ratio described above
--------
for the fiscal quarters of the Borrower ending September 30, 1998 and December
31, 1998, Consolidated EBITDA for the relevant period shall be deemed to equal
Consolidated EBITDA for such fiscal quarter (and each previous fiscal quarter
commencing after the Closing Date) multiplied by 2 and 4/3, respectively.
-------------
provided, further, that for the purposes of determining the ratio described
-------- -------
above, any fiscal quarter of the Borrower ending on a day which is the Friday
or Sunday closest to the last day of any month shall be deemed to end on such
last day.
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
------------------------------------
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower (or, if less, the number of full fiscal quarters subsequent to
the Closing Date) ending during any period set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
Period. . . . . . . . . . . . . Consolidated Coverage Ratio
------------------------------- ---------------------------
June 30, 1998 - April 2, 1999 . 1.25 to 1.0
April 3, 1999 - March 31, 2000. 1.50 to 1.0
April 1, 2000 - March 30, 2001. 1.75 to 1.0
March 31, 2001 - March 29, 2002 2.25 to 1.0
March 30, 2002 - March 28, 2003 2.50 to 1.0
March 29, 2003 - March 31, 2004 2.75 to 1.0
;provided that for the purposes of determining the ratio described above, any
--------
fiscal quarter of the Borrower ending on a day which is Friday or Sunday
closest to the last day of any month shall be deemed to end on such last day.
(c) Maintenance of Net Worth. Permit Consolidated Net Worth at
------------------------
any time to be less than the sum of (i) $20,000,000 plus (ii) 50% of
----
Consolidated Net Income (if positive) for each fiscal year of the Borrower
ending on or after April 2, 1999.
7.2 Limitation on Indebtedness. Create,
--------------------------
incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Wholly Owned Subsidiary Guarantor to the Borrower or any other Subsidiary;
(c) Indebtedness secured by Liens permitted by Section 7.3(g) in an
aggregate principal amount not to exceed $10,000,000 at any one time
outstanding;
(d) Indebtedness of any Person (or any of such Person's
Subsidiaries) existing at the time such Person becomes a Subsidiary of the
Borrower (or is merged into or consolidated with the Borrower or any of its
Subsidiaries), but only to the extent that such Indebtedness was not incurred
in connection with, as a result of or in contemplation of such Person becoming
a Subsidiary of the Borrower (or being merged into or consolidated with the
Borrower or any of its Subsidiaries); provided, however, that (1) in no event
-------- -------
shall the aggregate amount of such Indebtedness outstanding at any time exceed
$5,000,000 and (2) immediately after such acquired Person becomes a Subsidiary
(or is merged into or consolidated with the Borrower or any of its
Subsidiaries), no Default or Event of Default shall have occurred and be
continuing;
(e) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(e) and any refinancings, refundings, renewals or extensions
thereof on financial and other terms no more onerous to the Borrower or any
Subsidiary in the aggregate than the financial and other terms of such
Indebtedness (without any increase in the principal amount thereof);
(f) guarantees made in the ordinary course of business by the
Borrower or any of its Subsidiaries of obligations of any Wholly Owned
Subsidiary Guarantor;
(g) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed $70,000,000
and (ii) Guarantee Obligations of any Subsidiary Guarantor in respect of such
Indebtedness; provided that such Guarantee Obligations are subordinated to the
--------
same extent as the obligations of the Borrower in respect of the Senior
Subordinated Notes;
(h) Indebtedness of the Borrower and the Subsidiaries pursuant to
Interest Rate Protection Agreements entered into with any Lender in order to
fix the effective rate on the Loans;
(i) Subordinated Indebtedness of the Borrower (other than in
respect of the Senior Subordinated Notes); and
(j) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $5,000,000 at any one time outstanding.
7.3 Limitation on Liens. Create, incur,
-------------------
assume or suffer to exist any Lien upon any of its Property or revenues,
whether now owned or hereafter acquired, except for:
(a) Liens for taxes, assessments, fees and other governmental
charges and claims that are not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
--------
thereto are maintained on the books of the Borrower or its Subsidiaries, as
the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, suppliers', mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary course
of business which are not overdue for a period of more than 45 days or which
are being contested in good faith by appropriate proceedings;
(c) Liens incurred and pledges or deposits made in connection with
workers' compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements;
(d) deposits to secure the performance of bids, tenders, trade
contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) liens constituting survey exceptions, easements, rights-of-way,
restrictions and other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and which do
not in any case materially detract from the value of the Property subject
thereto or materially interfere with the ordinary conduct of the business of
the Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(e), provided that no
--------
such Lien is spread to cover any additional Property after the Closing Date
and that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) to finance the acquisition of
fixed or capital assets, provided that (i) such Liens shall be created
--------
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any Property other than
the Property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into
by the Borrower or any other Subsidiary in the ordinary course of its business
and covering only the assets so leased; and
(j) Zoning restrictions, easements, licenses, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of
property or minor irregularities of title (and with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or under a
landlord or owner of the leased property, with or without consent of the
lessee) which do not in the aggregate materially detract from the value of its
property or assets or materially impair the use thereof in the operation of
its business;
(k) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money), statutory
obligations, surety, customs and appeal bonds and other obligations of like
nature, incurred as an incident to and in the ordinary course of business;
(l) Liens in favor of the Borrower or any Subsidiary securing any
Indebtedness permitted pursuant to Section 7.2(b);
(m) Liens securing Indebtedness incurred pursuant to Section 7.2(d)
on fixed assets of a Person existing at the time such Person becomes a
Subsidiary of the Borrower (or such Person is merged into or consolidated with
the Borrower or any of its Subsidiaries); provided, however, that (i) such
-------- -------
Liens were in existence prior to such Person becoming a Subsidiary of the
Borrower (or prior to the contemplation of such merger or consolidation), (ii)
such Liens do not at any time encumber any Property other than the Property
financed by such Indebtedness and (iii) the amount of Indebtedness secured
thereby is not increased; and
(n) pre-judgment Liens and judgment Liens not giving rise to an
Event of Default; provided that the aggregate amount of such Liens permitted
--------
by this Section 7.3(n) shall not exceed, at any time outstanding, $2,000,000.
7.4 Limitation on Fundamental Changes.
---------------------------------
Enter into any merger, consolidation or amalgamation, or purchase
all or substantially all of the assets of any Person or line of business, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or Dispose of all or substantially all of its Property or
business except:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the continuing
--------
or surviving corporation) or with or into any Wholly Owned Subsidiary
Guarantor (provided that the Wholly Owned Subsidiary Guarantor shall be the
--------
continuing or surviving corporation);
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any Wholly
Owned Subsidiary Guarantor;
(c) so long as no Default or Event of Default shall have occurred
and be continuing or would result therefrom, the Borrower or any of its
Subsidiaries may merge into or consolidate with, or acquire all or a
substantial portion of the assets of, or the shares of Capital Stock in, any
Person (including any division or line of business of any Person) engaged in
the business of manufacturing building products, provided, however, that (i)
--------
with respect to such acquisition, consolidation or merger, the surviving
entity shall be the Borrower or a Wholly Owned Subsidiary Guarantor, (ii) the
aggregate amount of all Loans outstanding hereunder for the purpose of funding
acquisitions, mergers or consolidations permitted pursuant to this Section
7.4(c) shall not exceed $10,000,000 (after giving effect to the applicable
acquisition, consolidation or merger), (iii) assuming that such acquisition,
consolidation or merger, and any additional Indebtedness incurred to finance
the same, had been consummated and incurred at the beginning of the four (4)
most recent consecutive fiscal quarters of the Borrower ending on or
immediately prior to the applicable date of such acquisition, consolidation or
merger, the Borrower would be in pro--forma compliance with the financial
covenant provisions of Section 7.1 hereof for such four (4) consecutive fiscal
quarters, (iv) the aggregate amount of the purchase prices and refinancing
amounts incurred by the Borrower and its Subsidiaries in connection with
consummating acquisitions, mergers or consolidations permitted pursuant to
this Section 7.4(c) (after giving effect to such applicable acquisition,
merger or consolidation) shall not exceed $15,000,000, and (v) the Revolving
Credit Availability immediately after the consummation of such acquisition,
merger or consolidation after giving effect to such acquisition, merger or
consolidation shall not be less than $10,000,000 (any transaction presented
under this Section 7.4(c), a "Permitted Acquisition"); and
----------------------
(d) any Dormant Subsidiary may wind up its affairs, liquidate or
dissolve at any time prior to either (i) the commencement of any material
business operations or activities by such Dormant Subsidiary or (ii) the
acquisition of any asset or assets other than those assets held by such
Dormant Subsidiary as of the Closing Date.
7.5 Limitation on Sale of Assets.
-------------------------------
Dispose of any of its Property or business (including, without limitation,
receivables and leasehold interests), whether now owned or hereafter acquired,
or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Wholly Owned Subsidiary Guarantor;
(e) the sale of other assets having a fair market value not to
exceed $1,000,000 in the aggregate for any fiscal year of the Borrower;
(f) any Asset Sale or Recovery Event, provided, that the
--------
requirements of Section 2.12(b) are complied with in connection therewith; and
(g) sales or discounts of receivables for collection in the ordinary
course of business and consistent with past practice.
7.6 Limitation on Dividends. Declare
-----------------------
or pay any dividend (other than dividends payable solely in common stock of
the Person making such dividend) on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock of the Borrower or any Subsidiary or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations of
Holdings, the Borrower or any Subsidiary (collectively, "Restricted
Payments"), except:
(a) any Subsidiary may make Restricted Payments to the Borrower or
any Wholly Owned Subsidiary Guarantor; and
(b) so long as no Default or Event of Default shall have occurred
and be continuing (immediately after giving effect to the applicable payment
or transaction described below), any of the following: (i) the purchase,
redemption or other acquisition for value by the Borrower or any of its
Subsidiaries of any Capital Stock of the Borrower or any of its Subsidiaries
held by officers, employees, former officers or former employees of the
Borrower or any of its Subsidiaries (or the estates or beneficiaries of such
officers, employees, former officers or former employees) upon death,
disability, retirement or termination of employment, or dividends by the
Borrower to Holdings to effect the same in respect of any Capital Stock of
Holdings or any direct or indirect equity interest of Reliant Partners, with
all of such payments and dividends not to exceed $2,000,000 in the aggregate
since the Closing Date; (ii) dividends by the Borrower not to exceed
$2,000,000 in the aggregate since the Closing Date; (iii) payments by the
Borrower and any of its Subsidiaries to Holdings to pay general and
administrative expenses not to exceed $500,000 in any fiscal year of the
Borrower; (iv) if the Consolidated Leverage Ratio as of the last day of any
fiscal year of the Borrower is less than 3.25 to 1.0, dividends by the
Borrower not to exceed $1,000,000 in the fiscal year of the Borrower
commencing immediately after such last day; (iv) the purchase, redemption or
other acquisition by the Borrower of any of its Capital Stock in exchange for,
or out of the Net Cash Proceeds of the substantially concurrent issuance and
sale of, other Capital Stock of the Borrower or (v) the purchase, redemption,
retirement or other acquisition by the Borrower of Subordinated Indebtedness
made in exchange for, or out of the Net Cash Proceeds of, the substantially
concurrent issuance and sale of Capital Stock of the Borrower or other
Subordinated Indebtedness provided that any Subordinated Indebtedness incurred
in exchange for such retired Subordinated Indebtedness also must be permitted
under Section 7.2 and any and all other provisions hereof).
7.7 Limitation on Capital Expenditures.
-------------------------------------
Make or commit to make (by way of the acquisition of securities
of a Person or otherwise) any Capital Expenditure, except Capital Expenditures
of the Borrower and its Subsidiaries in the ordinary course of business not
exceeding $10,000,000, in the aggregate, in any fiscal year; provided, that
--------
(i) up to $2,000,000 of any such amount referred to above, if not so expended
in the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year and (ii) Capital Expenditures
made during any fiscal year shall be deemed made, first, in respect of amounts
-----
carried over from the prior fiscal year pursuant to subclause (i) above and,
second, in respect of amounts permitted for such fiscal year as provided
------
above.
7.8 Limitation on Investments, Loans and Advances.
-----------------------------------------------
Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting all or a material part of a business unit of, or make any other
investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to the Borrower or a Wholly Owned Subsidiary
Guarantor;
(e) the Acquisition;
(f) loans to account debtors of the Borrower or any of its
Subsidiaries (other than normal and customary extensions of trade credit), so
long as (1) the aggregate amount of such loans by the Borrower and its
Subsidiaries does not exceed $1,500,000 in the aggregate at any time, and (2)
the Borrower promptly causes the promissory notes or other instruments
evidencing such loans to be properly endorsed and delivered to the
Administrative Agent in accordance with the provisions of the applicable
Security Agreements;
(g) investments the Borrower or any of its Subsidiaries in the
Borrower or any Person that, prior to such investment, is a Wholly Owned
Subsidiary Guarantor;
(h) the existing investment by the Borrower in ATEMCO as of the
Closing Date, together with any additional investment by the Borrower in
ATEMCO required pursuant to the ATEMCO Joint Venture Agreement not to exceed
the Borrower's pro-rata share of capital contributions based on its ownership
interest in ATEMCO as of the Closing Date and in any event not to exceed
$100,000 in any fiscal year of the Borrower (provided that all other holders
of ownership interests in ATEMCO are also simultaneously making investments in
ATEMCO pursuant to the ATEMCO Joint Venture Agreement in accordance with their
pro-rata share of required capital contributions based on their respective
ownership interests in ATEMCO);
(i) investments in the Capital Stock of any Subsidiary created or
acquired after the Closing Date in accordance with the other provisions of
this Agreement, including without limitation, the provisions of Section
7.4(c), or with the prior written consent of the Administrative Agent;
(j) in addition to investments otherwise expressly permitted by
this Section 7.8, investments (including joint-ventures) by the Borrower or
any of its Subsidiaries in an aggregate amount (valued at cost) not exceed
$2,000,000 during the term of this Agreement;
(k) loans and advances to officers, directors and employees of the
Borrower or any of its Subsidiaries for purchases of the Capital Stock of
Holdings, not to exceed $750,000 in the aggregate; and
(l) loans and advances to officers, directors and employees of the
Borrower or any of its Subsidiaries for travel, entertainment, moving and
other relocation expenses, in each case made in the ordinary course of
business.
7.9 Limitation on Optional Payments and Modifications of Debt
-------------------------------------------------------------
Instruments, etc.
------------------
(a) Make or offer to make any payment, prepayment,
repurchase or redemption of or otherwise defease or segregate funds with
respect to the Senior Subordinated Notes or any other Subordinated
Indebtedness (other than scheduled interest payments required to be made in
cash), (b) amend, modify, waive or otherwise change, or consent or agree to
any amendment, modification, waiver or other change to, any of the terms of
the Senior Subordinated Notes or any other Subordinated Indebtedness (other
than any such amendment, modification, waiver or other change which (i) would
extend the maturity or reduce the amount of any payment of principal thereof
or which would reduce the rate or extend the date for payment of interest
thereon and (ii) involves the payment of a consent fee of no greater than $30
per $1000 of principal amount of such Indebtedness), (c) designate any
Indebtedness as "Designated Senior Indebtedness" for the purposes of the
Senior Subordinated Note Indenture or (d) amend its certificate of
incorporation in any manner determined by the Administrative Agent to be
adverse to the Lenders without the prior written consent of the Required
Lenders.
7.10 Limitation on Transactions with Affiliates.
----------------------------------------------
(a) Except for any Permitted Affiliate
Transactions, enter into any other transaction, contract or agreement of any
kind with any Affiliate, officer or director of the Borrower or any of its
Subsidiaries, unless (i) such transaction, contract or agreement is made upon
terms and conditions not less favorable to such Person than those which could
have been obtained from wholly independent and unrelated sources, (ii) if such
transaction, contract or agreement (or series of related transactions,
contracts or agreements) involves aggregate payments or other consideration
having a fair market value in excess of $1,000,000, such transaction, contract
or agreement (or series of related transactions, contracts or agreements) is
in writing and a majority of the disinterested members of the Board of
Directors of the Borrower shall have approved such transaction, contract or
agreement (or series of related transactions, contracts or agreements) and
determined that the same comply with the provisions of clause (i) above, and
(iii) if such transaction, contract or agreement (or series of related
transactions, contracts or agreements) involves aggregate payments or other
consideration having a fair market value in excess of $5,000,000, in addition
to the requirements of clauses (i) or (ii) above, the Administrative Agent is
furnished with a written opinion from an Independent Financial Advisor stating
that the terms of such transaction, contract or agreement (or series of
related transactions, contracts or agreements) are fair, from a financial
point of view to the Borrower or the applicable Subsidiary of the Borrower
involved in such transaction, contract or agreement (or series of related
transactions, contracts or agreements), as the case may be.
7.11 Limitation on Sales and Leasebacks.
------------------------------------
Enter into any arrangement with any Person providing for the
leasing by Holdings, the Borrower or any Subsidiary of real or personal
property which has been or is to be sold or transferred by Holdings, the
Borrower or such Subsidiary to such Person or to any other Person to whom
funds have been or are to be advanced by such Person on the security of such
property or rental obligations of Holdings, the Borrower or such Subsidiary.
7.12 Limitation on Changes in Fiscal Periods.
---------------------------------------
Without three months prior notice to the Administrative
Agent, permit the fiscal year of the Borrower to end on a day other than the
Friday or Sunday closest to March 31 or change the Borrower's method of
determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses.
-------------------------------------
Enter into or suffer to exist or become effective any
agreement which prohibits or limits the ability of Holdings, the Borrower or
any of its Subsidiaries to create, incur, assume or suffer to exist any Lien
upon any of its Property or revenues, whether now owned or hereafter acquired,
to secure the Obligations or, in the case of any guarantor, its obligations
under the Guarantee and Collateral Agreement, other than (a) this Agreement
and the other Loan Documents and (b) any agreements governing any purchase
money Liens or Capital Lease Obligations otherwise permitted hereby (in which
case, any prohibition or limitation shall only be effective against the assets
financed thereby).
7.14 Limitation on Restrictions on Subsidiary Distributions.
----------------------------------------------------------
Enter into or suffer
to exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary of the Borrower to (a) pay dividends or make any
other distributions in respect of any Capital Stock of such Subsidiary held
by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary of
the Borrower, (b) make loans or advances to the Borrower or any other
Subsidiary of the Borrower or (c) transfer any of its assets to the Borrower
or any other Subsidiary of the Borrower, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents and (ii) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement which has been entered into in
connection with the Disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary.
7.15 Limitation on Lines of Business.
-----------------------------------
Materially change the nature of its business from manufacturing
building products or enter into any business which is substantially different
from the business in which it is engaged as of the Closing Date.
7.16 Limitation on Amendments to Acquisition Documents.
-------------------------------------------------
(a) Amend, supplement or otherwise
modify (pursuant to a waiver or otherwise) the terms and conditions of the
indemnities and licenses furnished to the Borrower or any of its Subsidiaries
pursuant to the Acquisition Agreement or any other document delivered by the
Sellers (as defined in the Acquisition Agreement) or any of their affiliates
in connection therewith such that after giving effect thereto such indemnities
or licenses shall be materially less favorable to the interests of the Loan
Parties or the Lenders with respect thereto or (b) otherwise amend, supplement
or otherwise modify the terms and conditions of the Acquisition Agreement or
any such other documents except to the extent that any such amendment,
supplement or modification could not reasonably be expected to have a Material
Adverse Effect.
7.17 Limitation on Activities of Holdings.
------------------------------------
Holdings shall not, notwithstanding anything to the contrary in
this Agreement or any other Loan Document, (a) conduct, transact or otherwise
engage in, or commit to conduct, transact or otherwise engage in, any business
or operations other than those incidental to its ownership of the Capital
Stock of the Borrower, (b) incur, create, assume or suffer to exist any
Indebtedness, Guarantee Obligations or other liabilities or financial
obligations, except (i) nonconsensual obligations imposed by operation of law,
(ii) pursuant to the Loan Documents to which it is a party, (iii) pursuant to
the Seller Note, (iv) pursuant to Indebtedness subordinated to the obligations
of Holdings in respect of the Guarantee and Collateral Agreement that matures
no earlier than March 31, 2005 and (v) obligations with respect to its Capital
Stock, or (c) own, lease, manage or otherwise operate any properties or assets
(including cash (other than cash received in connection with dividends made by
the Borrower in accordance with Section 7.6 pending application in the manner
contemplated by said Section) and cash equivalents) other than the ownership
of shares of Capital Stock of the Borrower.
7.18 Credit Extensions. Extend credit other
-----------------
than (a) normal and prudent extensions of credit to customers for goods and
services in the ordinary course of business and (b) loans otherwise permitted
by the provisions of Section 7.2(b) or Section 7.8.
7.19 Change in Accounting Method.
---------------------------
Except for changes permitted by GAAP to conform the Target's accounting
methods and financial reporting practices to those of the Borrower, make or
permit any material change in accounting method or financial reporting
practices except as may be required by GAAP, as in effect from time to time.
7.20 Limitation on Guarantee Obligations.
------------------------------------
Create, incur, assume or suffer to exist any Guarantee
Obligations except Guarantee Obligations permitted by Sections 7.2(a), 7.2(f)
and 7.2(g).
8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes due
in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or as
of the date made or deemed made; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section 6.4(a)
(with respect to the Borrower only), Section 6.7(a), Section 7 of this
Agreement or Sections 5.6 or 5.8(b) of the Guarantee and Collateral Agreement,
(ii) an "Event of Default" under and as defined in any Mortgage shall have
occurred and be continuing or (iii) the Borrower shall fail to deliver a
Borrowing Base Certificate pursuant to Section 6.2(c) within 10 days after
such Borrowing Base Certificate was due pursuant to such Section; or
(d) any Loan Party shall default in the observance or performance
of any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days; or
(e) Holdings, the Borrower or any of its Subsidiaries shall (i)
default in making any payment of any principal of any Indebtedness (including,
without limitation, any Guarantee Obligation, but excluding the Loans) on the
scheduled or original due date with respect thereto; or (ii) default in making
any payment of any interest on any such Indebtedness beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or agreement
under which such Indebtedness was created; or (iii) default in the observance
or performance of any other agreement or condition relating to any such
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 beneficiary of such Indebtedness (or a trustee or agent on
behalf of such holder or beneficiary) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or (in
the case of any such Indebtedness constituting a Guarantee Obligation) to
become payable; provided, that a default, event or condition described in
--------
clause (i), (ii) or (iii) of this paragraph (e) shall not at any time
constitute an Event of Default unless, at such time, one or more defaults,
events or conditions of the type described in clauses (i), (ii) and (iii) of
this paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $1,000,000; or
(f) (i) Holdings, the Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or Holdings, the Borrower or any of its Subsidiaries shall
make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against Holdings, the Borrower or any of its Subsidiaries
any case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
Holdings, the Borrower or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) Holdings, the Borrower or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) Holdings, the Borrower or any of its Subsidiaries
shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan or any
Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower
or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of
a trustee is, in the reasonable opinion of the Required Lenders, likely to
result in the termination of such Plan for purposes of Title IV of ERISA, (iv)
any Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or exist
with respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or conditions, if
any, could, in the sole judgment of the Required Lenders, reasonably be
expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
Holdings, the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance as to which the relevant
insurance company has acknowledged coverage) of $2,000,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason, to
be in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and priority purported to
be created thereby; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so assert;
or
(k) a Change of Control shall occur; or
(l) The Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations or the
obligations of the Subsidiary Guarantors under the Guarantee and Collateral
Agreement, as the case may be, as provided in the Senior Subordinated Note
Indenture, or any Loan Party, any Affiliate of any Loan Party, the trustee in
respect of the Senior Subordinated Notes or the holders of at least 25% in
aggregate principal amount of the Senior Subordinated Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries
of the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions
may be taken: (i) with the consent of the Majority Revolving Credit Facility
Lenders, the Administrative Agent may, or upon the request of the Majority
Revolving Credit Facility Lenders, the Administrative Agent shall, by notice
to the Borrower declare the Revolving Credit Commitments to be terminated
forthwith, whereupon the Revolving Credit Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents (including, without limitation,
all amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit
with respect to which presentment for honor shall not have occurred at the
time of an acceleration pursuant to this paragraph, the Borrower shall at such
time deposit in a Cash Collateral Account opened by the Administrative Agent
an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such Cash Collateral Account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied
to repay other obligations of the Borrower hereunder and under the other Loan
Documents. After all such Letters of Credit shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been satisfied and all
other obligations of the Borrower hereunder and under the other Loan Documents
shall have been paid in full, the balance, if any, in such cash collateral
account shall be returned to the Borrower (or such other Person as may be
lawfully entitled thereto).
9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably
-----------
designates and appoints the Administrative Agent as the agent of such Lender
under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Administrative Agent, in such capacity, to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall have no duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2 Delegation of Duties. The
----------------------
Administrative Agent may execute any of its duties under this Agreement and
the other Loan Documents by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Administrative Agent shall not be responsible for the negligence
or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither the
----------------------
Administrative Agent nor any of its respective officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except to the
extent that any of the foregoing are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from its or
such Person's own gross negligence or willful misconduct) or (ii) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or
received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or for any failure of any Loan Party a party thereto
to perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
9.4 Reliance by Administrative Agent.
----------------------------------
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to Holdings or the Loan Parties), independent accountants
and other experts selected by the Administrative Agent. The Administrative
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders (or, if so
specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.
9.5 Notice of Default. The Administrative Agent
-----------------
shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless the Administrative Agent has
received notice from a Lender, Holdings or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the
Required Lenders (or, if so specified by this Agreement, all Lenders);
provided that unless and until the Administrative Agent shall have received
--------
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests
of the Lenders.
9.6 Non-Reliance on Administrative Agent, Arranger and Other
-------------------------------------------------------------
Lenders.
-------
Each Lender expressly acknowledges that neither the Administrative Agent, the
Arranger nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations or warranties to
it and that no act by the Administrative Agent or Arranger hereinafter taken,
including any review of the affairs of a Loan Party or any affiliate of a Loan
Party, shall be deemed to constitute any representation or warranty by the
Administrative Agent or the Arranger to any Lender. Each Lender represents to
the Administrative Agent and the Arranger that it has, independently and
without reliance upon the Administrative Agent, the Arranger or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of
the Loan Parties and their affiliates and made its own decision to make its
Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative
Agent, the Arranger or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their affiliates. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party which may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to
---------------
indemnify each of the Administrative Agent and the Arranger in its capacity as
such (to the extent not reimbursed by Holdings or the Borrower and without
limiting the obligation of Holdings or the Borrower to do so), ratably
according to their respective Aggregate Exposure Percentages in effect on the
date on which indemnification is sought under this Section 9.7 (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent or the Arranger in any way relating to or
arising out of, the Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent or the Arranger under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any
--------
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements which are found by a final
and nonappealable decision of a court of competent jurisdiction to have
resulted from the Administrative Agent's or the Arranger's gross negligence or
willful misconduct. The agreements in this Section 9.7 shall survive the
payment of the Loans and all other amounts payable hereunder. The
Administrative Agent shall have the right to deduct any amount owed to it by
any Lender under this Section 9.7 from any payment made by it to such Lender
hereunder.
9.8 Administrative Agent in Its Individual Capacity.
-----------------------------------------------
The Administrative Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though the Administrative Agent was not the
Administrative Agent. With respect to its Loans made or renewed by it and
with respect to any Letter of Credit issued or participated in by it, the
Administrative Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
9.9 Successor Administrative Agent.
------------------------------
The Administrative Agent may resign as Administrative Agent upon 10 days'
notice to the Lenders and the Borrower. If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the other Loan
Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall (unless an Event
of Default under Section 8(a) or Section 8(f) with respect to the Borrower
shall have occurred and be continuing) be subject to approval by the Borrower
(which approval shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After the Administrative Agent's resignation as
the Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under this Agreement and the other Loan Documents.
9.10 Authorization to Release Liens.
------------------------------
The Administrative Agent is hereby irrevocably authorized by each of the
Lenders to release any Lien covering any Property of the Borrower or any of
its Subsidiaries that is the subject of a Disposition which is permitted by
this Agreement or which has been consented to in accordance with Section 10.1.
9.11 The Arranger and the Documentation Agent.
----------------------------------------
The Arranger and the Documentation Agent, in their
respective capacities as such, shall have no duties or responsibilities, and
shall incur no liability, under this Agreement and the other Loan Documents.
10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this
----------------------
Agreement, any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the provisions of
this Section 10.1. The Required Lenders and each Loan Party party to the
relevant Loan Document may, or (with the written consent of the Required
Lenders) the Administrative Agent and each Loan Party party to the relevant
Loan Document may, from time to time, (a) enter into written amendments,
supplements or modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of the Loan Parties
hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders, or the Administrative Agent, as the case may be, may specify
in such instrument, any of the requirements of this Agreement or the other
Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
-------- -------
modification shall (i) forgive the principal amount or extend the scheduled or
final date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of
any interest, fee or letter of credit commission payable hereunder or extend
the scheduled date of any payment thereof, increase the amount or extend the
expiration date of any Lender's Revolving Credit Commitment, or amend, modify
or waive any provision of Sections 2.18(a),(b) or (c) or any Security Document
that provides for the ratable sharing by the Lenders under such Security
Document of the proceeds of any realization of the Collateral to provide for a
non-ratable sharing thereof, in each case without the consent of each Lender
directly affected thereby; (ii) amend, modify or waive any provision of this
Section 10.1 or reduce any percentage specified in the definition of Required
Lenders or Required Prepayment Lenders, consent to the assignment or transfer
by the Borrower of any of its rights and obligations under this Agreement and
the other Loan Documents, release all or substantially all of the Collateral
or release all or substantially all of the Guarantors from their obligations
under the Guarantee and Collateral Agreement, in each case without the written
consent of all Lenders; (iii) reduce the percentage specified in the
definition of Majority Facility Lenders without the written consent of all
Lenders under each affected Facility; (iv) amend, modify or waive any
provision of Section 9 without the written consent of the Administrative
Agent; (v) amend, modify or waive any provision of Section 2.6 or 2.7 without
the written consent of the Swing Line Lender; (vi) amend, modify or waive any
provision of Sections 2.12(a),(b),(c) or (d) without the written consent of
the Required Prepayment Lenders; (vii) amend, modify or waive any provision of
Section 3 without the written consent of the Issuing Lender; or (viii) amend,
modify or waive any provision of Section 2.18(d) without the written consent
of the Majority Facility Lenders with respect to the Tranche B Term Loan
Facility. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the Loan
Parties, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Loan Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
10.2 Notices. Unless otherwise expressly provided herein,
-------
all notices, requests and demands to or upon the respective parties hereto to
be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given
or made when delivered, or three Business Days after being deposited in the
mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed as follows in the case of Holdings, the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
The Borrower: 0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent,
the Issuing Lender and
the Swing Line Lender: Chase Bank of Texas, National Association
Loan Syndication Services
0000 Xxxxxx Xxxxxx, 9th Floor
0-000 X-00
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxx
Fax: (000) 000-0000
with a copy to: Chase Bank of Texas, National Association
000 Xxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxx
Fax: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative
--------
Agent or the Lenders shall not be effective until received.
10.3 No Waiver; Cumulative Remedies.
------------------------------
No failure to exercise and no delay in exercising, on the part of the either
Agent or any Lender, any right, remedy, power or privilege hereunder or under
the other Loan Documents shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties.
----------------------------------------------
All representations and warranties made
hereunder, in the other Loan Documents and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the making of the Loans
hereunder.
10.5 Payment of Expenses. The Borrower
-------------------
agrees (a) to pay or reimburse each of the Administrative Agent and the
Arranger for all its reasonable and documented out-of-pocket costs and
expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation,
reasonable field examination expenses (including for each annual field
examination) and the reasonable and documented fees and disbursements of
counsel to each of the Administrative Agent and the Arranger, (b) to pay or
reimburse each Lender and the Administrative Agent for all its reasonable and
documented costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the reasonable and
documented fees and disbursements of counsel (including the allocated fees and
expenses of in-house counsel) to each Lender and of counsel to the
Administrative Agent, (c) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees or
any amendment, supplement or modification of, or any waiver or consent under
or in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender, the Arranger and
the Administrative Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "indemnitee") harmless
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including, without limitation, any of
the foregoing relating to the use of proceeds of the Loans or the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of Holdings, the Borrower or any of its Subsidiaries or any of
the Properties (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"), provided, that the Borrower shall have no
--------
obligation hereunder to any indemnitee with respect to indemnified liabilities
to the extent such indemnified liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such indemnitee. Without
limiting the foregoing, and to the extent permitted by applicable law, each of
Holdings and the Borrower agree not to assert and to cause its Subsidiaries
not to assert, and hereby waive and agree to cause its Subsidiaries to so
waive, all rights for contribution or any other rights of recovery with
respect to all claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature, under or related to
Environmental Laws, that any of them might have by statute or otherwise
against any indemnitee. The agreements in this Section shall survive
repayment of the Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
----------------------------------------------------------
(a) This Agreement
shall be binding upon and inure to the benefit of Holdings, the Borrower, the
Lenders, the Administrative Agent, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Administrative Agent and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant") participating
-----------
interests in any Loan owing to such Lender, any Commitment of such Lender or
any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to
the other parties to this Agreement shall remain unchanged, such Lender shall
remain solely responsible for the performance thereof, such Lender shall
remain the holder of any such Loan for all purposes under this Agreement and
the other Loan Documents, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents. In no event shall any Participant under any such participation
have any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except
to the extent that such amendment, waiver or consent would reduce the
principal of, or interest on, the Loans or any fees payable hereunder, or
postpone the date of the final maturity of the Loans, in each case to the
extent subject to such participation. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall, to the maximum extent permitted
by applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to
it as a Lender under this Agreement, provided that, in purchasing such
--------
participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.19, 2.20 and 2.21
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; provided that, in the case of Section
--------
2.20, such Participant shall have complied with the requirements of said
Section and provided, further, that no Participant shall be entitled to
-------- -------
receive any greater amount pursuant to any such Section than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with applicable
--------
law, at any time and from time to time assign to any Lender or any affiliate
thereof or, with the consent of the Borrower, the Issuing Lender, the Swing
Line Lender and the Administrative Agent (which, in each case, shall not be
unreasonably withheld or delayed), to an additional bank, financial
institution or other entity (an "Assignee") all or any part of its rights and
--------
obligations under this Agreement pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit E, executed by such Assignee, such
Assignor and the Administrative Agent (and, where the consent of the Borrower
is required pursuant to the foregoing provisions, by the Borrower) and
delivered to the Administrative Agent for its acceptance and recording in the
Register; provided that, unless otherwise agreed by the Borrower and the
--------
Administrative Agent, no such assignment to an Assignee (other than any Lender
or any affiliate thereof) shall (i) be in an aggregate principal amount of
less than $5,000,000 (other than in the case of an assignment of all of a
Lender's interests under this Agreement) or (ii) result in the sum of (A) the
unpaid principal amount of such Assignor's Term Loans and (B) such Assignor's
Revolving Credit Commitment or, if the Revolving Credit Commitments have been
terminated, such Assignor's Revolving Extensions of Credit being less than
$5,000,000. Any such assignment need not be ratable as among the Facilities.
Upon such execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance, (x) the
Assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such assigning Lender shall cease to be a
party hereto). Notwithstanding any provision of this Section 10.6, the
consent of the Borrower shall not be required for any assignment which occurs
at any time when any Event of Default shall have occurred and be continuing.
(d) The Administrative Agent shall maintain at its address referred
to in Section 10.2 a copy of each Assignment and Acceptance delivered to it
and a register (the "Register") for the recordation of the names and addresses
--------
of the Lenders and the Commitment of, and principal amount of the Loans owing
to, each Lender from time to time and any Notes evidencing such Loans. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loan and any
Note evidencing such Loan recorded therein for all purposes of this Agreement.
Any assignment of any Loan whether or not evidenced by a Note shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or
transfer of all or part of a Loan evidenced by a Note shall be registered on
the Register only upon surrender for registration of assignment or transfer of
the Note evidencing such Loan, accompanied by a duly executed Assignment and
Acceptance, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the designated Assignee and the old Notes
shall be returned by the Administrative Agent to the Borrower marked
"cancelled". The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof or a Person under common management with
such Lender, by the Borrower, the Administrative Agent and the Issuing Lender)
together with payment to the Administrative Agent of a registration and
processing fee of $3,500 by the Assignee (except that no such registration and
processing fee shall be payable in the case of an Assignee which is already a
Lender or is an affiliate of a Lender or a Person under common management with
a Lender), the Administrative Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto
record the information contained therein in the Register and give notice of
such acceptance and recordation to the Lenders and the Borrower. On or prior
to such effective date, the Borrower, at its own expense, upon request, shall
execute and deliver to the Administrative Agent (in exchange for the Revolving
Credit Note and/or Term Notes, as the case may be, of the assigning Lender) a
new Revolving Credit Note and/or Term Notes, as the case may be, to the order
of such Assignee in an amount equal to the Revolving Credit Commitment and/or
applicable Term Loans, as the case may be, assumed or acquired by it pursuant
to such Assignment and Acceptance and, if the assigning Lender has retained a
Revolving Credit Commitment and/or Term Loans, as the case may be, upon
request, a new Revolving Credit Note and/or Term Notes, as the case may be, to
the order of the assigning Lender in an amount equal to the Revolving Credit
Commitment and/or applicable Term Loans, as the case may be, retained by it
hereunder. Such new Notes shall be dated the Closing Date and shall otherwise
be in the form of the Note replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions
do not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
10.7 Adjustments; Set-off. (a) Except
--------------------
to the extent that this Agreement provides for payments to be allocated to the
Lenders under a particular Facility, if any Lender (a "Benefitted Lender")
-----------------
shall at any time receive any payment of all or part of its Loans or the
Reimbursement Obligations owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in
Section 8(f), or otherwise), in a greater proportion than any such payment to
or collateral received by any other Lender, if any, in respect of such other
Lender's Loans or the Reimbursement Obligations owing to such other Lender, or
interest thereon, such Benefitted Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender's Loan and/or of the Reimbursement Obligations owing to each such other
Lender, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; provided, however, that if all
-------- -------
or any portion of such excess payment or benefits is thereafter recovered from
such Benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to Holdings or
the Borrower, any such notice being expressly waived by Holdings and the
Borrower to the extent permitted by applicable law, upon any amount becoming
due and payable by Holdings or the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise) to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of Holdings
or the Borrower. Each Lender agrees promptly to notify Holdings, the Borrower
and the Administrative Agent after any such setoff and application made by
such Lender, provided that the failure to give such notice shall not affect
--------
the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by
------------
one or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of
the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement
------------
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan
-----------
Documents represent the agreement of Holdings, the Borrower, the
Administrative Agent and the Lenders with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent or any Lender relative to subject matter hereof
not expressly set forth or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS
-------------
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
10.12 Submission To Jurisdiction; Waivers.
--------------------------------------
Each of Holdings and the Borrower hereby irrevocably
and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State
of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action
or proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to Holdings or the
Borrower, as the case may be at its address set forth in Section 10.2 or at
such other address of which the Administrative Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to
in this Section 10.12 any special, exemplary, punitive or consequential
damages.
10.13 Acknowledgements. Each of Holdings
----------------
and the Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to Holdings or the Borrower arising out of
or in connection with this Agreement or any of the other Loan Documents, and
the relationship between Administrative Agent and Lenders, on one hand, and
Holdings and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among Holdings, the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER,
---------------------
THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. The Administrative
---------------
Agent and each Lender agrees to keep confidential all non-public information
provided to it by any Loan Party pursuant to this Agreement that is designated
by such Loan Party as confidential; provided that nothing herein shall prevent
--------
the Administrative Agent or any Lender from disclosing any such information
(a) to the Administrative Agent, any other Lender or any affiliate of any
Lender, (b) to any Participant or Assignee (each, a "Transferee") or
----------
prospective Transferee which agrees to comply with the provisions of this
Section, (c) to the employees, directors, agents, attorneys, accountants and
other professional advisors of such Lender or its affiliates, (d) upon the
request or demand of any Governmental Authority having jurisdiction over the
Administrative Agent or such Lender, (e) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to
any Requirement of Law, (f) if requested or required to do so in connection
with any litigation or similar proceeding, (g) which has been publicly
disclosed other than in breach of this Section 10.15, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about
a Lender's investment portfolio in connection with ratings issued with respect
to such Lender, or (i) in connection with the exercise of any remedy hereunder
or under any other Loan Document.
10.16 Joint and Several Obligations.
-----------------------------
Notwithstanding anything to the contrary contained herein or in any other Loan
Documents, the Borrower and the Guarantors are jointly and severally
responsible for their respective agreements, covenants, representations,
warranties and obligations contained and set forth in this Agreement or in any
other Loan Document to which they are a party.
10.17 Enforceability; Usury. In no
---------------------
event shall any provision of this Agreement, the Notes, or any other
instrument evidencing or securing the indebtedness of the Borrower hereunder
ever obligate the Borrower to pay or allow any Lender to collect interest on
the Notes or any other indebtedness of the Borrower hereunder at a rate
greater than the maximum non-usurious rate permitted by applicable law (herein
referred to as the "Highest Lawful Rate"), or obligate the Borrower to pay any
taxes, assessments, charges, insurance premiums or other amounts to the extent
that such payments, when added to the interest payable on the Notes, would be
held to constitute the payment by the Borrower of interest at a rate greater
than the Highest Lawful Rate; and this provision shall control over any
provision to the contrary.
Without limiting the generality of the foregoing, in the event the
maturity of all or any part of the principal amount of the indebtedness of the
Borrower hereunder shall be accelerated for any reason, then such principal
amount so accelerated shall be credited with any interest theretofore paid
thereon in advance and remaining unearned at the time of such acceleration.
If, pursuant to the terms of this Agreement or the Notes, any funds are
applied to the payment of any part of the principal amount of the indebtedness
of the Borrower hereunder prior to the maturity thereof, then (a) any interest
which would otherwise thereafter accrue on the principal amount so paid by
such application shall be canceled, and (b) the indebtedness of the Borrower
hereunder remaining unpaid after such application shall be credited with the
amount of all interest, if any, theretofore collected on the principal amount
so paid by such application and remaining unearned at the date of said
application; and if the funds so applied shall be sufficient to pay in full
all the indebtedness of the Borrower hereunder, then the Lenders shall refund
to the Borrower all interest theretofore paid thereon in advance and remaining
unearned at the time of such acceleration. Regardless of any other provision
in this Agreement, or in any of the written evidences of the indebtedness of
the Borrower hereunder, the Borrower shall never be required to pay any
unearned interest on such indebtedness or any portion thereof, and shall never
be required to pay interest thereon at a rate in excess of the Highest Lawful
Rate construed by courts having competent jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
RELIANT BUILDING PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxxx
------------------
Name:
Title: President
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as Administrative Agent,
Swing Line Lender, Issuing Lender
and as a Lender
By: \s\ X. X. Xxxxxxxx
------------------
Name:
Title: Vice President
KEY CORPORATE CAPITAL INC.
By: \s\ Xxxxxxx X. Xxxxxxxx
-----------------------
Name:
Title: Vice President
CIBC INC.
By: \s\ Xxxxxxx X. Xxxxx, Xx.
-------------------------
Name:
Title: Executive Director
By: /s/ Xxxxxx X. Gannacher
------------------------
Name:
Title: Director
SANWA BUSINESS CREDIT CORPORATION
By: /s/ Xxxxxxx X. Xxx
-------------------
Name:
Title: First Vice President
BANKBOSTON, N.A.
By: /s/ C. Xxxxxx Xxxxxxxx
----------------------
Name:
Title: Vice President
BHF-BANK AKTIENGESELLSCHAFT
By: /s/ Xxxxxx X. Xxxxx
-------------------
Name:
Title: AVP
By: /s/ Xxxxx Xxxx
--------------
Name:
Title: VP
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxxxxx
--------------------
Name:
Title: Vice President
BANQUE PARIBAS
By: /s/ Xxxxx Xxxxxxxx
------------------
Name:
Title: Vice President
By: /s/ Xxxxx Xxxxxxx
-----------------
Name:
Title: Vice President
KZH-CRESCENT-2 CORPORATION
By: /s/ Xxxxxxxx Xxxxxx
-------------------
Name:
Title: Authorized Agent
XXX XXXXXX AMERICAN CAPITAL PRIME RATE INCOME TRUST
By: /s/ Xxxxxxxx X. Xxxx
--------------------
Name:
Title: Vice President
PILGRIM AMERICA PRIME RATE TRUST
By: /s/ Xxxxxx X. Xxxx
------------------
Name:
Title: Assistant Portfolio Manager
