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CREDIT AGREEMENT
Dated as of November 30, 1999
among
BUILDING MATERIALS HOLDING CORPORATION
and
BMC WEST CORPORATION
AND OTHER SUBSIDIARY GUARANTORS,
BANK OF AMERICA, N.A.,
as Administrative Agent
and
Letter of Credit Issuing Bank
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
---------------------------------------------
Banc of America Securities LLC,
Sole Lead Arranger
and Sole Book Manager
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TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS 1
1.01 Certain Defined Terms...................................1
1.02 Other Interpretive Provisions..........................25
1.03 Accounting Principles..................................26
ARTICLE II THE CREDITS.......................................................26
2.01 Amounts and Terms of Commitments.......................26
2.02 Loan Accounts..........................................27
2.03 Procedure for Borrowing................................28
2.04 Conversion and Continuation Elections..................28
2.05 Voluntary Termination or Reduction of Commitments......30
2.06 Swingline Loans........................................30
2.07 Optional Prepayments...................................32
2.08 Mandatory Prepayments of Loans; Mandatory Commitment
Reductions ..........................................33
2.09 Repayment..............................................34
2.10 Interest...............................................34
2.11 Fees...................................................35
2.12 Computation of Fees and Interest.......................36
2.13 Payments by Holdings...................................36
2.14 Payments by the Banks to the Agent.....................36
2.15 Sharing of Payments, Etc...............................37
2.16 Security and Guaranty..................................38
ARTICLE III THE LETTERS OF CREDIT............................................38
3.01 The Letter of Credit Subfacility.......................38
3.02 Issuance, Amendment and Renewal of Letters of Credit...39
3.03 Risk Participations, Drawings and Reimbursements.......41
3.04 Repayment of Participations............................43
3.05 Role of the Issuing Bank...............................43
3.06 Obligations Absolute...................................44
3.07 Cash Collateral Pledge.................................45
3.08 Letter of Credit Fees..................................45
3.09 Applicability of Uniform Customs and Practice
and ISP 98 ..........................................46
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY............................47
4.01 Taxes..................................................47
4.02 Illegality.............................................48
4.03 Increased Costs and Reduction of Return................48
4.04 Funding Losses.........................................49
4.05 Inability to Determine Rates...........................50
4.06 Certificates of Banks..................................50
4.07 Substitution of Banks..................................50
4.08 Survival...............................................50
i
ARTICLE V CONDITIONS PRECEDENT...............................................51
5.01 Conditions of Initial Credit Extensions................51
5.02 Conditions to All Credit Extensions....................54
ARTICLE VI REPRESENTATIONS AND WARRANTIES....................................55
6.01 Corporate Existence and Power..........................55
6.02 Corporate Authorization; No Contravention..............56
6.03 Governmental Authorization.............................56
6.04 Binding Effect.........................................56
6.05 Litigation.............................................56
6.06 No Defaults............................................57
6.07 ERISA Compliance.......................................57
6.08 Use of Proceeds; Margin Regulations....................58
6.09 Title to Properties; Liens.............................58
6.10 Taxes..................................................58
6.11 Financial Condition....................................58
6.12 Environmental Matters..................................59
6.13 Collateral Documents...................................60
6.14 Regulated Entities.....................................60
6.15 No Burdensome Restrictions.............................60
6.16 Copyrights, Patents, Trademarks and Licenses, Etc......60
6.17 Subsidiaries...........................................61
6.18 Insurance..............................................61
6.19 Swap Obligations.......................................61
6.20 Year 2000..............................................61
6.21 Real Property..........................................62
6.22 Full Disclosure........................................62
ARTICLE VII AFFIRMATIVE COVENANTS............................................62
7.01 Financial Statements...................................62
7.02 Certificates; Other Information........................63
7.03 Notices................................................64
7.04 Preservation of Corporate Existence, Etc...............66
7.05 Maintenance of Property................................66
7.06 Insurance..............................................66
7.07 Payment of Obligations.................................67
7.08 Compliance with Laws...................................67
7.09 Compliance with ERISA..................................67
7.10 Inspection of Property and Books and Records...........67
7.11 Environmental Laws.....................................68
7.12 Use of Proceeds........................................68
7.13 Additional Guarantors..................................68
7.14 Additional Subsidiaries................................69
7.15 Environmental Review...................................69
7.16 Further Assurances.....................................70
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ARTICLE VIII NEGATIVE COVENANTS..............................................71
8.01 Limitation on Liens....................................71
8.02 Disposition of Assets..................................73
8.03 Consolidations and Mergers.............................74
8.04 Loans and Investments..................................74
8.05 Limitation on Indebtedness.............................75
8.06 Transactions with Affiliates...........................76
8.07 Use of Proceeds........................................76
8.08 Contingent Obligations.................................76
8.09 Subsidiaries...........................................77
8.10 Lease Obligations......................................77
8.11 Restricted Payments....................................77
8.12 ERISA..................................................77
8.13 Capital Expenditures...................................78
8.14 Sales and Leasebacks...................................78
8.15 Certain Payments.......................................78
8.16 Modification of Subordinated Debt Documents............78
8.17 Change in Business.....................................78
8.18 Accounting Changes.....................................79
8.19 Financial Covenants....................................79
8.20 No Restrictions on Subsidiary Dividends................79
ARTICLE IX EVENTS OF DEFAULT.................................................79
9.01 Event of Default.......................................79
9.02 Remedies...............................................82
9.03 Specified Swap Contract Remedies.......................83
ARTICLE X THE AGENT 83
10.01 Appointment and Authorization; "Agent".................83
10.02 Delegation of Duties...................................84
10.03 Liability of Agent.....................................84
10.04 Reliance by Agent......................................84
10.05 Notice of Default......................................85
10.06 Credit Decision........................................85
10.07 Indemnification of Agent...............................85
10.08 Agent in Individual Capacity...........................86
10.09 Successor Agent........................................86
10.10 Withholding Tax........................................87
10.11 Collateral Matters.....................................88
10.12 Senior Managing Agents; Co-Agents......................89
ARTICLE XI MISCELLANEOUS.....................................................89
11.01 Amendments and Waivers.................................89
11.02 Notices................................................90
iii
11.03 No Waiver; Cumulative Remedies.........................91
11.04 Costs and Expenses.....................................91
11.05 Indemnification........................................92
11.06 Marshalling; Payments Set Aside........................93
11.07 Successors and Assigns.................................93
11.08 Assignments, Participations, Etc.......................93
11.09 Confidentiality........................................95
11.10 Set-off................................................96
11.11 [Intentionally omitted.]...............................96
11.12 Guaranty...............................................96
11.13 Notification of Addresses, Lending Offices, Etc.......102
11.14 Counterparts..........................................103
11.15 Severability..........................................103
11.16 No Third Parties Benefited............................103
11.17 Governing Law and Jurisdiction........................103
11.18 Waiver of Jury Trial..................................103
11.19 Entire Agreement......................................104
iv
ANNEXES
Annex I Pricing Grid
SCHEDULES
Schedule 2.01 Commitments and Pro Rata Shares
Schedule 2.09 Term Loan Amortization Schedule
Schedule 6.05 Litigation
Schedule 6.07 ERISA
Schedule 6.11 Permitted Liabilities
Schedule 6.12 Environmental Matters
Schedule 6.17 Subsidiaries and Minority Interests
Schedule 6.18 Insurance Matters
Schedule 8.01 Permitted Liens
Schedule 8.05 Permitted Indebtedness
Schedule 8.08 Contingent Obligations
Schedule 11.02 Payment Offices; Addresses for Notices; Lending Offices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Counsel to Loan Parties
Exhibit E Form of Assignment and Acceptance
Exhibit F-1 Form of Revolving Note
Exhibit F-2 Form of Term Note
Exhibit G Form of Additional Guarantor Assumption Agreement
Exhibit H Form of Legal Opinion of Additional Guarantor's Counsel
Exhibit I Form of Borrowing Base Certificate
Exhibit J Form of Security Agreement
Exhibit K Form of Update Certificate
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CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of November 30, 1999, among
BUILDING MATERIALS HOLDING CORPORATION, a Delaware corporation ("HOLDINGS"), as
borrower, BMC WEST CORPORATION, a Delaware corporation (the "COMPANY"), and
certain other affiliates of Holdings, as guarantors, the several financial
institutions from time to time party to this Agreement (individually, a "BANK"
and, collectively, the "BANKS"), First Union National Bank, KeyBank National
Association, South Trust Bank, N.A., U.S. Bank National Association and Xxxxx
Fargo Bank, N.A., as senior managing agents, Union Bank of California, N.A., and
First Security Bank, N.A., as co-agents, and BANK OF AMERICA, N.A., as letter of
credit issuing bank and swingline bank and as administrative agent for the
Banks.
WHEREAS, the Banks have agreed to make available to Holdings a secured
revolving credit facility with letter of credit subfacility and swingline
subfacility upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 CERTAIN DEFINED TERMS. The following terms have the following
meanings when used herein (including in the recitals hereof):
"ACCOUNT" means for purposes of this Agreement and the
Borrowing Base Certificate any right of payment of Holdings or any of
its Subsidiaries for goods sold or leased or for services rendered in
the ordinary course of business which is not evidenced by an instrument
(except as part of chattel paper), whether or not it has been earned by
performance.
"ACCOUNT DEBTOR" means the Person obligated on an Account.
"ACQUISITION" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the acquisition
of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any
Person to become a Subsidiary, or (c) a merger or consolidation or any
other combination with another Person (other than a Person that is a
Subsidiary), PROVIDED that Holdings or the Company, as the case may be,
or the Subsidiary, is the surviving Person.
"ADDITIONAL GUARANTOR ACCESSION DATE" has the meaning
specified in Section 7.13.
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"ADDITIONAL GUARANTOR ASSUMPTION AGREEMENT" has the meaning
specified in Section 7.13.
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, membership interests, by contract, or
otherwise.
"AGENT" means BofA in its capacity as administrative agent for
the Banks hereunder, and any successor agent arising under Section
10.09.
"AGENT-RELATED PERSONS" means BofA and any successor agent
arising under Section 10.09 and any successor letter of credit issuing
bank hereunder, together with their respective Affiliates (including,
in the case of BofA, the Lead Arranger), and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"AGENT'S PAYMENT OFFICE" means the address for payments set
forth on SCHEDULE 11.02 or such other address as the Agent may from
time to time specify.
"AGGREGATE COMMITMENT" means the combined Commitments of the
Banks.
"AGREEMENT" means this Credit Agreement.
"APPLICABLE FEE AMOUNT" means with respect to the commitment
fees and Standby Letter of Credit fees payable hereunder, the amount
set forth opposite the indicated Level below the heading "Commitment
Fee" or "Letter of Credit Fee," as applicable, in the pricing grid set
forth on ANNEX I in accordance with the parameters for calculations of
such amount also set forth on ANNEX I.
"APPLICABLE MARGIN" means, with respect to Base Rate Loans and
Offshore Rate Loans, the amount set forth opposite the indicated Level
below the heading "Base Rate Spread or "Offshore Rate Spread" in the
pricing grid set forth on ANNEX I in accordance with the parameters for
calculations of such amounts also set forth on ANNEX I.
"ASSIGNEE" has the meaning specified in subsection 11.08(a).
"ATTORNEY COSTS" means and includes all fees and disbursements
of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
"AVAILABLE COMMITMENT" has the meaning specific in Section
2.11(b).
"BANK" has the meaning specified in the introductory clause
hereto. References to the "Banks" shall include BofA, including in its
capacity as Issuing Bank and Swingline Bank; for purposes of
2
clarification only, to the extent that BofA may have any rights or
obligations in addition to those of the Banks due to its status as
Issuing Bank or Swingline Bank, its status as such will be specifically
referenced. Unless the context otherwise clearly requires, "BANK"
includes any such institution in its capacity as Swap Provider. Unless
the context otherwise clearly requires, references to any such
institution as a "BANK" shall also include any of such institution's
Affiliates that may at any time of determination be Swap Providers.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C.ss.101, et seq.).
"BASE RATE" means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of interest
in effect for such day as publicly announced from time to time by BofA
as its prime rate. (The prime rate is a rate set by BofA based upon
various factors including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such
announced rate.) Any change in the prime rate announced by BofA shall
take effect at the opening of business on the day specified in the
public announcement of such change.
"BASE RATE LOAN" means a Loan that bears interest based on the
Base Rate.
"BOFA" means Bank of America, N.A., a national banking
association, or any successor by merger thereto.
"BORROWING" means a borrowing hereunder consisting of (i)
Loans of the same Type made to Holdings on the same day by the Banks
under Article II, and, in the case of Offshore Rate Loans, having the
same Interest Period, or (ii) a Swingline Loan (or Swingline Loans)
made to Holdings on the same day by the Swingline Banks, (iii) an L/C
Borrowing.
"BORROWING BASE" means, at any time, an amount equal to the
sum of: (i) 80% of the value of the Accounts; PLUS (ii) 60% of the
value of the Inventory. As used in this definition, "VALUE" as applied
to Inventory shall mean the lower of cost and market, or if there at
any time exist any other matters, events, conditions or contingencies
which the Majority Banks reasonably believe may cause a material
portion of the Accounts to be unpaid, the Majority Banks, in their sole
discretion, may exclude any of the Accounts or Inventory from the
Borrowing Base if the Majority Banks reasonably determine that the
inclusion of such Account or Inventory in the Borrowing Base would have
a Material Adverse Effect.
"BORROWING BASE CERTIFICATE" means a certificate substantially
in the form of Exhibit I.
"BORROWING DATE" means any date on which a Borrowing occurs
under Section 2.03.
3
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City or San Francisco
are authorized or required by law to close and, if the applicable
Business Day relates to any Offshore Rate Loan, means such a day on
which dealings are carried on in the London or other applicable
offshore Dollar interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"CAPITALIZATION" means, as at any date, for Holdings and its
Subsidiaries on a consolidated basis in accordance with GAAP, the sum
of Funded Debt PLUS Stockholder's Equity.
"CAPITAL EXPENDITURE ANNUAL LIMIT" means, for any fiscal year,
the sum of (a) $30,000,000 PLUS (b) 3.0% of the aggregate sales
reported by all Persons acquired by Holdings or its Subsidiaries in
such fiscal year pursuant to a Permitted Acquisition, as reported by
each such acquired Person in its financial statements for such Person's
then most recent fiscal year-end, PLUS (c) the amount of proceeds of
any Disposition or Event of Loss which are reinvested as Capital
Expenditures within six (6) months of Holdings' or any Subsidiary's
receipt of such proceeds.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of
all expenditures (including the current portion of Capital Leases)
which are required to be capitalized on the consolidated balance sheet
of Holdings and its Subsidiaries during that period, in accordance with
GAAP, excluding Acquisitions permitted by subsection 8.04(d).
"CAPITAL LEASE" means, for any Person, any lease of property
(whether real, personal or mixed) which, in accordance with GAAP,
would, at the time a determination is made, be required to be recorded
as a capital lease in respect of which such Person is liable as lessee.
"CASH COLLATERALIZE" means to pledge and deposit with or
deliver to the Agent, for the benefit of the Agent, the Issuing Bank
and the Banks, as additional collateral for the L/C Obligations, cash
or deposit account balances pursuant to the Security Agreement.
Derivatives of such term shall have corresponding meaning.
"CHANGE OF CONTROL" means any person or group of persons
(within the meaning of Section 13 or 14 of the Exchange Act) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the SEC under said Act) of 20% or more of the
outstanding shares of common stock of Holdings; or, during any period
of twelve consecutive calendar months, individuals who were directors
of Holdings on the first day of such period shall cease to constitute a
majority of the board of directors of Holdings.
4
"CLOSING DATE" means the date on which all conditions
precedent set forth in Section 5.01 are satisfied or waived by all
Banks (or, in the case of subsection 5.01(e), waived by the Person
entitled to receive such payment).
"CODE" means the Internal Revenue Code of 1986.
"COLLATERAL" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by Holdings and its
Subsidiaries in or upon which a Lien now or hereafter exists in favor
of the Banks, or the Agent on behalf of the Banks, whether under this
Agreement or under any other Collateral Documents.
"COLLATERAL DOCUMENTS" means, collectively, (i) the Security
Agreement, the Intellectual Property Security Agreements, the Mortgages
and all other security agreements mortgages, deeds of trust, patent and
trademark assignments, lease assignments and other similar agreements
between Holdings or any Subsidiary and the Banks, or the Agent for the
benefit of the Banks, now or hereafter delivered to the Banks or the
Agent pursuant to or in connection with the transactions contemplated
hereby, and all financing statements (or comparable documents now or
hereafter filed in accordance with the Uniform Commercial Code or
comparable law) against Holdings or any Subsidiary as debtor in favor
of the Banks, or the Agent for the benefit of the Banks, as secured
party, and (ii) any amendments, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions of any of
the foregoing.
"COMMERCIAL LETTER OF CREDIT" means a commercial Letter of
Credit Issued for the account of Holdings in respect of the purchase of
Inventory or other goods and services by Holdings or any of its
Subsidiaries in the ordinary course of business.
"COMMITMENT," as to each Bank, means the sum of its Revolving
Commitment and Term Commitment.
"COMPANY" means BMC West Corporation, a Delaware corporation.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT C.
"CONSOLIDATED NET WORTH" means, as of the date of
determination, the consolidated shareholders' equity of Holdings and
its Subsidiaries, as determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, as of the date of
determination, the consolidated net income of Holdings and its
Subsidiaries, as determined in accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" means, as of the date of
determination, the consolidated total assets of Holdings and its
Subsidiaries, as determined in accordance with GAAP.
5
"CONTINGENT OBLIGATION" means (without duplication), as to any
Person, any direct or indirect liability of that Person, whether or not
contingent, with or without recourse, (a) with respect to any
Indebtedness, lease, dividend, letter of credit or other obligation
(the "PRIMARY OBLIGATIONS") of another Person (the "PRIMARY OBLIGOR"),
including any obligation of that Person (i) to purchase, repurchase or
otherwise acquire such primary obligations or any security therefor,
(ii) to advance or provide funds for the payment or discharge of any
such primary obligation, or to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation, (iv) in connection with any
synthetic lease or other similar off balance sheet lease transaction,
or (v) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof (each a "GUARANTY
OBLIGATION"); (b) with respect to any Surety Instrument issued for the
account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings or payments; (c) to purchase any
materials, supplies or other property from, or to obtain the services
of, another Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or
other property, or for such services, shall be made regardless of
whether delivery of such materials, supplies or other property is ever
made or tendered, or such services are ever performed or tendered; (d)
in respect of Earn-Out Obligations; (e) in respect of any Swap
Contract; and (f) in respect of Stock Price Guaranties. The amount of
any Contingent Obligation shall, in the case of Guaranty Obligations,
be deemed equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made or, if
not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof, and in the case of other Contingent
Obligations other than in respect of Swap Contracts, shall be equal to
the maximum reasonably anticipated liability in respect thereof and, in
the case of Contingent Obligations in respect of Swap Contracts, shall
be equal to the Swap Termination Value.
"CONTRACTUAL OBLIGATION" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or by
which it or any of its property is bound.
"CONVERSION/CONTINUATION DATE" means any date on which, under
Section 2.04, Holdings (a) converts Loans of one Type to another Type,
or (b) continues as Loans of the same Type, but with a new Interest
Period, Loans having Interest Periods expiring on such date.
"CREDIT EXPOSURE" has the meaning specified in the definition
of Majority Banks.
6
"CREDIT EXTENSION" means and includes (a) the making of any
Revolving Loans, Term Loans or Swingline Loans hereunder, and (b) the
Issuance of any Letters of Credit hereunder.
"DEFAULT" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
"DISPOSITION" means the sale, lease, conveyance or other
disposition of property, other than sales or other dispositions
expressly permitted under subsections 8.02(a) through 8.02(g).
"DISPOSITION VALUE" means the aggregate net book value of all
assets sold, transferred, leased or disposed of in any transaction
determined as of the date of such transfer or proposed transfer
thereof.
"DOLLARS," "DOLLARS" and "$" each mean lawful money of the
United States.
"EARN-OUT OBLIGATIONS" means any obligations, whether
contingent or matured, to pay additional consideration in connection
with the Acquisition by Holdings or any Subsidiary of any capital stock
or assets of any Person.
"EBITA" means, for any period, for Holdings and its
Subsidiaries, the sum of consolidated net income (exclusive of
extraordinary gains and losses and exclusive of earnings from Minority
Investments) of Holdings and its Subsidiaries for such period PLUS (to
the extent deducted in determining consolidated net income) (i)
Interest Expense for such period, (ii) income tax expense for such
period, (iii) amortization expense and other non-cash expenses for such
period (other than depreciation expense) and (iv) cash dividends in
respect of Minority Investments, in each case, measured in accordance
with GAAP.
"EBITDA" means, for any period, for Holdings and its
Subsidiaries, the sum of consolidated net income (exclusive of
extraordinary gains and losses and exclusive of earnings from Minority
Investments) of Holdings and its Subsidiaries for such period PLUS (to
the extent deducted in determining consolidated net income) (i)
Interest Expense for such period, (ii) income tax expense for such
period, (iii) depreciation expense, amortization expense and other
non-cash expenses for such period and (iv) cash dividends in respect of
Minority Investments, in each case, measured in accordance with GAAP.
For purposes of determining the consolidated EBITDA of Holdings and its
Subsidiaries hereunder for purposes of calculating the EBITDA Ratio
hereunder, EBITDA shall be adjusted upon the Permitted Acquisition of
any acquired Subsidiary (the "ACQUIREE") (A) to include the historical
financial results of such Acquiree for the four fiscal quarter period
("CALCULATION PERIOD") for which Holdings' consolidated EBITDA is
calculated hereunder, until such time as the first day of any
Calculation Period falls on or after the date on which the Acquisition
of such Acquiree is consummated; and (B) to exclude any specific,
identifiable expense items which are eliminated as a result of the
7
Permitted Acquisition of such Acquiree at the closing thereof, provided
that audited financial statements accompanied by an unqualified opinion
of an Independent Auditor are delivered to the Agent and the Banks in
respect of such Acquiree for the then most recent fiscal year of such
Acquiree, and PROVIDED FURTHER that Holdings shall have delivered a
certificate of a Responsible Officer clearly setting forth such pro
forma additions to consolidated EBITDA resulting from the Permitted
Acquisition of such Acquiree.
"EBITDA RATIO" means, as of the end of any fiscal quarter,
measured on a consolidated basis for Holdings and its Subsidiaries as
of such date, the ratio of (i) Funded Debt existing on such date to
(ii) EBITDA for the period of four fiscal quarters ending on such date.
"EFFECTIVE AMOUNT" means (i) with respect to any Revolving
Loans, Term Loans and Swingline Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any
Borrowings and prepayments or repayments of Revolving Loans, Term Loans
and Swingline Loans occurring on such date; and (ii) with respect to
any outstanding L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any Issuances of
Letters of Credit occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a
result of any reimbursements of outstanding unpaid drawings under any
Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date; PROVIDED
that for purposes of Section 2.08, the Effective Amount shall be
determined without giving effect to any mandatory prepayments to be
made under Section 2.08.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $100,000,000; (b) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development (the "OECD"),
or a political subdivision of any such country, and having a combined
capital and surplus of at least $100,000,000, PROVIDED that such bank
is acting through a branch or agency located in the United States; and
(c) a Person that is primarily engaged in the business of commercial
banking and that is (i) a Subsidiary of a Bank, (ii) a Subsidiary of a
Person of which a Bank is a Subsidiary, or (iii) a Person of which a
Bank is a Subsidiary.
"ENVIRONMENTAL CLAIMS" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability
or responsibility for violation of any Environmental Law, or for
release or injury to the environment or threat to public health,
personal injury (including sickness, disease or death), property
damage, natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), cleanup, removal,
remedial or response costs, restitution, civil or criminal penalties,
injunctive relief, or other type of relief, resulting from or based
upon the presence, placement, discharge, emission or release (including
8
intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental, placement, spills, leaks,
discharges, emissions or releases) of any Hazardous Material at, in, or
from any property, whether or not owned by Holdings or any Subsidiary.
"ENVIRONMENTAL LAWS" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters; including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Clean Air Act, the Federal Water Pollution Control Act
of 1972, the Solid Waste Disposal Act, the Federal Resource
Conservation and Recovery Act, the Toxic Substances Control Act, the
Emergency Planning and Community Right-to-Know Act, the California
Hazardous Waste Control Law, the California Solid Waste Management,
Resource, Recovery and Recycling Act, the California Water Code and the
California Health and Safety Code.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with Holdings or the Company within
the meaning of Section 414(b) or (c) of the Code (and Sections 414(m)
and (o) of the Code for purposes of provisions relating to Section 412
of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by Holdings, the Company or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer (as defined in Section
4001(a)(2) of ERISA) or a cessation of operations which is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by Holdings, the Company or any ERISA Affiliate from
a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; or
(f) the imposition of any liability under Title IV of ERISA, other than
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
Holdings, the Company or any ERISA Affiliate.
"ESTIMATED REMEDIATION COSTS" means all costs associated with
performing work to remediate contamination of real property or
groundwater, including engineering and other professional fees and
expenses, costs to remove, transport and dispose of contaminated soil,
costs to "cap" or otherwise contain contaminated soil, and costs to
pump and treat water and monitor water quality.
9
"EURODOLLAR RESERVE PERCENTAGE" has the meaning specified in
the definition of "Offshore Rate."
"EVENT OF DEFAULT" means any of the events or circumstances
specified in Section 9.01.
"EVENT OF LOSS" means, with respect to any property, any of
the following: (a) any loss, destruction or damage of such property;
(b) any pending or threatened institution of any proceedings for the
condemnation or seizure of such property or for the exercise of any
right of eminent domain; or (c) any actual condemnation, seizure or
taking, by exercise of the power of eminent domain or otherwise, of
such property, or confiscation of such property or the requisition of
the use of such property.
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"EXISTING CREDIT FACILITY" means the Third Amended and
Restated Credit Agreement, dated as of September 30, 1998, as amended,
among the Company, the Banks named therein and BofA, as successor agent
to Xxxxx Fargo Bank, National Association.
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York with respect to the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is
not so published with respect to any such preceding Business Day, the
rate for such day will be the arithmetic mean as determined by the
Agent of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that day by each of
three leading brokers of Federal funds transactions in New York City
selected by the Agent.
"FEE LETTER" has the meaning specified in subsection 2.11(a).
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"FUNDED DEBT" means , as of any date of determination, all
Indebtedness of Holdings and its Subsidiaries on such date, on a
consolidated basis in accordance with GAAP, which by its terms matures
more than one year after the date of calculation, and any such
Indebtedness maturing within one year from such date which is renewable
or extendable at the option of the obligor to a date more than one year
from such date and including, in any event, all Revolving Loans and all
L/C Obligations.
"FURTHER TAXES" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees, withholdings or
similar charges (including net income taxes and franchise taxes), and
all liabilities with respect thereto, imposed by any jurisdiction on
account of amounts payable or paid pursuant to Section 4.01.
10
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date
of determination, subject to Section 1.03.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"GUARANTOR" means the Company and each other direct or
indirect Subsidiary of Holdings party to a Guaranty in its capacity as
a guarantor hereunder.
"GUARANTY" means the guaranty of each Guarantor made pursuant
to Section 11.12 and any other guaranty under any separate agreement
executed by any Guarantor pursuant to which it guarantees the
Obligations.
"GUARANTY OBLIGATION" has the meaning specified in the
definition of "Contingent Obligation."
"HAZARDOUS MATERIALS" means all those substances that are
regulated by, or which may form the basis of liability under, any
Environmental Law, including any substance identified under any
Environmental Law as a pollutant, contaminant, hazardous waste,
hazardous constituent, special waste, hazardous substance, hazardous
material, or toxic substance, or petroleum or petroleum derived
substance or waste.
"HOLDINGS" means Building Materials Holding Corporation, a
Delaware corporation.
"HONOR DATE" has the meaning specified in subsection 3.03(b).
"INDEBTEDNESS" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of property or
services (other than trade payables entered into in the ordinary course
of business on ordinary terms but including all non-contingent Earn-Out
Obligations); (c) all reimbursement or payment obligations with respect
to Surety Instruments (contingent or otherwise); (d) all obligations
evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of
property, assets or businesses; (e) all indebtedness created or arising
under any conditional sale or other title retention agreement, or
incurred as financing, in either case with respect to property acquired
by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to
11
repossession or sale of such property); (f) all obligations with
respect to Capital Leases; (g) all indebtedness referred to in clauses
(a) through (f) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien upon or in property (including accounts and
contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; (h) all
Guaranty Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (a) through (g) above; and
(i) all Stock Price Guaranties having a tenor of six (6) months or more
or exceeding $2,000,000 in the aggregate for all Stock Price Guaranties
then outstanding. For all purposes of this Agreement, the Indebtedness
of any Person shall include all recourse Indebtedness of any
partnership or joint venture or limited liability company in which such
Person is a general partner or a joint venturer or a member.
"INDEMNIFIED LIABILITIES" has the meaning specified in Section
11.05.
"INDEMNIFIED PERSON" has the meaning specified in Section
11.05.
"INDEPENDENT AUDITOR" has the meaning specified in subsection
7.01(a).
"INSOLVENCY PROCEEDING" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before any
court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors,
or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; in either case undertaken
under U.S. Federal, state or foreign law, including the Bankruptcy
Code.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" has the meaning
specified in the Security Agreement.
"INTEREST EXPENSE" means, for any period, for Holdings and its
Subsidiaries in accordance with GAAP, all interest in respect of
Indebtedness accrued or capitalized during such period (whether or not
actually paid during such period).
"INTEREST PAYMENT DATE" means, (i) as to any Offshore Rate
Loan, the last day of each Interest Period applicable to such Loan,
(ii) as to any Base Rate Loan, the last Business Day of each calendar
quarter and the Revolving Termination Date (in the case of Revolving
Loans) and the Term Maturity Date (in the case of Term Loans) and (iii)
as to any Swingline Loan, the Business Day on which the principal of
such Swingline Loan is repaid or such other date provided for in
Section 2.06(e); PROVIDED, HOWEVER, that if any Interest Period for an
Offshore Rate Loan exceeds three months, the date that falls three
months after the beginning of such Interest Period and after each
Interest Payment Date thereafter is also an Interest Payment Date.
12
"INTEREST PERIOD" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter, as selected by Holdings in its Notice
of Borrowing or Notice of Conversion/ Continuation; PROVIDED that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless, in the case of
an Offshore Rate Loan, the result of such extension would be
to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the preceding
Business Day;
(ii) any Interest Period pertaining to an Offshore
Rate Loan that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iii) no Interest Period for any Term Loan shall
extend beyond the Term Maturity Date and no Interest Period
for any Revolving Loan shall extend beyond the Revolving
Termination Date; and
(iv) no Interest Period applicable to a Term Loan or
portion thereof shall extend beyond any date upon which is due
any scheduled principal payment in respect of the Term Loans
unless the aggregate principal amount of Term Loans
represented by Base Rate Loans or Offshore Rate Loans having
Interest Periods that will expire on or before such date,
equals or exceeds the amount of such principal payment.
"INVENTORY" shall mean for purposes of this Agreement and the
Borrowing Base Certificate all goods of Holdings or any of its
Subsidiaries held for sale or lease in the ordinary course of business,
work in progress and any and all raw materials used in connection with
the foregoing.
"INVESTMENT" has the meaning specified in Section 8.04.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"ISSUANCE DATE" has the meaning specified in subsection
3.01(a).
"ISSUE" means, with respect to any Letter of Credit, to issue
or to extend the expiry of, or to renew or increase the amount of or
otherwise amend, such Letter of Credit; and the terms "ISSUED,"
"ISSUING" and "ISSUANCE" have corresponding meanings.
13
"ISSUING BANK" means BofA in its capacity as issuer of one or
more Letters of Credit hereunder, together with any replacement letter
of credit issuer arising under subsection 10.01(b) or Section 10.09.
"XXXXX PURCHASE OPTION" means the right of BMHC Framing, Inc.,
a Wholly Owned Subsidiary of Holdings, to acquire the remaining 51%
interest in Xxxxx Brothers Industries, LLC, from Xxxxx Brothers, Inc.,
as set forth in that certain Amended and Restated Limited Liability
Company Agreement of Xxxxx Brothers Industries, LLC, dated as of May 1,
1999, and/or the obligation of Holdings or BMHC Framing, Inc. (or any
of their Affiliates, to the extent such obligation is assigned to any
such Affiliate), to acquire the remaining 51% interest in Xxxxx
Brothers Industries, LLC, under that certain Put Agreement dated as of
April 30, 1999, by and among Xxxxx Brothers, Inc., BMHC Framing, Inc.,
Holdings and Xxxxx Brothers Industries, LLC.
"L/C ADVANCE" means each Bank's participation in any L/C
Borrowing in accordance with its Pro Rata Share.
"L/C AMENDMENT APPLICATION" means an application form for
amendment of outstanding Standby or Commercial Letters of Credit as
shall at any time be in use at the Issuing Bank, as the Issuing Bank
shall request.
"L/C APPLICATION" means an application form for issuances of
Standby or Commercial Letters of Credit as shall at any time be in use
at the Issuing Bank, as the Issuing Bank shall request.
"L/C BORROWING" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been reimbursed
on the date when made nor converted into a Borrowing of Revolving Loans
under subsection 3.03(c).
"L/C COMMITMENT" means the commitment of the Issuing Bank to
Issue, and the commitment of the Banks severally to participate in,
Letters of Credit from time to time Issued or outstanding under Article
III, in an aggregate amount not to exceed on any date the amount of
$15,000,000, as the same shall be reduced as a result of a reduction in
the L/C Commitment pursuant to Section 2.05 or 2.08; PROVIDED that the
L/C Commitment is a part of the combined Revolving Commitments of the
Banks rather than a separate, independent commitment; and PROVIDED
FURTHER that if as a result of any Commitment reductions hereunder the
L/C Commitment shall exceed the combined Revolving Commitments of the
Banks, the L/C Commitment shall automatically reduce by the amount of
such excess.
"L/C OBLIGATIONS" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding,
PLUS (b) the amount of all unreimbursed drawings under all Letters of
Credit, including all outstanding L/C Borrowings.
14
"L/C-RELATED DOCUMENTS" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"LEAD ARRANGER" means Banc of America Securities LLC, a
Delaware limited liability company, in its capacity as Sole Lead
Arranger and Sole Book Manager.
"LENDING OFFICE" means, as to any Bank, the office or offices
of such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office," as the case may be, on SCHEDULE
11.02, or such other office or offices as such Bank may from time to
time notify to Holdings and the Agent.
"LETTERS OF CREDIT" means any letters of credit Issued by the
Issuing Bank pursuant to Article III (which may be Commercial Letters
of Credit or Standby Letters of Credit).
"LIEN" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
Capital Lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law) and
any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an Operating Lease.
"LOAN" means an extension of credit by a Bank to Holdings
under Article II, which may be a Base Rate Loan, an Offshore Rate Loan
or a Swingline Loan (each a "TYPE" of Loan), and includes a Revolving
Loan or Term Loan, or Article III in the form of an L/C Advance.
"LOAN DOCUMENTS" means this Agreement, any Notes, any
Guaranty, the Collateral Documents, the Fee Letter, the L/C-Related
Documents, any documents evidencing or relating to Specified Swap
Contracts and all other documents delivered to the Agent or any Bank in
connection herewith.
"LOAN PARTY" means the Company, Holdings and each other
Subsidiary of Holdings party hereto as a Guarantor.
"MAJORITY BANKS" means at any time Banks then holding in
excess of 50% of the then aggregate Credit Exposure of all the Banks,
or, if no Credit Exposure exists, Banks then having in excess of 50% of
the Aggregate Commitment. As used in this definition, the "CREDIT
EXPOSURE" of any Bank means (i) with respect to any outstanding
Revolving Loans, the aggregate outstanding principal amount of the
Revolving Loans made by such Bank, (ii) with respect to any outstanding
Term Loans, the aggregate outstanding principal amount of the Term
Loans made by such Bank, and (iii) with respect to any outstanding
15
Swingline Loans and L/C Obligations, the participating interest therein
equal to such Bank's Pro Rata Share thereof.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation T, U or X of the FRB.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or prospects of Holdings
or Holdings and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of any Loan Party to perform under any Loan
Document and to avoid any Event of Default; or (c) a material adverse
effect upon (i) the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document or (ii) the
perfection or priority of any Lien granted under the Collateral
Documents.
"MINIMUM AMOUNT" means (i) in respect of any Borrowing,
conversion or continuation of Loans, (a) in the case of Base Rate
Loans, an aggregate minimum amount of $5,000,000 or any integral
multiple of $1,000,000 in excess thereof, (b) in the case of Offshore
Rate Loans, an aggregate minimum amount of $5,000,000 or any integral
multiple of $1,000,000 in excess thereof and (c) in the case of
Swingline Loans, an aggregate minimum amount of $100,000 or any
integral multiple of $100,000 in excess thereof (or such other amount
as shall be acceptable to the Swingline Bank), (ii) in the case of any
reduction of the Commitments under Section 2.05, $5,000,000 or any
multiple of $1,000,000 in excess thereof, and (iii) in the case of any
optional prepayment of Loans under Section 2.07, $1,000,000 or any
multiple of $1,000,000 in excess thereof.
"MINORITY INVESTMENT" means the direct or indirect Investment
by Holdings in any Person, PROVIDED in each case that such Person is
not a Subsidiary at the time of such Investment and after giving effect
thereto.
"MORTGAGE" means any deed of trust, mortgage, leasehold
mortgage, assignment of rents or other document creating a Lien on real
property or any interest in real property.
"MORTGAGED PROPERTY" means all property subject to a Lien
pursuant to a Mortgage.
"MULTIEMPLOYER PLAN" means a "multiemployer plan," within the
meaning of Section 4001(a)(3) of ERISA, to which Holdings, the Company
or any ERISA Affiliate makes, is making, or is obligated to make
contributions or, during the preceding three calendar years, has made,
or been obligated to make, contributions.
"NET ISSUANCE PROCEEDS" means, as to any issuance of debt or
equity by any Person, cash proceeds received or receivable by such
Person in connection therewith, net of out-of-pocket costs and expenses
paid or incurred in connection therewith in favor of any Person not an
Affiliate of such Person.
16
"NET PROCEEDS" means, as to any Disposition by a Person,
proceeds in cash, checks or other cash equivalent financial instruments
as and when received by such Person, net of: (i) the direct costs
relating to such Disposition excluding amounts payable to such Person
or any Affiliate of such Person, (ii) sale, use or other transaction
taxes and capital gains taxes paid or payable by such Person as a
direct result thereof, and (iii) amounts required to be applied to
repay principal, interest and prepayment premiums and penalties on
Indebtedness secured by a purchase money security interest on any asset
which is the subject of such Disposition. "NET PROCEEDS" shall also
include proceeds paid on account of any Event of Loss, net of (i) all
money actually applied to repair or reconstruct the damaged property or
property affected by the condemnation or taking, (ii) all of the costs
and expenses incurred in connection with the collection of such
proceeds, award or other payments, and (iii) any amounts retained by or
paid to parties having superior rights to such proceeds, awards or
other payments. For purposes of determining the amount of Net Proceeds
in respect of any Disposition or Event of Loss, however, the amount of
proceeds calculated as provided above shall be reduced by the amount of
such proceeds that such Person has used (or intends to use within six
months of the date of receipt of such proceeds) to pay the purchase
price in connection with any Permitted Acquisition, Minority Investment
or any Capital Expenditures (to the extent permitted hereunder), it
being understood that any portion of such proceeds that has not been so
used within such six month period shall be deemed to be Net Proceeds
received on the last day of such six month period and that all such
proceeds shall be deemed to be Net Proceeds at any time that an Event
of Default exists hereunder.
"NOTES" means the Revolving Notes and the Term Notes.
"NOTICE OF BORROWING" means a notice in substantially the form
of EXHIBIT A.
"NOTICE OF CONVERSION/CONTINUATION" means a notice in
substantially the form of EXHIBIT B.
"OBLIGATIONS" means the Revolving Loans, Term Loans Swingline
Loans, L/C Obligations and other Indebtedness arising under any Loan
Document owing by Holdings to any Bank, the Agent, the Issuing Bank,
the Swingline Bank or any Indemnified Person, whether direct or
indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising.
"OFFSHORE RATE" means, for any Interest Period, with respect
to Offshore Rate Loans comprising part of the same Borrowing, the rate
of interest per annum (rounded upward to the next 1/16th of 1%)
determined by the Agent as follows:
Offshore Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
17
Where,
"EURODOLLAR RESERVE PERCENTAGE" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect
on such day (whether or not applicable to any Bank) under
regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"LIBOR" means: (i) the rate of interest per annum determined
by the Agent to be the rate of interest per annum (rounded
upward to the nearest 1/100th of 1%) appearing on Dow Xxxxx
Page 3750 (as defined below) for Dollar deposits having a
maturity comparable to such Interest Period, at approximately
11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period, subject to clause (ii)
below; or (ii) if for any reason the rate is not available as
provided in the preceding clause (i) of this definition,
"LIBOR" instead means the rate of interest per annum
determined by the Agent to be the arithmetic mean (rounded
upward to the nearest 1/16th of 1%) of the rates of interest
per annum notified to the Agent by BofA as the rate of
interest at which Dollar deposits in the approximate amount of
the Offshore Rate Loan to be made, continued or converted by
BofA, and having a maturity comparable to such Interest
Period, would be offered to major banks in the London
interbank market at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of
such Interest Period. As used in this definition, "DOW XXXXX
PAGE 3750" means the display designated as "3750" on the Dow
Xxxxx Market Service (formerly known as the Telerate Service)
or any replacement page thereof or successor thereto.
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of any
change in the Eurodollar Reserve Percentage.
"OFFSHORE RATE LOAN" means a Loan that bears interest based on
the Offshore Rate.
"OPERATING LEASE" means, for any Person, any lease of property
(whether real, personal or mixed) which, in accordance with GAAP,
would, at the time a determination is made, be required to be recorded
as an operating lease in respect of which such Person is liable as
lessee.
"ORGANIZATION DOCUMENTS" means, for any Person, the
certificate or articles of incorporation, the bylaws, any certificate
of determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, any
18
other applicable organizational or constitutional documents and all
applicable resolutions of the board of directors (or any committee
thereof) of such Person
"OTHER TAXES" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents.
"PARTICIPANT" has the meaning specified in subsection
11.08(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"PENSION PLAN" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which Holdings or the
Company sponsors, maintains, or to which it makes, is making, or is
obligated to make contributions, or in the case of a multiple employer
plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding five (5) plan years.
"PERFECTION CERTIFICATE" means a certificate, in form and
substance satisfactory to the Agent, providing certain information
relating to the Loan Parties and the Collateral.
"PERMITTED ACQUISITION" means (a) the Acquisition of Xxxxx
Brothers Industries, LLC pursuant to the Xxxxx Purchase Option,
PROVIDED that the consideration given therefor (including the
incurrence of Indebtedness) shall not exceed $40,000,000; and (b) any
other Acquisition that conforms to the following requirements: (i) the
assets, Person, division or line of business to be acquired is in a
substantially similar or ancillary line of business as the Company,
(ii) the Agent and the Banks shall have received promptly, and in any
event no less than ten (10) Business Days prior to the consummation of
such Acquisition, (A) financial information regarding the assets,
Person or business to be acquired, including the most recent audited
financial statements, if available, but in any case the most recently
prepared balance sheet, statement of income and statement of cash flows
for the assets, Person or business to be acquired and pro forma
projected financial statements showing the effect of the Acquisition of
the assets, Person or business on Holdings, including a balance sheet
for Holdings and its Subsidiaries as of the time of the Acquisition and
projected statements of income and cash flows for Holdings and its
Subsidiaries through at least the Revolving Termination Date, and (B) a
completed worksheet in substantially the form of Schedule 1 to the
Compliance Certificate demonstrating Holdings' pro forma compliance
with the financial covenants set forth in Section 8.19, measured as of
the last day of the fiscal quarter then most recently ended, after
giving effect to such Acquisition, (iii) all transactions related to
such Acquisition shall be consummated in accordance with applicable
Requirements of Law, (iv) such Acquisition shall be non-hostile in
nature, (v) the prior, effective written consent or approval to such
Acquisition of the board of directors or equivalent governing body of
19
the acquiree is obtained, (vi) immediately after giving effect to such
Acquisition: (A) no Default or Event of Default shall have occurred and
be continuing or would result therefrom, (B) 100% of the capital stock
of any acquired or newly formed corporation, partnership, limited
liability company or other business entity is owned directly by
Holdings or a U.S. Wholly-Owned Subsidiary of Holdings, and (C) all
actions required to be taken with respect to such acquired or newly
formed Subsidiary under Section 7.13 or as otherwise required under
Section 7.14 shall have been taken, and (vii) in the case of any
Significant Acquisition, the Majority Banks shall have consented in
writing to the consummation of such Acquisition.
"PERMITTED ADDITIONAL SUBORDINATED DEBT" has the meaning
specified in Section 8.05(i).
"PERMITTED CAPITAL EXPENDITURE CARRY-FORWARD" means, for any
fiscal year, the Dollar amount equal to (a) the maximum Dollar amount
of Capital Expenditures permitted to be incurred by Holdings and its
Subsidiaries in such fiscal year under Section 8.13 MINUS (b) the
Dollar amount of Capital Expenditures actually incurred by Holdings and
its Subsidiaries in such fiscal year.
"PERMITTED LIENS" has the meaning specified in Section 8.01.
"PERMITTED SWAP OBLIGATIONS" means all obligations (contingent
or otherwise) of Holdings or any Subsidiary existing or arising under
Swap Contracts, PROVIDED that each of the following criteria is
satisfied: (a) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments or assets
held or reasonably anticipated by such Person, or changes in the value
of securities issued by such Person in conjunction with a securities
repurchase program not otherwise prohibited hereunder, and not for
purposes of speculation or taking a "market view;" (b) such Swap
Contracts do not contain (i) any provision ("walk-away" provision)
exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party, or (ii)
any provision creating or permitting the declaration of an event of
default, termination event or similar event upon the occurrence of an
Event of Default hereunder (other than an Event of Default under
subsection 9.01(a)).
"PERSON" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
any other entity of whatever nature.
"PLAN" means an employee benefit plan (as defined in Section
3(3) of ERISA) which Holdings or the Company sponsors or maintains or
to which Holdings or the Company makes, is making, or is obligated to
make contributions and includes any Pension Plan.
20
"PLEDGED COLLATERAL" means the "Pledged Collateral" as defined
in the Security Agreement and shall include all products and Proceeds
(as defined in the Security Agreement) of the Pledged Collateral.
"PRO RATA SHARE" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of (a) in the case of the Revolving
Commitments or the Revolving Loans, such Bank's Revolving Commitment
divided by the combined Revolving Commitments of all Banks (or, if all
Revolving Commitments have been terminated, the aggregate principal
amount of such Bank's Revolving Loans divided by the aggregate
principal amount of the Revolving Loans then held by all Banks), and
(b) in the case of the Term Commitments or the Term Loans, such Bank's
Term Commitment divided by the combined Term Commitments of all Banks
(or, if all Term Commitments have been terminated, the aggregate
principal amount of such Bank's Term Loans divided by the aggregate
principal amount of Term Loans then held by all Banks). The initial Pro
Rata Shares of each Bank are set forth opposite such Bank's name in
SCHEDULE 2.01 under the heading "Pro Rata Share (Revolving
Commitments)" and "Pro Rata Share (Term Commitments)."
"REIMBURSEMENT DATE" has the meaning specified in Section
3.03.
"REPLACEMENT BANK" has the meaning specified in Section 4.07.
"REPORTABLE EVENT" means, any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"REQUIREMENT OF LAW" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority, in each case applicable
to or binding upon the Person or any of its property or to which the
Person or any of its property is subject.
"RESPONSIBLE OFFICER" means as to any Person, the chief
executive officer or the president of such Person, or any other officer
having substantially the same authority and responsibility; or, with
respect to compliance with financial covenants, the chief financial
officer or the treasurer of such Person, or any other officer having
substantially the same authority and responsibility.
"REVOLVING COMMITMENT," as to each Bank, has the meaning
specified in subsection 2.01(b).
"REVOLVING LOAN" has the meaning specified in Section 2.01.
"REVOLVING NOTE" means a promissory note executed by Holdings
in favor of a Bank pursuant to subsection 2.02(b), in substantially the
form of EXHIBIT F-1
21
"REVOLVING TERMINATION DATE" means the earlier to occur of:
(a) December 7, 2004; and (b) the date on which the Revolving
Commitments terminate in accordance with the provisions of this
Agreement.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"SECURITY AGREEMENT" means a Security Agreement in
substantially the form of EXHIBIT J.
"SENIOR FUNDED DEBT" means, as of any date of determination,
all Funded Debt of Holdings and its Subsidiaries on such date which is
not subordinated in right of payment to the Obligations, on a
consolidated basis in accordance with GAAP.
"SENIOR SECURED NOTES" means the 8.10% Senior Secured Notes
due October 31, 2000 issued by the Company and the 9.18% Senior Secured
Notes due October 31, 2006 issued by the Company.
"SENIOR SUBORDINATED NOTES" has the meaning specified in
subsection 2.16(b).
"SIGNIFICANT ACQUISITION" means (a) any Acquisition by
Holdings or any Subsidiary in respect of which cash or cash equivalents
and/or assumption and/or incurrence of Indebtedness exceeding
$25,000,000 in the aggregate constitutes all or a portion of the
consideration therefor, and (b) any Acquisition by Holdings or any
Subsidiary at any time that cash or cash equivalents and/or assumption
and/or incurrence of Indebtedness exceeding $25,000,000 in the
aggregate has constituted (or, immediately after giving effect to such
Acquisition, shall have constituted) all or a portion of the
consideration for all Acquisitions by Holdings and its Subsidiaries
consummated in the then current fiscal year, in each case, excluding
any Permitted Acquisition of Xxxxx Brothers Industries, LLC.
"SPECIFIED SWAP CONTRACT" means any Swap Contract made or
entered into at any time, or in effect at any time (whether heretofore
or hereafter), whether directly or indirectly, and whether as a result
of assignment or transfer or otherwise, between Holdings and any Swap
Provider which Swap Contract is or was intended by Holdings to have
been entered into for purposes of mitigating interest rate or currency
exchange risk relating to any Loan (which intent shall conclusively be
deemed to exist if Holdings so represents to the Swap Provider in
writing), and as to which the final scheduled payment by Holdings is
not later than the Revolving Termination Date.
"STANDBY LETTER OF CREDIT" means a standby Letter of Credit
Issued for the account of Holdings to support obligations of Holdings
or any Subsidiary, contingent or otherwise.
22
"STOCKHOLDER'S EQUITY" shall mean, at any date, as applied to
Holdings, the aggregate sum of Holdings' stock, capital surplus and
retained earnings (or minus accumulated deficit), determined on a
consolidated basis in accordance with GAAP.
"STOCK PRICE GUARANTY" means a guaranty that (i) is issued by
Holdings or an Affiliate of Holdings in connection with the Acquisition
of another Person, and (ii) is for the payment of cash or issuance of
Holdings' common stock if the common stock issued by Holdings in
connection with such an Acquisition is sold for less than the price
provided for in the guaranty during its term, PROVIDED that for
purposes of determining the amount of any Stock Price Guaranty, the
amount of such guaranty shall be equal to (a) the guaranteed stock
price multiplied by the number of shares covered by the guaranty, MINUS
(b) the current fair market value of one share of Holdings' common
stock (which fair market value shall be equal to the five day trailing
average closing price for Holdings' common stock as reported by the
Nasdaq National Stock Market) multiplied by the number of shares
covered by the guaranty, PROVIDED FURTHER, that for purposes of
determining the amount of any Stock Price Guaranty which is payable
solely in common stock of Holdings, the amount of such Stock Price
Guaranty shall equal zero.
"SUBORDINATED DEBT" means (i) the Senior Subordinated Notes;
and (ii) any Permitted Additional Subordinated Debt.
"SUBORDINATED DEBT DOCUMENTS" means any documents and
instruments evidencing any Subordinated Debt.
"SUBSIDIARY" of a Person means any corporation , association,
partnership, limited liability company, joint venture or other business
entity of which more than 50% of the voting stock, membership interests
or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of Holdings.
"SURETY INSTRUMENTS" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments.
"SWAP CONTRACT" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond, note or xxxx option, interest rate
option, forward foreign exchange transaction, cap, collar or floor
transaction, currency swap, cross-currency rate swap, swaption,
currency option or any other, similar transaction (including any option
to enter into any of the foregoing) or any combination of the
foregoing, and, unless the context otherwise clearly requires, any
master agreement relating to or governing any or all of the foregoing.
23
"SWAP PROVIDER" means any Bank, or any Affiliate of any Bank,
that is at the time of determination party to a Swap Contract with
Holdings.
"SWAP TERMINATION VALUE" means, in respect of any one or more
Swap Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out
and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced
in clause (a) the amount(s) determined as the xxxx-to-market value(s)
for such Swap Contracts, as determined by Holdings based upon one or
more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include any Bank).
"SWINGLINE BANK" means BofA, in its capacity as maker of
Swingline Loans hereunder. Specific reference to the Swingline Bank
shall exclude the Swingline Bank in its capacity as a Bank hereunder.
"SWINGLINE COMMITMENT" has the meaning specified in subsection
2.06(a).
"SWINGLINE LOAN" has the meaning specified in subsection
2.06(a).
"TAXES" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the
case of each Bank and the Agent, respectively, taxes imposed on or
measured by its net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Bank or the Agent, as
the case may be, is organized or maintains a Lending Office.
"TERM COMMITMENT," as to each Bank, has the meaning specified
in subsection 2.01(a).
"TERM LOAN" has the meaning specified in subsection 2.01(a).
"TERM MATURITY DATE" means December 7, 2004.
"TERM NOTE" means a promissory note executed by Holdings in
favor of a Bank pursuant to subsection 2.02(b), in substantially the
form of EXHIBIT F-2.
"TYPE" has the meaning specified in the definition of "Loan."
"TOTAL ASSETS" means for any date the net book value of the
consolidated assets of Holdings and its Subsidiaries as of the end of
the fiscal quarter ended on or most recently prior to such date.
24
"TOTAL FUNDED DEBT" means, as of any date of determination,
all Funded Debt of Holdings and its Subsidiaries on such date, on a
consolidated basis in accordance with GAAP.
"UCC" means the Uniform Commercial Code as in effect in the
State of California.
"UNFUNDED PENSION LIABILITY" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.
"UNITED STATES" and "U.S." each means the United States of
America.
"UPDATE CERTIFICATE" means a certificate in substantially the
form of EXHIBIT K.
"U.S. SUBSIDIARY" and "U.S. WHOLLY-OWNED SUBSIDIARY" means a
Subsidiary or Wholly-Owned Subsidiary, as the case may be, that is
located in and a resident of the United States.
"WHOLLY-OWNED SUBSIDIARY" means any corporation in which
(other than directors' qualifying shares required by law) 100% of the
capital stock of each class having ordinary voting power, and 100% of
the capital stock of every other class, in each case, at the time as of
which any determination is being made, is owned, beneficially and of
record, by Holdings, or by one or more of the other Wholly-Owned
Subsidiaries, or both.
1.02 OTHER INTERPRETIVE PROVISIONS. (a) The meanings of defined
terms are equally applicable to the singular and plural forms of the defined
terms.
(b) The words "hereof," "herein," "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(d) The term "including" is not limiting and means "including
without limitation."
(e) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding," and the word "through"
means "to and including."
(f) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
25
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document (unless any such prohibitive term
has been waived), and (ii) references to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting the statute or regulation.
(g) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(h) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Agent or the Banks by way of
consent, approval or waiver shall be deemed modified by the phrase "in its/their
sole discretion."
(i) This Agreement and the other Loan Documents are the result
of negotiations among the Agent, Holdings, the Company and the other parties,
have been reviewed by counsel to the Agent, Holdings, the Company and such other
parties, and are the products of all parties. Accordingly, they shall not be
construed against the Banks or the Agent merely because of the Agent's or Banks'
involvement in their preparation.
1.03 ACCOUNTING PRINCIPLES. (a) Unless the context otherwise
clearly requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement shall be
made, in accordance with GAAP, consistently applied; PROVIDED, HOWEVER, that if
GAAP shall have been modified after the Closing Date and the application of such
modified GAAP shall have a material effect on such financial computations
(including the computations required for the purpose of determining compliance
with the covenants set forth in Article VIII), then such computations shall be
made and such financial statements, certificates and reports shall be prepared,
and all accounting terms not otherwise defined herein shall be construed, in
accordance with GAAP as in effect prior to such modification, unless and until
the Majority Banks and Holdings shall have agreed upon the terms of the
application of such modified GAAP.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of Holdings.
ARTICLE II
THE CREDITS
2.01 AMOUNTS AND TERMS OF COMMITMENTS.
(a) THE TERM CREDIT. Each Bank severally agrees, on the terms
and conditions set forth herein, to make a single loan denominated in Dollars to
Holdings (each such loan, a "TERM LOAN") on the Closing Date in an amount not to
exceed the amount set forth opposite such Bank's name on SCHEDULE 2.01 under the
26
heading "Term Commitment" (such amount, such Bank's "TERM COMMITMENT");
PROVIDED, HOWEVER, that after giving effect to any Borrowing of Term Loans, the
Effective Amount of all outstanding Revolving Loans PLUS the Effective Amount of
all Swingline Loans PLUS the Effective Amount of all L/C Obligations PLUS the
Effective Amount of all outstanding Term Loans shall not exceed the Aggregate
Commitment. Amounts borrowed as Term Loans which are repaid or prepaid by
Holdings may not be reborrowed.
(b) THE REVOLVING CREDIT. Each Bank severally agrees, on the
terms and conditions set forth herein, to make loans denominated in Dollars to
Holdings (each such loan, a "REVOLVING LOAN") from time to time on any Business
Day during the period from the Closing Date to the Revolving Termination Date,
in an aggregate amount not to exceed at any time the amount set forth opposite
such Bank's name on SCHEDULE 2.01 under the heading "Revolving Commitment" (such
amount, as the same may be reduced under Section 2.05 or Section 2.08 or reduced
or increased as a result of one or more assignments under Section 11.08, such
Bank's "REVOLVING COMMITMENT"); PROVIDED, HOWEVER, that after giving effect to
any Borrowing of Revolving Loans, (i) the Effective Amount of all outstanding
Revolving Loans and Swingline Loans and the Effective Amount of all L/C
Obligations shall not exceed an amount equal to the lesser of (1) the combined
Revolving Commitments of the Banks and (2) the Borrowing Base; and (ii) the
Effective Amount of the Revolving Loans of any Bank PLUS the participation of
such Bank in the Effective Amount of all L/C Obligations and the Effective
Amount of all Swingline Loans shall not at any time exceed such Bank's Revolving
Commitment. Within the limits of each Bank's Revolving Commitment, and subject
to the other terms and conditions hereof, Holdings may borrow under this Section
2.01, prepay under Section 2.07 and reborrow under this Section 2.01.
2.02 LOAN ACCOUNTS. (a) The Loans made by each Bank and the Letters
of Credit Issued by the Issuing Bank shall be evidenced by one or more accounts
or records maintained by such Bank or Issuing Bank, as the case may be, in the
ordinary course of business. The accounts or records maintained by the Agent,
the Issuing Bank and each Bank shall be conclusive absent manifest error of the
amount of the Loans made by the Banks to Holdings and the Letters of Credit
Issued for the account of Holdings, and the interest and payments thereon. Any
failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of Holdings hereunder to pay any amount owing
with respect to the Loans or any Letter of Credit.
(b) Upon the request of any Bank made through the Agent, the
Loans made by such Bank may be evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Bank shall endorse on the schedules annexed
to its Note(s) the date, amount and maturity of each Loan made by it and the
amount of each payment of principal made by Holdings with respect thereto. Each
such Bank is irrevocably authorized by Holdings to endorse its Note(s) and each
Bank's record shall be conclusive absent manifest error; PROVIDED, HOWEVER, that
the failure of a Bank to make, or an error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect the obligations of
Holdings hereunder or under any such Note to such Bank.
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2.03 PROCEDURE FOR BORROWING. (a) Each Borrowing of Loans shall
be made upon Holdings' irrevocable written notice delivered to the Agent in the
form of a Notice of Borrowing (which notice must be received by the Agent (i)
prior to 9:00 a.m. (San Francisco time) at least three Business Days prior to
the requested Borrowing Date, in the case of Offshore Rate Loans; and (ii) prior
to 9:00 a.m. (San Francisco time) on the requested Borrowing Date, in the case
of Base Rate Loans, specifying:
(i) the amount of the Borrowing, which shall be in a Minimum
Amount, and whether such Borrowing shall be of Term Loans or Revolving Loans;
(ii) the requested Borrowing Date, which shall be a Business
Day;
(iii) the Type of Loans comprising the Borrowing; and
(iv) if applicable, the duration of the Interest Period
applicable to such Loans included in such notice, subject to the provisions of
the definition of "Interest Period" herein. If the Notice of Borrowing fails to
specify the duration of the Interest Period for any Borrowing comprised of
Offshore Rate Loans, such Interest Period shall be one month;
PROVIDED, HOWEVER, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Agent not later than
10:00 a.m. (San Francisco time) one Business Day before the Closing Date and
such Borrowing will consist of Base Rate Loans only; and FURTHER PROVIDED that
if so requested by the Agent, all Borrowings during the first 60 days following
the Closing Date shall have the same Interest Period and shall be Base Rate
Loans or Offshore Rate Loans for Interest Periods no longer than one month.
(b) The Agent will promptly notify each Bank of its receipt of
any Notice of Borrowing and of the amount of such Bank's Pro Rata Share of that
Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of
each Borrowing available to the Agent for the account of Holdings at the Agent's
Payment Office by 11:00 a.m. (San Francisco time) on the Borrowing Date
requested by Holdings in funds immediately available to the Agent. The proceeds
of each such Borrowing will then be made available to Holdings by the Agent at
such office by crediting the account of Holdings on the books of BofA with the
aggregate of the amounts made available to the Agent by the Banks and in like
funds as received by the Agent, or if requested by Holdings, by wire transfer in
accordance with written instructions provided to the Agent by Holdings of such
funds as received by the Agent, unless on the date of the Borrowing all or any
portion of the proceeds thereof shall then be required to be applied to the
repayment of any outstanding Loans, in which case such proceeds or portion
thereof shall be applied to the payment of such Loans.
(d) After giving effect to any Borrowing, unless the Agent
shall otherwise consent, there may not be more than eight different Interest
Periods in effect.
2.04 CONVERSION AND CONTINUATION ELECTIONS. (a) Holdings may, upon
irrevocable written notice to the Agent in accordance with subsection 2.04(b):
28
(i) elect, as of any Business Day, in the case of Base Rate
Loans, or as of the last day of the applicable Interest Period, in the case of
any Offshore Rate Loans, to convert any such Loans (or any part thereof in a
Minimum Amount) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Revolving Loans or Term Loans having Interest Periods
expiring on such day (or any part thereof in a Minimum Amount);
PROVIDED that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $5,000,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of Holdings to continue such Loans as, and convert such Loans into, Offshore
Rate Loans, shall terminate.
(b) Holdings shall deliver a Notice of Conversion/Continuation
to be received by the Agent (i) not later than 9:00 a.m. (San Francisco time) at
least three Business Days in advance of the Conversion/ Continuation Date, if
the Loans are to be converted into or continued as Offshore Rate Loans; and (ii)
prior to 9:00 a.m. (San Francisco time) on the Conversion/Continuation Date, if
the Loans are to be converted into Base Rate Loans, specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or
continued;
(iii) the Type of Loans resulting from the proposed conversion
or continuation; and
(iv) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period, subject to the provisions
of the definition of "Interest Period" herein.
(c) If upon the expiration of any Interest Period applicable
to Offshore Rate Loans, Holdings has failed to select timely a new Interest
Period to be applicable to such Offshore Rate Loans, as the case may be, or if
any Default or Event of Default then exists, Holdings shall be deemed to have
elected to convert such Offshore Rate Loans into Base Rate Loans effective as of
the expiration date of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of
a Notice of Conversion/Continuation, or, if no timely notice is provided by
Holdings, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
29
(e) Unless the Majority Banks otherwise consent, during the
existence of a Default or Event of Default, Holdings may not elect to have a
Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, unless the Agent shall otherwise consent, there may not be more than
eight different Interest Periods in effect.
2.05 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. (a)
Holdings may, upon not less than three Business Days' prior notice to the Agent,
terminate the Revolving Commitments, or permanently reduce the Revolving
Commitments, PROVIDED that the aggregate amount of any partial reduction is in a
Minimum Amount; unless, after giving effect thereto and to any prepayments of
any Loans made on the effective date thereof, (i) the Effective Amount of all
Revolving Loans, Swingline Loans and L/C Obligations together would exceed the
amount of the combined Revolving Commitments of the Banks then in effect, or
(ii) the Effective Amount of all L/C Obligations then outstanding would exceed
the L/C Commitment. Once reduced in accordance with this Section 2.05, the
Revolving Commitments may not be increased. Any reduction of the Revolving
Commitments shall be applied to each Bank according to its Pro Rata Share. If
and to the extent specified by Holdings in the notice to the Agent, some or all
of the reduction in the Revolving Commitments shall be applied to reduce the L/C
Commitment. All accrued commitment and letter of credit fees to, but not
including, the effective date of any reduction or termination of Revolving
Commitments, shall be paid on the effective date of such reduction or
termination.
(b) At no time shall the Swingline Commitment exceed the
combined Revolving Commitments of the Banks, and any reduction of the Revolving
Commitments which reduces combined Revolving Commitments of the Banks below the
then-current amount of the Swingline Commitment shall result in an automatic
corresponding reduction of the Swingline Commitment to the amount of the
combined Revolving Commitments of the Banks, as so reduced, without any action
on the part of the Swingline Bank.
2.06 SWINGLINE LOANS. Subject to the terms and conditions hereof,
the Swingline Bank agrees to make a portion of the Revolving Commitment
available to Holdings by making swingline loans denominated in Dollars
(individually, a "SWINGLINE LOAN", and, collectively, the "SWINGLINE LOANS") to
Holdings on any Business Day during the period from the Closing Date to the
Revolving Termination Date in accordance with the procedures set forth in this
Section 2.06 in an aggregate principal amount at any one time outstanding not to
exceed Five Million Dollars ($5,000,000), notwithstanding the fact that such
Swingline Loans, when aggregated with any other Credit Extensions made by or
participated in by the Swingline Bank, may exceed the Swingline Bank's Revolving
Commitment (the amount of such commitment of the Swingline Bank to make
Swingline Loans to Holdings pursuant to this subsection 2.06(a), as the same
shall be reduced pursuant to Section 2.05 or 2.08 or as a result of any
assignment pursuant to Section 11.08, the Swingline Bank's "SWINGLINE
COMMITMENT"); PROVIDED that at no time shall (i) the sum of the Effective Amount
of all Swingline Loans PLUS the Effective Amount of all Revolving Loans PLUS the
Effective Amount of all L/C Obligations exceed the combined Revolving
Commitments of the Banks, or (ii) the Effective Amount of all Swingline Loans
30
exceed the Swingline Commitment. Additionally, no more than three Swingline
Loans may be outstanding at any one time, and all Swingline Loans shall at all
times accrue interest at the Base Rate or at such other rate as may be agreed to
by the Swingline Bank and Holdings. Within the foregoing limits, and subject to
the other terms and conditions hereof, Holdings may borrow under this subsection
2.06(a), prepay pursuant to Section 2.07 and reborrow pursuant to this
subsection 2.06(a).
(b) Holdings shall provide the Agent irrevocable written
notice (including notice via facsimile confirmed immediately by a telephone
call) in the form of a Notice of Borrowing of any Swingline Loan requested
hereunder (which notice must be received by the Agent prior to 9:00 a.m. (San
Francisco time) on the requested Borrowing Date) specifying (i) the amount to be
borrowed, which shall be in a Minimum Amount, and (ii) the requested Borrowing
Date, which shall be a Business Day. Unless the Swingline Bank has received
notice prior to 9:00 a.m. (San Francisco time) on such Borrowing Date from the
Agent (including at the request of any Bank) (A) directing the Swingline Bank
not to make the requested Swingline Loan as a result of the limitations set
forth in the PROVISO set forth in the first sentence of subsection 2.06(a); or
(B) that one or more conditions specified in Article V are not then satisfied;
THEN, subject to the terms and conditions hereof, the Swingline Bank will, not
later than 12:00 noon (San Francisco time) on the Borrowing Date specified in
such Notice of Borrowing, make the amount of its Swingline Loan available to
Holdings by crediting the account of Holdings on the books of BofA or if
requested by Holdings, by wire transfer in accordance with written instructions
provided to the Agent by Holdings. The Agent will notify the Banks on a
quarterly basis if any Swingline Loan Borrowings occurred during such quarter.
(c) Holdings shall repay to the Swingline Bank in full on the
Revolving Termination Date the aggregate principal amount of the Swingline Loans
outstanding on the Revolving Termination Date.
(d) For one Business Day during each successive seven Business
Day period the aggregate principal amount of Swingline Loans shall be $0 (a
"CLEAN-UP DAY"). Holdings shall prepay the outstanding principal amount of the
Swingline Loans in whole to the extent required so that a Clean-Up Day may occur
in each such seven Business Day period as provided in this subsection 2.06(d)
(which Swingline Loans may not be reborrowed until such Clean-Up Day has ended).
(e) If:
(i) any Swingline Loans shall remain outstanding at 4:00 p.m.
(San Francisco time) on the Business Day immediately prior to a Clean-Up Day and
by such time on such Business Day the Agent shall have received neither: (A) a
Notice of Borrowing delivered pursuant to Section 2.03 requesting that Revolving
Loans be made pursuant to subsection 2.01 on the Clean-Up Day in an amount at
least equal to the aggregate principal amount of such Swingline Loans; nor (B)
any other notice indicating Holdings' intent to repay such Swingline Loans with
funds obtained from other sources; or
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(ii) any Swingline Loans shall remain outstanding during the
existence of an Event of Default and the Swingline Bank shall in its sole
discretion notify the Agent that the Swingline Bank desires that such Swingline
Loans be converted into Revolving Loans;
THEN the Agent shall be deemed to have received a Notice of Borrowing from
Holdings pursuant to Section 2.03 requesting that Base Rate Loans be made
pursuant to subsection 2.01 on such Clean-Up Day (in the case of the
circumstances described in clause (i) above) or on the first Business Day
subsequent to the date of such notice from the Swingline Bank (in the case of
the circumstances described in clause (ii) above) in an amount equal to the
aggregate amount of such Swingline Loans, and the procedures set forth in
subsections 2.03(b) and 2.03(c) shall be followed in making such Base Rate
Loans; PROVIDED, that such Base Rate Loans shall be made notwithstanding
Holdings' failure to comply with Section 5.02; and PROVIDED, FURTHER, that if a
Borrowing of Revolving Loans becomes legally impracticable and if so required by
the Swingline Bank at the time such Revolving Loans are required to be made by
the Banks in accordance with this subsection 2.06(e), each Bank agrees that in
lieu of making Revolving Loans as described in this subsection 2.06(e), such
Bank shall purchase a participation from the Swingline Bank in the applicable
Swingline Loans in an amount equal to such Bank's Pro Rata Share of such
Swingline Loans, and the procedures set forth in subsections 2.03(b) and 2.03(c)
shall be followed in connection with the purchases of such participations. Upon
such purchases of participations the prepayment requirements of subsection
2.06(d) shall be deemed waived with respect to such Swingline Loans. If any
Swingline Loan shall remain outstanding in lieu of a Borrowing of Revolving
Loans as provided above, interest on such Swingline Loan shall be due and
payable on demand and shall accrue at the rate then applicable to Base Rate
Loans. The proceeds of such Base Rate Loans, or participations purchased, shall
be applied to repay such Swingline Loans. A copy of each notice given by the
Agent to the Banks pursuant to this subsection 2.06(e) with respect to the
making of Revolving Loans, or the purchases of participations, shall be promptly
delivered by the Agent to Holdings. Each Bank's obligation in accordance with
this Agreement to make the Revolving Loans, or purchase the participations, as
contemplated by this subsection 2.06(e), shall be absolute and unconditional and
shall not be affected by any circumstance, including (1) any set-off,
counterclaim, recoupment, defense or other right which such Bank may have
against the Swingline Bank, Holdings or any other Person for any reason
whatsoever; (2) the occurrence or continuance of a Default, an Event of Default
or a Material Adverse Effect; or (3) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.07 OPTIONAL PREPAYMENTS. Subject to Section 4.04, Holdings may,
at any time or from time to time, upon not less than three Business Days'
irrevocable notice to the Agent, ratably prepay Loans in whole or in part, in
Minimum Amounts. Such notice of prepayment shall specify the date and amount of
such prepayment, whether such prepayment of Loans is of Term Loans, Revolving
Loans or Swingline Loans (or a combination thereof) and the Type(s) of Loans to
be prepaid. The Agent will promptly notify the Swingline Bank (in the case of
any prepayment of Swingline Loans) and each Bank of its receipt of any such
notice, and of such Bank's Pro Rata Share of such prepayment. If such notice is
given by Holdings, Holdings shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein,
together with (other than in the case of Base Rate Loans) accrued interest to
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each such date on the amount prepaid and any amounts required pursuant to
Section 4.04. Optional prepayments of Term Loans shall be applied to reduce the
Term Loans with respect to each remaining installment of principal pro rata in
accordance with the then remaining installments payable under subsection
2.09(a).
2.08 MANDATORY PREPAYMENTS OF LOANS; MANDATORY COMMITMENT
REDUCTIONS. (a) If on the Closing Date the aggregate Term Commitments shall
exceed the outstanding principal amount of the Term Loans made, such unused
portion of the Term Commitments shall automatically terminate on the Closing
Date.
(b) If at any time the Effective Amount of Revolving Loans and
Swingline Loans PLUS the Effective Amount of any L/C Obligations shall exceed
the Borrowing Base, Holdings, within 15 Business Days of the earlier of (i) the
date a Responsible Officer of Holdings became aware of such excess, and (ii)
notice from the Agent informing Holdings of the existence of such excess, shall
prepay the outstanding principal amount of the Loans and any L/C Advances, in an
amount equal to such excess and, if necessary (after giving effect to such
prepayment), shall also Cash Collateralize outstanding Letters of Credit in an
amount equal to the excess of the maximum amount then available to be drawn
under the Letters of Credit over the Borrowing Base.
(c) If on any date the Effective Amount of L/C Obligations
exceeds the L/C Commitment, Holdings shall Cash Collateralize on such date the
outstanding Letters of Credit in an amount equal to the excess of the maximum
amount then available to be drawn under the Letters of Credit over the Aggregate
L/C Commitment.
(d) If on any date (after giving effect to any Cash
Collateralization made on such date pursuant to subsection 2.08(b)), the
Effective Amount of all Revolving Loans and Swingline Loans then outstanding
PLUS the Effective Amount of all L/C Obligations exceeds the combined Revolving
Commitments of the Banks, Holdings shall immediately, and without notice or
demand, prepay the outstanding principal amount of the Revolving Loans,
Swingline Loans and L/C Advances by an amount equal to the applicable excess.
(e) If Holdings, the Company or any other Subsidiary shall at
any time or from time to time make or agree to make a Disposition, then (i)
Holdings shall promptly notify the Agent in advance of such Disposition
(including the amount of the estimated Net Proceeds to be received by Holdings,
the Company or such other Subsidiary in respect thereof) and (ii) if, after
giving effect to such Disposition, the Net Proceeds of all Dispositions which
have occurred in such fiscal year are greater than $1,000,000 in the aggregate,
then promptly upon, and in no event later than one Business Day after, receipt
by Holdings, the Company or the other Subsidiary of the Net Proceeds of such
Disposition, Holdings shall prepay Term Loans in an aggregate amount equal to
the amount of all Net Proceeds received by Holdings, the Company or any other
Subsidiary on account of all Dispositions which have occurred in such fiscal
year less the amount, if any, of Net Proceeds already so applied in such fiscal
year.
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(f) If Holdings, the Company or any other Subsidiary shall at
any time or from time to time issue any debt or equity securities for cash
consideration in excess of $5,000,000, then (i) Holdings shall promptly notify
the Agent in advance of the estimated Net Issuance Proceeds of such issuance and
(ii) promptly upon, and in no event later than one Business Day after, receipt
by Holdings, the Company or the other Subsidiary of the Net Issuance Proceeds of
such issuance, Holdings shall prepay Term Loans in an aggregate amount equal to
the amount of all Net Issuance Proceeds received by Holdings, the Company or any
such other Subsidiary on account of such issuance.
(g) Any prepayments pursuant to this Section 2.08 shall be
subject to Section 4.04 and applied, first, to Swingline Loans (only if such
prepayment is pursuant to Subsection 2.08(b)) then outstanding, second, to any
Base Rate Loans then outstanding and then to Offshore Rate Loans with the
shortest Interest Periods remaining; PROVIDED, HOWEVER, that if the amount of
Swingline Loans and Base Rate Loans then outstanding is not sufficient to
satisfy the entire prepayment requirement, Holdings may, at its option, place
any amounts which it would otherwise be required to use to prepay Offshore Rate
Loans on a day other than the last day of the Interest Period therefor in an
interest-bearing account pledged to the Agent for the benefit of the Banks until
the end of such Interest Period at which time such pledged amounts will be
applied to prepay such Offshore Rate Loans. Holdings shall pay, together with
each prepayment under this Section 2.08, accrued interest on the amount of any
Offshore Rate Loans prepaid and any amounts required pursuant to Section 4.04.
Prepayments of Term Loans pursuant to this Section 2.08 shall be applied to
reduce the Term Loans with respect to each remaining installment of principal
thereof pro rata in accordance with the then remaining installments payable
under subsection 2.09(a).
2.09 REPAYMENT. (a) THE TERM LOANS. Holdings shall repay to the
Agent for the account of the Banks the aggregate principal amount of Term Loans
in quarterly installments on the last Business Day of each calendar quarter
(each a "PRINCIPAL PAYMENT DATE"), commencing on December 31, 2000, in the
amounts set forth on Schedule 2.09 hereto:
(b) THE REVOLVING LOANS AND SWINGLINE LOANS. Holdings shall
repay to the Agent for the account of the Banks on the Revolving Termination
Date the aggregate principal amount of Revolving Loans and Swingline Loans
outstanding on such date.
2.10 INTEREST (a) (i) Each Revolving Loan and Term Loan shall bear
interest on the outstanding principal amount thereof from the applicable
Borrowing Date at a rate per annum equal to the Offshore Rate or the Base Rate,
as the case may be (and subject to Holdings' right to convert to other Types of
Loans under Section 2.04), PLUS the Applicable Margin; and (ii) each Swingline
Loan shall bear interest on the outstanding principal amount thereof from the
applicable Borrowing Date at a rate per annum equal to the Base Rate plus the
Applicable Margin, or at such other rate as may be agreed to by the Swingline
Bank.
(b) Interest on each Revolving Loan, Term Loan and Swingline
Loan shall be paid in arrears on each Interest Payment Date. Interest shall also
be paid on the date of any prepayment of Loans (other than Base Rate Loans)
under Section 2.07 or 2.08 for the portion of such Loans so prepaid and upon
34
payment (including prepayment) in full thereof and, during the existence of any
Event of Default, interest shall be paid on demand of the Agent at the request
or with the consent of the Majority Banks.
(c) Notwithstanding subsection (a) of this Section, while any
Event of Default exists or after acceleration, Holdings shall pay interest
(after as well as before entry of judgment thereon to the extent permitted by
law) on the principal amount of all outstanding Obligations, at a rate per annum
which is determined by adding 2% per annum to the Applicable Margin then in
effect for such Loans and, in the case of Obligations not subject to an
Applicable Margin, at a rate per annum equal to the Base Rate plus the
Applicable Margin then in effect for Base Rate Loans, PLUS 2% per annum;
PROVIDED, HOWEVER, that on and after the expiration of any Interest Period
applicable to any Offshore Rate Loan outstanding on the date of occurrence of
such Event of Default or acceleration, the principal amount of such Loan shall,
during the continuation of such Event of Default or after acceleration, bear
interest at a rate per annum equal to the Base Rate, PLUS the Applicable Margin
then in effect for Base Rate Loans, PLUS 2% per annum.
(d) Anything herein to the contrary notwithstanding, the
obligations of Holdings to any Bank hereunder shall be subject to the limitation
that payments of interest shall not be required for any period for which
interest is computed hereunder, to the extent (but only to the extent) that
contracting for or receiving such payment by such Bank would be contrary to the
provisions of any law applicable to such Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or received by such Bank,
and in such event Holdings shall pay such Bank interest at the highest rate
permitted by applicable law.
2.11 FEES. In addition to certain fees described in Section 3.08:
(a) ARRANGEMENT AND AGENCY FEES. Holdings shall pay an
arrangement fee to the Lead Arranger for the Lead Arranger's own account, and
shall pay an agency fee to the Agent for the Agent's own account, as required by
the letter agreement (the "FEE LETTER") between Holdings and the Lead Arranger
and Agent dated September 27, 1999.
(b) COMMITMENT FEES. Holdings shall pay to the Agent for the
account of each Bank a commitment fee on the actual daily unused portion of such
Bank's Revolving Commitment (the "AVAILABLE COMMITMENT"), computed on a
quarterly basis in arrears on the last Business Day of each calendar quarter
based upon the daily utilization for that quarter as calculated by the Agent at
a rate per annum equal to the Applicable Fee Amount. For purposes of calculating
the Available Commitment under this Section 2.11, the Revolving Commitments
shall be deemed used to the extent of the Effective Amount of Revolving Loans
then outstanding, plus the Effective Amount of L/C Obligations then outstanding
(other than L/C Obligations consisting of the aggregate undrawn amount of all
Commercial Letters of Credit then outstanding). Swingline Loans shall not
constitute utilization. Such commitment fee shall accrue from the Closing Date
to the Revolving Termination Date and shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter commencing on December
31, 1999, to the Revolving Termination Date, with the final payment to be made
on the Revolving Termination Date; PROVIDED that in connection with any
35
termination of Commitments hereunder, the accrued commitment fee calculated for
the period ending on such date shall also be paid on the date of termination.
The commitment fees provided in this subsection shall accrue at all times after
the above-mentioned commencement date, including at any time during which one or
more conditions in Article V are not met.
2.12 COMPUTATION OF FEES AND INTEREST. (a) All computations of
interest for Base Rate Loans when the Base Rate is determined by BofA's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more interest being paid than if computed on the basis of a 365-day year).
Interest and fees shall accrue during each period during which interest or such
fees are computed from the first day thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall
be conclusive and binding on Holdings and the Banks in the absence of manifest
error. The Agent will, at the request of Holdings or any Bank, deliver to
Holdings or the Bank, as the case may be, a statement showing the quotations
used by the Agent in determining any interest rate and the resulting interest
rate.
2.13 PAYMENTS BY HOLDINGS. (a) All payments to be made by Holdings
shall be made without set-off, recoupment or counterclaim. Except as otherwise
expressly provided herein, all payments by Holdings shall be made to the Agent
for the account of the Banks at the Agent's Payment Office, and shall be made in
Dollars and in immediately available funds, no later than 11:00 a.m. (San
Francisco time) on the date specified herein. The Agent will promptly distribute
to each Bank its Pro Rata Share (or other applicable share as expressly provided
herein) of such payment in like funds as received. Any payment received by the
Agent later than 11:00 a.m. (San Francisco time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee shall
continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Agent receives notice from Holdings prior to
the date on which any payment is due to the Banks that Holdings will not make
such payment in full as and when required, the Agent may assume that Holdings
has made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent Holdings has not made such
payment in full to the Agent, each Bank shall repay to the Agent on demand such
amount distributed to such Bank, together with interest thereon at the Federal
Funds Rate for each day from the date such amount is distributed to such Bank
until the date repaid.
2.14 PAYMENTS BY THE BANKS TO THE AGENT. (a) Unless the Agent
receives notice from a Bank on or prior to the Closing Date or, with respect to
any Borrowing after the Closing Date, at least one Business Day prior to the
36
date of such Borrowing, that such Bank will not make available as and when
required hereunder to the Agent for the account of Holdings the amount of that
Bank's Pro Rata Share of the Borrowing, the Agent may assume that each Bank has
made such amount available to the Agent in immediately available funds on the
Borrowing Date and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to Holdings on such date a corresponding
amount. If and to the extent any Bank shall not have made its full amount
available to the Agent in immediately available funds and the Agent in such
circumstances has made available to Holdings such amount, that Bank shall on the
Business Day following such Borrowing Date make such amount available to the
Agent, together with interest at the Federal Funds Rate for each day during such
period. A notice of the Agent submitted to any Bank with respect to amounts
owing under this subsection (a) shall be conclusive, absent manifest error. If
such amount is so made available, such payment to the Agent shall constitute
such Bank's Loan on the date of Borrowing for all purposes of this Agreement. If
such amount is not made available to the Agent on the Business Day following the
Borrowing Date, the Agent will notify Holdings of such failure to fund and, upon
demand by the Agent, Holdings shall pay such amount to the Agent for the Agent's
account, together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a Loan
on such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
2.15 SHARING OF PAYMENTS, ETC. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Banks such participations in the
Loans made by them as shall be necessary to cause such purchasing Bank to share
the excess payment pro rata with each of them; PROVIDED, HOWEVER, that if all or
any portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank shall
repay to the purchasing Bank the purchase price paid therefor, together with an
amount equal to such paying Bank's ratable share (according to the proportion of
(i) the amount of such paying Bank's required repayment to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered.
Holdings agrees that any Bank so purchasing a participation from another Bank
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 11.10) with respect to
such participation as fully as if such Bank were the direct creditor of Holdings
in the amount of such participation. The Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks following
any such purchases or repayments.
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2.16 SECURITY AND GUARANTY. (a) All obligations of Holdings under
this Agreement, the Notes and all other Loan Documents shall be secured in
accordance with the Collateral Documents.
(b) All Collateral other than the Pledged Collateral shall be
released by the Agent and the Banks upon receipt by Holdings of not less than
$100,000,000 of Net Issuance Proceeds from the issuance by Holdings of senior
subordinated debt securities constituting Permitted Additional Subordinated Debt
(the "SENIOR SUBORDINATED NOTES"), PROVIDED that (i) any Term Loans then
outstanding, and all interest and other amounts owing with respect thereto,
shall be concurrently repaid in full, and (ii) the Agent shall have received
from Holdings a completed Compliance Certificate demonstrating pro forma
compliance (after giving effect to the issuance of the Senior Subordinated
Notes) with the financial covenants set forth at Section 8.19 hereof (including
the maximum Senior Funded Debt to Capitalization ratio required under subsection
8.19(b)) as of the last day of the then immediately preceding fiscal quarter.
(c) All obligations of Holdings under this Agreement, each of
the Notes and all other Loan Documents to which it is a party shall be
unconditionally guaranteed by each Guarantor pursuant to its Guaranty.
ARTICLE III
THE LETTERS OF CREDIT
3.01 THE LETTER OF CREDIT SUBFACILITY. (a) On the terms and
conditions set forth herein (i) the Issuing Bank agrees, (A) from time to time
on any Business Day during the period from the Closing Date to the Revolving
Termination Date to issue Letters of Credit for the account of Holdings, and to
amend or renew Letters of Credit previously issued by it, in accordance with
subsections 3.02(c) and 3.02(d), and (B) to honor drafts under the Letters of
Credit; and (ii) the Banks severally agree to participate in Letters of Credit
Issued for the account of Holdings; PROVIDED that the Issuing Bank shall not be
obligated to Issue, and no Bank shall be obligated to participate in, any Letter
of Credit if such Letter of Credit is not denominated in Dollars or if as of the
date of Issuance of such Letter of Credit and after giving effect thereto (the
"ISSUANCE DATE") (1) the Effective Amount of all L/C Obligations PLUS the
Effective Amount of all Revolving Loans and Swingline Loans shall exceed an
amount equal to the lesser of (a) the combined Revolving Commitments and (b) the
Borrowing Base, (2) the participation of any Bank in the Effective Amount of all
L/C Obligations and in the Effective Amount of all Swingline Loans PLUS the
Effective Amount of the Revolving Loans of such Bank shall exceed such Bank's
Revolving Commitment, or (3) the Effective Amount of L/C Obligations shall
exceed the L/C Commitment. Within the foregoing limits, and subject to the other
terms and conditions hereof, Holdings ability to obtain Letters of Credit shall
be fully revolving, and, accordingly, Holdings may, during the foregoing period,
obtain Letters of Credit to replace Letters of Credit which have expired or
which have been drawn upon and reimbursed.
(b) The Issuing Bank is under no obligation to Issue any
Letter of Credit if:
38
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain the
Issuing Bank from Issuing such Letter of Credit, or any Requirement of Law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from,
the Issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the Issuing
Bank is not otherwise compensated hereunder) not in effect on the Closing Date,
or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which the Issuing Bank in good
xxxxx xxxxx material to it;
(ii) the Issuing Bank has received written notice from any
Bank, the Agent or Holdings, on or prior to the Business Day prior to the
requested date of Issuance of such Letter of Credit, that one or more of the
applicable conditions contained in Article V is not then satisfied;
(iii) the expiry date of any requested Letter of Credit is (A)
more than 365 days after the date of Issuance, unless the Majority Banks have
approved such expiry date in writing, or (B) after the Revolving Termination
Date, unless all of the Banks have approved such expiry date in writing;
(iv) the expiry date of any requested Letter of Credit is
prior to the maturity date of any financial obligation to be supported by the
requested Letter of Credit;
(v) any requested Letter of Credit does not provide for
drafts, or is not otherwise in form and substance acceptable to the Issuing
Bank, or the Issuance of a Letter of Credit shall violate any applicable
policies of the Issuing Bank;
(vi) any Standby Letter of Credit is for the purpose of
supporting the issuance of any letter of credit by any other Person;
(vii) any Standby Letter of Credit is in a face amount less
than $1,000,000; or
(viii) any requested Letter of Credit is to be denominated in a
currency other than Dollars.
(c) Letters of Credit issued under this Article III shall be
either Commercial Letters of Credit or Standby Letters of Credit.
3.02 ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS OF CREDIT. (a) Each
Letter of Credit shall be issued upon the irrevocable written request of
Holdings received by the Issuing Bank (with a copy sent by Holdings to the
Agent) at least four Business Days (or such shorter time as the Issuing Bank may
agree in a particular instance in its sole discretion) prior to the proposed
date of issuance. Each such request for issuance of a Letter of Credit shall be
by facsimile, confirmed immediately in an original writing, in the form of an
L/C Application, and shall specify in form and detail satisfactory to the
39
Issuing Bank: (i) the proposed date of issuance of the Letter of Credit (which
shall be a Business Day); (ii) the face amount of the Letter of Credit; (iii)
the expiry date of the Letter of Credit; (iv) the name and address of the
beneficiary thereof; (v) the documents to be presented by the beneficiary of the
Letter of Credit in case of any drawing thereunder; (vi) the full text of any
certificate to be presented by the beneficiary in case of any drawing
thereunder; and (vii) such other matters as the Issuing Bank may require.
(b) At least two Business Days prior to the Issuance of any
Letter of Credit, the Issuing Bank will confirm with the Agent (by telephone or
in writing) that the Agent has received a copy of the L/C Application or L/C
Amendment Application from Holdings and, if not, the Issuing Bank will provide
the Agent with a copy thereof. Unless the Issuing Bank has received notice on or
before the Business Day immediately preceding the date the Issuing Bank is to
issue a requested Letter of Credit from the Agent (A) directing the Issuing Bank
not to issue such Letter of Credit because such issuance is not then permitted
under subsection 3.01(a) as a result of the limitations set forth in clauses (1)
through (3) thereof or subsection 3.01(b)(ii); or (B) that one or more
conditions specified in Article V are not then satisfied; then, subject to the
terms and conditions hereof, the Issuing Bank shall, on the requested date,
issue a Letter of Credit for the account of Holdings in accordance with the
Issuing Bank's usual and customary business practices.
(c) From time to time while a Letter of Credit is outstanding
and prior to the Revolving Termination Date, the Issuing Bank will, upon the
written request of Holdings received by the Issuing Bank (with a copy sent by
Holdings to the Agent) at least four Business Days (or such shorter time as the
Issuing Bank may agree in a particular instance in its sole discretion) prior to
the proposed date of amendment (including a renewal or extension thereof), amend
any Letter of Credit issued by it. Each such request for amendment of a Letter
of Credit shall be made by facsimile, confirmed immediately in an original
writing, made in the form of an L/C Amendment Application and shall specify in
form and detail satisfactory to the Issuing Bank: (i) the Letter of Credit to be
amended; (ii) the proposed date of amendment of the Letter of Credit (which
shall be a Business Day); (iii) the nature of the proposed amendment; and (iv)
such other matters as the Issuing Bank may require. The Issuing Bank shall be
under no obligation to amend any Letter of Credit if: (A) the Issuing Bank would
have no obligation at such time to issue such Letter of Credit in its amended
form under the terms of this Agreement; or (B) the beneficiary of any such
Letter of Credit does not accept the proposed amendment to the Letter of Credit.
The Agent will promptly notify the Banks of the Issuance of any Standby Letter
of Credit notified to it by the Issuing Bank. The Banks acknowledge and agree
that the Agent will not notify them of the receipt by the Agent of any L/C
Application or L/C Amendment Application or of the Issuance of any Commercial
Letter of Credit. From time to time the Agent will notify the Banks of the
amount of all outstanding Letters of Credit hereunder.
(d) The Issuing Bank and the Banks agree that, while a Letter
of Credit is outstanding and prior to the Revolving Termination Date, the
Issuing Bank shall be entitled to authorize the renewal of any Letter of Credit
issued by it. The Issuing Bank shall be under no obligation so to renew any
Letter of Credit if: (A) the Issuing Bank would have no obligation at such time
40
to issue or amend such Letter of Credit in its renewed form under the terms of
this Agreement; or (B) the beneficiary of any such Letter of Credit does not
accept the proposed renewal of the Letter of Credit. If any outstanding Letter
of Credit shall provide that it shall be automatically renewed unless the
beneficiary thereof receives notice from the Issuing Bank that such Letter of
Credit shall not be renewed, and if at the time of renewal the Issuing Bank
would be entitled to authorize the renewal of such Letter of Credit in
accordance with this subsection 3.02(d) upon the request of Holdings but the
Issuing Bank shall not have received any written direction by Holdings with
respect thereto, the Issuing Bank shall nonetheless be permitted to allow such
Letter of Credit to renew, and Holdings and the Banks hereby authorize such
renewal, and, accordingly, the Issuing Bank shall be deemed to have received an
L/C Amendment Application from Holdings requesting such renewal.
(e) The Issuing Bank may, at its election (or as required by
the Agent at the direction of the Majority Banks), deliver any notices of
termination or other communications to any Letter of Credit beneficiary or
transferee, and take any other action as necessary or appropriate, at any time
and from time to time, in order to cause the expiry date of such Letter of
Credit to be a date not later than the Revolving Termination Date.
(f) This Agreement shall control in the event of any conflict
with any L/C-Related Document (other than any Letter of Credit).
(g) The Issuing Bank will also deliver to the Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or amendment
to or renewal of a Letter of Credit.
3.03 RISK PARTICIPATIONS, DRAWINGS AND REIMBURSEMENTS. (a)
Immediately upon the Issuance of each Letter of Credit, each Bank shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Issuing Bank a participation in such Letter of Credit and each drawing
thereunder in an amount equal to the product of (i) the Pro Rata Share of such
Bank, times (ii) the maximum amount available to be drawn under such Letter of
Credit and the amount of such drawing, respectively. Each Issuance of a Letter
of Credit shall be deemed to utilize the Commitment of each Bank by an amount
equal to the amount of such participation.
(b) In the event of any request for a drawing under a Letter
of Credit by the beneficiary or transferee thereof, the Issuing Bank will
promptly notify Holdings and specify in such notice the date such drawing will
be honored by the Issuing Bank (the "HONOR DATE"). If the Issuing Bank so
notifies Holdings prior to 9:00 a.m. (San Francisco time) on the Honor Date,
Holdings, as account party under such Letter of Credit, shall reimburse the
Issuing Bank no later than 11:00 a.m. (San Francisco time) on the Honor Date for
the amount paid by the Issuing Bank under such Letter of Credit or, if the
Issuing Bank shall so notify Holdings after 9:00 a.m. (San Francisco time) on
the Honor Date, Holdings, as account party under such Letter of Credit, shall
reimburse the Issuing Bank no later than 11:00 a.m. (San Francisco time) on the
next succeeding Business Day for the amount paid by the Issuing Bank under such
Letter of Credit on the Honor Date (each such date, a "REIMBURSEMENT DATE"), in
each case, in an amount equal to the amount so paid by the Issuing Bank. In the
event Holdings fails to reimburse the Issuing Bank for the full amount of any
41
drawing under any Letter of Credit by the required time as provided above on the
Reimbursement Date, the Issuing Bank will promptly notify the Agent, and the
Agent will promptly notify each Bank thereof (including the amount thereof and
such Bank's Pro Rata Share thereof), and Holdings shall be deemed to have
requested that Base Rate Loans be made by the Banks to Holdings to be disbursed
on the Reimbursement Date for such Letter of Credit, subject to the amount of
the unutilized portion of the Aggregate Commitment and subject to the conditions
set forth in Section 5.02. Holdings hereby directs that the proceeds of any such
Loans deemed to be made by it shall be used to pay its reimbursement obligations
in respect of any such drawing. Solely for the purposes of making such Loans,
the Minimum Amount limitations set forth in Section 2.03 shall not be
applicable. Any notice given by the Issuing Bank or the Agent pursuant to this
subsection 3.03(b) may be oral if immediately confirmed in writing (including by
facsimile); PROVIDED that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice. In the event that
any amount of any drawing under any Letter of Credit is not reimbursed by
Holdings on the Honor Date, such unreimbursed amount shall bear interest until
it is either deemed to be an L/C Borrowing as provided in subsection (f) or
deemed to be converted to a Base Rate Loan as provided in this subsection (b),
at a rate per annum equal to the Base Rate PLUS the Applicable Margin then in
effect for Base Rate Loans.
(c) Each Bank shall upon receipt of any notice pursuant to
subsection 3.03(b) make available to the Agent for the account of the Issuing
Bank an amount in Dollars and in immediately available funds equal to its Pro
Rata Share of the amount of the drawing, whereupon such Bank shall (subject to
subsection 3.03(f)) be deemed to have made a Revolving Loan consisting of a Base
Rate Loan to Holdings in that amount. The Agent will promptly give notice of the
occurrence of the Reimbursement Date, but failure of the Agent to give any such
notice on the Reimbursement Date or in sufficient time to enable any Bank to
effect such payment on such date shall not relieve such Bank from its
obligations under this Section 3.03.
(d) With respect to any unreimbursed drawing that is not
converted into Revolving Loans in whole or in part, because of Holdings' failure
to satisfy the conditions set forth in Section 5.02 or for any other reason,
Holdings shall be deemed to have incurred from the Issuing Bank an L/C Borrowing
in the amount of such drawing, which L/C Borrowing shall be due and payable on
demand (together with interest) and shall bear interest at a rate per annum
equal to the Base Rate, PLUS the Applicable Margin then in effect for Base Rate
Loans, PLUS 2% per annum. In such event, each Bank shall upon receipt of any
notice pursuant to subsection 3.03(b) make available to the Agent for the
account of the Issuing Bank an amount in Dollars and in immediately available
funds equal to its Pro Rata Share of the amount of the drawing. Each Bank's
payment to the Issuing Bank pursuant to this subsection 3.03(d) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Bank in satisfaction of its participation
obligation under this Section 3.03.
(e) If any Bank fails to make available to the Agent for the
account of the Issuing Bank the amount of such Bank's Pro Rata Share of the
amount of any drawing by no later than 12:00 noon (San Francisco time) on the
Reimbursement Date, then interest shall accrue on such Bank's obligation to make
such payment, from the Reimbursement Date to the date such Bank makes such
42
payment, at (i) the Federal Funds Rate in effect from time to time during the
period commencing on the Reimbursement Date and ending on the date three
Business Days thereafter, and (ii) thereafter at the Base Rate as in effect from
time to time, payable on demand of the Agent.
(f) Each Bank's obligation in accordance with this Agreement
to make or participate in the Revolving Loans or L/C Advances, as contemplated
by this Section 3.03, as a result of a drawing under a Letter of Credit, shall
be absolute and unconditional and without recourse to the Issuing Bank and shall
not be affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against the Issuing
Bank, Holdings or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of a Default, an Event of Default or a Material
Adverse Effect; or (iii) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; PROVIDED, HOWEVER, that each
Bank's obligation to make Revolving Loans under this Section 3.03 is subject to
the conditions set forth in Section 5.02.
3.04 REPAYMENT OF PARTICIPATIONS. (a) Upon (and only upon) receipt
by the Agent for the account of the Issuing Bank of immediately available funds
from Holdings (i) in reimbursement of any payment made by the Issuing Bank under
the Letter of Credit with respect to which any Bank has paid the Agent for the
account of the Issuing Bank for such Bank's participation in the Letter of
Credit pursuant to Section 3.03 or (ii) in payment of interest thereon, the
Agent will pay to each Bank, in the same funds as those received by the Agent
for the account of the Issuing Bank, the amount of such Bank's Pro Rata Share of
such funds, and the Issuing Bank shall receive the amount of the Pro Rata Share
of such funds of any Bank that did not so pay the Agent for the account of the
Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time
to return to Holdings, or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by
Holdings to the Agent for the account of the Issuing Bank pursuant to subsection
3.04(a) in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Bank shall, on demand of the Agent, forthwith
return to the Agent or the Issuing Bank the amount of its Pro Rata Share of any
amounts so returned by the Agent or the Issuing Bank plus interest thereon from
the date such demand is made to the date such amounts are returned by such Bank
to the Agent or the Issuing Bank, at a rate per annum equal to the Federal Funds
Rate in effect from time to time.
3.05 ROLE OF THE ISSUING BANK. (a) Each Bank and Holdings agree
that, in paying any drawing under a Letter of Credit, the Issuing Bank shall not
have any responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.
(b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Bank shall be liable to
any Bank for: (i) any action taken or omitted in connection herewith at the
request or with the approval of the Banks (including the Majority Banks, as
applicable); (ii) any action taken or omitted in the absence of gross negligence
43
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.
(c) Holdings hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; PROVIDED, HOWEVER, that this assumption is not intended to, and shall
not, preclude Holdings pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the Issuing Bank, shall be liable or responsible for any of the
matters described in clauses (i) through (vii) of Section 3.06; PROVIDED,
HOWEVER, anything in such clauses to the contrary notwithstanding, that Holdings
may have a claim against the Issuing Bank, and the Issuing Bank may be liable to
Holdings, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by Holdings which Holdings proves
were caused by the Issuing Bank's willful misconduct or gross negligence or the
Issuing Bank's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Bank shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
3.06 OBLIGATIONS ABSOLUTE. The obligations of Holdings under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Revolving Loans, shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:
(i) any lack of validity or enforceability of this Agreement
or any L/C-Related Document;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations of Holdings in respect of
any Letter of Credit or any other amendment or waiver of or any consent to
departure from all or any of the L/C-Related Documents;
(iii) the existence of any claim, set-off, defense or other
right that Holdings may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the Issuing Bank or any other Person,
whether in connection with this Agreement, the transactions contemplated hereby
or by the L/C-Related Documents or any unrelated transaction;
44
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under any Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of
Credit against presentation of a draft or certificate that does not strictly
comply with the terms of any Letter of Credit; or any payment made by the
Issuing Bank under any Letter of Credit to any Person purporting to be a trustee
in bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any beneficiary
or any transferee of any Letter of Credit, including any arising in connection
with any Insolvency Proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to departure
from any other guarantee, for all or any of the obligations of Holdings in
respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, Holdings
or a guarantor.
3.07 CASH COLLATERAL PLEDGE. (i) Upon the request of the Agent, if
the Issuing Bank has honored any full or partial drawing request on any Letter
of Credit and such drawing has resulted in an L/C Borrowing hereunder, or (ii)
if, as of the Revolving Termination Date, any Letters of Credit may for any
reason remain outstanding and partially or wholly undrawn, or (iii) the
occurrence of the circumstances described in subsection 2.08(b) or 2.08(c)
requiring Holdings to Cash Collateralize Letters of Credit, then, Holdings shall
immediately Cash Collateralize the L/C Obligations in an amount equal to such
L/C Obligations. Holdings shall, to the extent necessary, make such additional
pledges from time to time as shall be necessary to ensure that all L/C
Obligations remain at all times fully cash collateralized. Cash collateral held
under this Section 3.07 or Section 9.02 shall be maintained in blocked,
non-interest bearing deposit accounts at BofA pursuant to the Security
Agreement.
3.08 LETTER OF CREDIT FEES. (a) Holdings shall pay to the Agent for
the account of each of the Banks in accordance with its Pro Rata Share a letter
of credit fee with respect to the Standby Letters of Credit equal to the rate
per annum equal to the Applicable Fee Amount of the actual daily maximum amount
available to be drawn of the outstanding Standby Letters of Credit, computed on
a quarterly basis in arrears on the last Business Day of each calendar quarter
based upon Standby Letters of Credit outstanding for that quarter as calculated
by the Agent. Such letter of credit fees shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter during which Standby
Letters of Credit are outstanding, commencing on the first such quarterly date
to occur after the Closing Date, to the Revolving Termination Date (or such
later date upon which the outstanding Letters of Credit shall expire), with the
final payment to be made on the Revolving Termination Date (or such later
expiration date).
45
(b) Holdings shall pay to the Issuing Bank, for the Issuing
Bank's sole account, a letter of credit fee with respect to the amount from time
to time available to be drawn under Commercial Letters of Credit in such amount
and on such dates as shall separately be agreed between the Issuing Bank and
Holdings.
(c) Holdings shall pay to the Issuing Bank, for the Issuing
Bank's sole account, a letter of credit fronting fee for each Standby Letter of
Credit Issued by the Issuing Bank equal to 0.125% per annum of the actual daily
maximum amount available to be drawn of the outstanding Standby Letters of
Credit, computed on a quarterly basis in arrears on the last Business Day of
each calendar quarter based upon Standby Letters of Credit outstanding for that
quarter as calculated by the Issuing Bank. Such letter of credit fronting fees
shall be due and payable quarterly in arrears on the last Business Day of each
calendar quarter during which Standby Letters of Credit are outstanding,
commencing on the first such quarterly date to occur after the Closing Date, to
the Revolving Termination Date (or such later date upon which the outstanding
Letters of Credit shall expire), with the final payment to be made on the
Revolving Termination Date (or such later expiration date).
(d) Holdings shall pay to the Issuing Bank from time to time
on demand the normal issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the Issuing Bank relating to
letters of credit as from time to time in effect.
(e) Notwithstanding subsection (a) of this Section, while any
Event of Default exists or after acceleration, Holdings shall pay a letter of
credit fee (after as well as before entry of judgment thereon to the extent
permitted by law) on the actual daily maximum amount available to be drawn of
the outstanding Letters of Credit, at a rate per annum which is determined by
adding 2% per annum to the rate otherwise then in effect hereunder for such
Letters of Credit.
3.09 APPLICABILITY OF UNIFORM CUSTOMS AND PRACTICE AND ISP 98.
Unless otherwise expressly agreed by the Issuing Bank and Holdings when a Letter
of Credit is issued and subject to applicable laws, performance under Letters of
Credit by the Issuing Bank, its correspondents, and beneficiaries will be
governed by (i) with respect to Standby Letters of Credit, the rules of the
"International Standby Practices 1998" (ISP98) or such later revision as may be
published by the Institute of International Banking Law & Practice on any date
any Standby Letter of Credit may be issued, and (ii) with respect to Commercial
Letters of Credit, the rules of the Uniform Customs and Practice for Documentary
Credits, as published in its most recent version by the International Chamber of
Commerce (the "ICC") on the date any Commercial Letter of Credit is issued.
46
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
4.01 TAXES. (a) Any and all payments by Holdings to each Bank or
the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for, any Taxes. In addition,
Holdings shall pay all Other Taxes.
(b) If Holdings shall be required by law to deduct or withhold
any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to any Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so that,
after making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section), such
Bank or the Agent, as the case may be, receives and retains an amount equal to
the sum it would have received and retained had no such deductions or
withholdings been made;
(ii) Holdings shall make such deductions and withholdings;
(iii) Holdings shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) Holdings shall also pay to each Bank or the Agent for
the account of such Bank, at the time interest is paid, Further Taxes in the
amount that the respective Bank specifies as necessary to preserve the after-tax
yield such Bank would have received if such Taxes, Other Taxes or Further Taxes
had not been imposed.
(c) Holdings agrees to indemnify and hold harmless each Bank
and the Agent for the full amount of (i) Taxes, (ii) Other Taxes, and (iii)
Further Taxes in the amount that the respective Bank specifies as necessary to
preserve the after-tax yield such Bank would have received if such Taxes, Other
Taxes or Further Taxes had not been imposed, and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within 30 days after the date such Bank or the Agent makes written demand
therefor.
(d) Within 30 days after the date of any payment by Holdings
of Taxes, Other Taxes or Further Taxes, Holdings shall furnish to each Bank or
the Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to such Bank or the Agent.
(e) If Holdings is required to pay any amount to any Bank or
the Agent pursuant to subsection (b) or (c) of this Section, then such Bank
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to eliminate any such
47
additional payment by Holdings which may thereafter accrue, if such change in
the sole judgment of such Bank is not otherwise disadvantageous to such Bank.
(f) Nothing contained in this Section 4.01 shall override any
term or provision of any Specified Swap Contract regarding withholding taxes
relating to Swap Contracts.
4.02 ILLEGALITY. (a) If any Bank determines that the introduction
of any Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans, then, on notice thereof by such Bank to Holdings through
the Agent, any obligation of that Bank to make Offshore Rate Loans shall be
suspended until such Bank notifies the Agent and Holdings that the circumstances
giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any
Offshore Rate Loan, Holdings shall, upon its receipt of notice of such fact and
demand from such Bank (with a copy to the Agent), prepay in full such Offshore
Rate Loans of that Bank then outstanding, together with interest accrued thereon
and amounts required under Section 4.04, either on the last day of the Interest
Period thereof, if such Bank may lawfully continue to maintain such Offshore
Rate Loans to such day, or immediately, if such Bank may not lawfully continue
to maintain such Offshore Rate Loan. If Holdings is required to so prepay any
Offshore Rate Loan, then concurrently with such prepayment, Holdings shall
borrow from the affected Bank, in the amount of such repayment, a Base Rate
Loan.
(c) If the obligation of any Bank to make or maintain Offshore
Rate Loans has been so terminated or suspended, Holdings may elect, by giving
notice to such Bank through the Agent that all Loans which would otherwise be
made by such Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section,
the affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of such Bank, be
illegal or otherwise disadvantageous to such Bank.
4.03 INCREASED COSTS AND REDUCTION OF RETURN. (a) If any Bank
determines that, due to either (i) the introduction of or any change (other than
any change by way of imposition of or increase in reserve requirements included
in the calculation of the Offshore Rate) in or in the interpretation of any law
or regulation or (ii) the compliance by that Bank with any guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to such Bank of agreeing
to make or making, funding or maintaining any Offshore Rate Loans or
participating in Letters of Credit, or, in the case of the Issuing Bank, any
increase in the cost to the Issuing Bank of agreeing to issue, issuing or
maintaining any Letter of Credit or of agreeing to make or making, funding or
maintaining any unpaid drawing under any Letter of Credit, then Holdings shall
be liable for, and shall from time to time, upon demand (with a copy of such
demand to be sent to the Agent), pay to the Agent for the account of such Bank,
48
additional amounts as are sufficient to compensate such Bank for such increased
costs.
(b) If any Bank shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by such Bank (or its Lending Office) or any corporation controlling
such Bank with any Capital Adequacy Regulation, affects or would affect the
amount of capital required or expected to be maintained by such Bank or any
corporation controlling such Bank and (taking into consideration such Bank's or
such corporation's policies with respect to capital adequacy and such Bank's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitment, loans, credits or obligations
under this Agreement, then, upon demand of such Bank to Holdings through the
Agent, Holdings shall pay to such Bank, from time to time as specified by such
Bank, additional amounts sufficient to compensate such Bank for such increase.
4.04 FUNDING LOSSES. Holdings shall reimburse each Bank and hold
each Bank harmless from any loss or expense which such Bank may sustain or incur
as a consequence of:
(a) the failure of Holdings to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of Holdings to borrow, continue or convert a
Loan after Holdings has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Conversion/ Continuation;
(c) the failure of Holdings to make any prepayment in
accordance with any notice delivered under Section 2.05, 2.07 or 2.08;
(d) the prepayment (including pursuant to Section 2.05, 2.07,
2.08 or 4.02(b)) or other payment (including after acceleration thereof) of an
Offshore Rate Loan on a day that is not the last day of the relevant Interest
Period; and
(e) the conversion under Section 2.04 of any Offshore Rate
Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by Holdings to the Banks under this Section and
under subsection 4.03(a), each Offshore Rate Loan made by a Bank (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the Offshore Rate
for such Offshore Rate Loan by a matching deposit or other borrowing in the
London interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Offshore Rate Loan is in fact so funded.
49
4.05 INABILITY TO DETERMINE RATES. If the Agent or the Majority
Banks determine that for any reason adequate and reasonable means do not exist
for determining the Offshore Rate for any requested Interest Period with respect
to a proposed Borrowing of Offshore Rate Loans or conversion or continuation of
Offshore Rate Loans, or that the Offshore Rate applicable pursuant to subsection
2.10(a) for any requested Interest Period with respect to a proposed Borrowing
of Offshore Rate Loans, or a conversion into or continuation of Offshore Rate
Loans does not adequately and fairly reflect the cost to such Banks of funding
such Loans, the Agent will promptly so notify Holdings and each Bank.
Thereafter, the obligation of the Banks to make or maintain Offshore Rate Loans,
as the case may be, hereunder shall be suspended until the Agent upon the
instruction of the Majority Banks revokes such notice in writing. Upon receipt
of such notice, Holdings may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If Holdings does not revoke such
Notice, the Banks shall make, convert or continue the Loans, as proposed by
Holdings, in the amount specified in the applicable notice submitted by
Holdings, but such Loans shall be made, converted or continued as Base Rate
Loans instead of Offshore Rate Loans, as the case may be.
4.06 CERTIFICATES OF BANKS. Any Bank claiming reimbursement or
compensation under this Article IV shall deliver to Holdings (with a copy to the
Agent) a certificate setting forth in reasonable detail the amount payable to
such Bank hereunder, and the basis for calculation of such amount, and such
certificate shall be conclusive and binding on Holdings in the absence of
manifest error.
4.07 SUBSTITUTION OF BANKS. Upon the receipt by Holdings from any
Bank (an "AFFECTED BANK") of a claim for compensation under Section 4.03,
Holdings may: (i) request one or more of the other Banks to acquire and assume
all of such Affected Bank's Loans and Commitment; or (ii) designate a
replacement lending institution (which shall be an Eligible Assignee) to acquire
and assume all of such Affected Bank's Loans and Commitment (a "REPLACEMENT
BANK"); PROVIDED, HOWEVER, that Holdings shall be liable for the payment upon
demand of all costs and other amounts arising under Section 4.04 that result
from the acquisition of any Affected Bank's Loan and/or Commitment (or any
portion thereof) by a Bank or Replacement Bank, as the case may be, on a date
other than the last day of the applicable Interest Period with respect to any
Offshore Rate Loan then outstanding. Any such designation of a Replacement Bank
under clause (ii) shall be effected in accordance with, and subject to the terms
and conditions of, the assignment provisions contained in Section 11.08, and
shall in any event be subject to the prior written consent of the Agent, the
Issuing Bank and the Swingline Bank (which consent shall not be unreasonably
withheld).
4.08 SURVIVAL. The agreements and obligations of Holdings in this
Article IV shall survive the termination of the Commitments, the termination or
expiration of all Letters of Credit and the payment of all other Obligations.
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ARTICLE V
CONDITIONS PRECEDENT
5.01 CONDITIONS OF INITIAL CREDIT EXTENSIONS. The obligation of
each Bank and the Swingline Bank to make its initial Credit Extension hereunder
and the obligation of the Issuing Bank to Issue its initial Letter of Credit
shall be subject to the condition that the Agent shall have received on or
before the Closing Date all of the following, in form and substance reasonably
satisfactory to the Agent and each Bank, and in sufficient copies for each Bank:
(a) CREDIT AGREEMENT AND NOTES. This Agreement executed by
each party hereto and Notes executed by Holdings for the Banks requesting Notes;
(b) RESOLUTIONS; INCUMBENCY.
(i) Copies of the resolutions of the board of directors of
each Loan Party authorizing the transactions contemplated hereby, certified as
of the Closing Date by the Secretary or an Assistant Secretary of such Person;
and
(ii) a certificate of the Secretary or Assistant Secretary of
each Loan Party, dated as of the Closing Date, certifying the names, titles and
true signatures of the officers of such Person authorized to execute, deliver
and perform, as applicable, this Agreement and all other Loan Documents to be
delivered by it hereunder;
(c) ORGANIZATION DOCUMENTS; GOOD STANDING. Each of the
following documents:
(i) the articles or certificate of incorporation and the
bylaws of each Loan Party as in effect on the Closing Date, certified by the
Secretary or Assistant Secretary of such Person as of the Closing Date; and
(ii) a good standing certificate, as of a recent date, for
each Loan Party from the Secretary of State (or similar, applicable Governmental
Authority) of its state of incorporation and each state where its ownership,
lease or operation of property or the conduct of its business requires such Loan
Party be qualified or otherwise licensed to do business, together with
bring-down certificates by facsimile, dated the Closing Date or not more than
one Business Day prior thereto, if requested by the Agent;
(d) LEGAL OPINION. An opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP,
counsel to the Loan Parties and addressed to the Agent and the Banks, dated the
Closing Date, substantially in the form of EXHIBIT D;
(e) PAYMENT OF FEES. Evidence of payment by Holdings of all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Closing Date, together with reasonable Attorney Costs of BofA to the
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extent invoiced prior to or on the Closing Date, PLUS such additional amounts of
reasonable Attorney Costs as shall constitute BofA's reasonable estimate of
Attorney Costs incurred or to be incurred by it through the closing proceedings
(PROVIDED that such estimate shall not thereafter preclude final settling of
accounts between Holdings and BofA); including any such costs, fees and expenses
arising under or referenced in Sections 2.11 and 11.04;
(f) OFFICER'S CERTIFICATE. A certificate signed by a
Responsible Officer of each of Holdings and the Company, dated as of the Closing
Date, stating that:
(i) the representations and warranties contained in Article
VI are true and correct on and as of such date, as though made on and as of such
date;
(ii) no Default or Event of Default exists or would result
from the initial Credit Extension; and
(iii) there has occurred since December 31, 1998, no event or
circumstance that has resulted or could reasonably be expected to result in a
Material Adverse Effect;
(g) FINANCIAL STATEMENTS.
(i) The audited consolidated balance sheet of Holdings and
its Subsidiaries as at December 31, 1996, December 31, 1997 and December 31,
1998, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for the fiscal year then ended, certified by
a Responsible Officer of the Company;
(ii) the unaudited consolidated balance sheet of Holdings and
its Subsidiaries as at September 30, 1999, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal quarter then ended, certified by a Responsible Officer of the Company;
and
(iii) such other financial information as the Agent or any
Bank may reasonably request;
(h) BORROWING BASE CERTIFICATE. A completed Borrowing Base
Certificate, certifying the Borrowing Base as of the month ended October 31,
1999, signed by a Responsible Officer of Holdings, and dated the Closing Date;
(i) PERFECTION CERTIFICATE. A completed Perfection Certificate
from Holdings as to each Loan Party, dated as of the Closing Date;
(j) COLLATERAL DOCUMENTS. The Collateral Documents, executed
by each Loan Party, in appropriate form for recording, where necessary, together
with:
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(i) acknowledgment copies of all UCC-l financing statements
filed to perfect the security interests of the Agent for the benefit of the
Banks, or other evidence satisfactory to the Agent that there have been filed,
registered or recorded all financing statements and other filings, registrations
and recordings necessary and advisable to perfect the Liens of the Agent for the
benefit of the Banks in accordance with applicable law, or, with respect to the
Mortgaged Property, evidence satisfactory to the Agent that the executed
Mortgages with respect to the Mortgaged Property shall have been delivered to
Chicago Title Insurance Company in recordable form on or prior to the Closing
Date for recording;
(ii) written advice relating to such Lien and judgment
searches as the Agent shall have requested, and such termination statements or
other documents as may be necessary to confirm that the Collateral is subject to
no other Liens in favor of any Persons (other than Permitted Liens);
(iii) all certificates and instruments representing the
Pledged Collateral, together with stock transfer powers executed in blank with
signatures guaranteed as the Agent may specify;
(iv) funds sufficient to pay any filing or recording tax or
fee in connection with any and all UCC-1 financing statements and the Mortgages;
(v) with respect to the Mortgaged Property, an A.L.T.A. Form
B (or other form acceptable to the Agent and the Banks) mortgagee policy of
title insurance or a binder issued by a title insurance company satisfactory to
the Agent and the Banks insuring (or undertaking to insure, in the case of a
binder) that each Mortgage creates and constitutes a valid first Lien against
the Mortgaged Property contemplated thereby in favor of the Agent, subject only
to exceptions acceptable to the Agent and the Banks, with such endorsements and
affirmative insurance as the Agent or any Bank may reasonably request;
(vi) surveys and surveyor's certification as to all real
property and all land covered by a lease in respect of which there is delivered
a Mortgage, or as may be reasonably required by the Agent, each in form and
substance satisfactory to the Agent and the Banks;
(vii) appraisals, in form and substance satisfactory to the
Agent and the Majority Banks, of certain real property Collateral;
(viii) proof of payment of all title insurance premiums,
documentary stamp or intangible taxes, recording fees and mortgage taxes payable
in connection with the recording of any Mortgage or the issuance of the title
insurance policies (whether due on the Closing Date or in the future) including
sums due in connection with any future advances;
(ix) such consents, estoppels, subordination agreements and
other documents and instruments executed by landlords, tenants and other Persons
party to material contracts relating to any Collateral as to which the Agent
shall be granted a Lien for the benefit of the Banks, as requested by the Agent
or any Bank; and
53
(x) evidence that all other actions necessary or, in the
reasonable opinion of the Agent or the Banks, desirable to perfect and protect
the first priority Lien created by the Collateral Documents, and to enhance the
Agent's ability to preserve and protect its interests in and access to the
Collateral;
(k) INSURANCE POLICIES. Evidence that the Agent has been named
as loss payee under all policies of casualty insurance under a Form 438FBFU or
other standard lender's loss payable endorsement, and as additional insured
under all policies of liability insurance, required in accordance with Section
7.06 and the Collateral Documents, together with a certificate of insurance as
to all insurance coverage on the properties of Holdings and its Subsidiaries;
(l) COMPLIANCE CERTIFICATE. A completed Compliance
Certificate, as of the fiscal quarter immediately preceding the Closing Date,
signed by a Responsible Officer of Holdings, and dated the Closing Date;
(m) TERMINATION OF EXISTING CREDIT FACILITY. Evidence that:
(i) all amounts due under the Existing Credit Facility have been paid in full;
(ii) the Company is not obligated with respect to any outstanding letters of
credit thereunder; (iii) all guarantees of any of the Company's obligations in
respect of the Existing Credit Facility have terminated on the Closing Date, and
(iv) all commitments of the lenders under the Existing Credit Facility have been
terminated as of the Closing Date;
(n) REPAYMENT OF SENIOR SECURED NOTES. Evidence that the
Senior Secured Notes have been repaid in full, or concurrently with the initial
Borrowing hereunder shall have been paid full, and cancelled;
(o) OTHER DOCUMENTS. Such other approvals, opinions, documents
or materials as the Agent or any Bank may reasonably request.
5.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each
Bank and the Swingline Bank to make any Credit Extension (including its initial
Credit Extension) and the obligation of the Issuing Bank to Issue any Letter of
Credit (including the initial Letter of Credit) shall be subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date or Issuance Date:
(a) NOTICE, APPLICATION. The Agent shall have received a
Notice of Borrowing or in the case of any Issuance of any Letter of Credit, the
Issuing Bank and the Agent shall have received an L/C Application or L/C
Amendment Application, as required under Section 3.02;
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties in Article VI shall be true and correct on and as
of such Borrowing Date or Issuance Date with the same effect as if made on and
54
as of such Borrowing Date or Issuance Date (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct as of such earlier date) and except that this
subsection (b) shall be deemed instead to refer to the last day of the most
recent quarter and year for which financial statements have then been delivered
in respect of the representation and warranty made in subsection 6.11(a));
(c) NO EXISTING DEFAULT. No Default or Event of Default shall
exist or shall result from such Borrowing or Issuance;
(d) NO MATERIAL ADVERSE EFFECT. There has occurred since
December 31, 1998, no event or circumstance that has resulted or could
reasonably be expected to result in a Material Adverse Effect; and
(e) BORROWING BASE. On any such Borrowing Date or Issuance
Date, the Agent shall be in receipt of the completed Borrowing Base Certificate
then required to be delivered by Holdings hereunder, and the Effective Amount of
all outstanding Revolving Loans and Swingline Loans and the Effective Amount of
all L/C Obligations shall not exceed an amount equal to the lesser of (A) the
Aggregate Commitment and (B) the Borrowing Base.
(f) NO FUTURE ADVANCE NOTICE. Neither the Agent nor any Bank
shall have received from Holdings or any other Person any notice that any
Collateral Document will no longer secure on a first priority basis future
advances or future Loans to be made or extended under this Agreement.
Each Notice of Borrowing and L/C Application or L/C Amendment Application
submitted by Holdings hereunder shall constitute a representation and warranty
by Holdings hereunder, as of the date of each such notice and as of each
Borrowing Date or Issuance Date, as applicable, that (i) the conditions in this
Section 5.02 are satisfied, and (ii) the statements contained in the most recent
Borrowing Base Certificate, if any, delivered by Holdings hereunder shall be
true, correct and complete on and as of the date of such Borrowing Date or
Issuance Date, as applicable, as though made on and as of such date, except for
changes in the information set forth in such Borrowing Base Certificate in the
ordinary course of business.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each of Holdings and the Company represents and warrants to the Agent
and each Bank that:
6.01 CORPORATE EXISTENCE AND POWER. Holdings and each of its
Subsidiaries:
55
(a) is a corporation, limited liability company or partnership
duly organized or formed, as the case may be, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals (i) to own its assets and carry on its
business and (ii) in the case of any Loan Party, to execute, deliver, and
perform its obligations under the Loan Documents;
(c) is duly qualified, licensed and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, license or good
standing; and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clauses (b)(i) or (c) of this Section 6.01,
to the extent that the failure to do so would not reasonably be expected to have
a Material Adverse Effect.
6.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution,
delivery and performance by each Loan Party of this Agreement and each other
Loan Document to which such Loan Party is party, have been duly authorized by
all necessary corporate action, and do not and will not:
(a) contravene the terms of any of that Person's Organization
Documents;
(b) conflict with or result in any breach or contravention of,
or the creation of any Lien under, any document evidencing any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its property is
subject; or
(c) violate any Requirement of Law.
6.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings or filings in connection with the
Liens granted to the Agent under the Collateral Documents) is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document.
6.04 BINDING EFFECT. This Agreement and each other Loan Document to
which any Loan Party is a party constitute the legal, valid and binding
obligations of such Loan Party, enforceable against any Loan Party in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability.
6.05 LITIGATION. Except as specifically disclosed in SCHEDULE 6.05,
there are no actions, suits, proceedings, claims or disputes pending, or to the
best knowledge of Holdings and the Company, threatened or contemplated, at law,
in equity, in arbitration or before any Governmental Authority, against
Holdings, or its Subsidiaries or any of their respective properties which:
56
(a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or thereby;
or
(b) are reasonably likely to result in an adverse result for
Holdings or its Subsidiaries, which adverse result would reasonably be expected
to have a Material Adverse Effect. No injunction, writ, temporary restraining
order or any order of any nature has been issued by any court or other
Governmental Authority purporting to enjoin or restrain the execution, delivery
or performance of this Agreement or any other Loan Document, or directing that
the transactions provided for herein or therein not be consummated as herein or
therein provided.
6.06 NO DEFAULTS. No Default or Event of Default exists or would
result from the incurring of any Obligations by any Loan Party or from the grant
or perfection of the Liens of the Agent and the Banks on the Collateral. Neither
Holdings nor any Subsidiary is in default under or with respect to any
Contractual Obligation in any respect which, individually or together with all
such defaults, could reasonably be expected to have a Material Adverse Effect,
or that would create an Event of Default under subsection 9.01(e).
6.07 ERISA COMPLIANCE. Except as specifically disclosed in SCHEDULE
6.07:
(a) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best knowledge
of Holdings and the Company, nothing has occurred which would cause the loss of
such qualification. Holdings, the Company and each ERISA Affiliate have made all
required contributions to any Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected
to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
Holdings nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
Holdings nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
57
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither Holdings nor
any ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.
6.08 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans
and the Letters of Credit are to be used solely for the purposes set forth in
and permitted by Section 7.12 and Section 8.07. No Loan Party is generally
engaged in the business of purchasing or selling Margin Stock or extending
credit for the purpose of purchasing or carrying Margin Stock.
6.09 TITLE TO PROPERTIES; LIENS. Holdings and each Subsidiary have
good record and marketable title in fee simple to, or valid leasehold interests
in, all real property necessary or used in the ordinary conduct of their
respective businesses, except for such defects in title as could not,
individually or in the aggregate, have a Material Adverse Effect. The property
of Holdings and its Subsidiaries is subject to no Liens, other than Permitted
Liens.
6.10 TAXES. Holdings and its Subsidiaries have filed all Federal
and other material tax returns and reports required to be filed, and have paid
all Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against Holdings or
any Subsidiary that would, if made, have a Material Adverse Effect.
6.11 FINANCIAL CONDITION. (a) The audited consolidated balance
sheet of Holdings and its Subsidiaries dated December 31, 1998, the unaudited
balance sheet of Holdings and its Subsidiaries for the fiscal quarter ended
September 30, 1999 and the related consolidated statements of income or
operations, shareholders' equity and cash flows for the fiscal period ended on
that date:
(i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, subject to ordinary, good faith year end audit adjustments in the
case of quarterly financial statements;
(ii) are complete and accurate in all material respects and
fairly present the financial condition of Holdings and its Subsidiaries as of
the date thereof and results of operations and cash flows for the period covered
thereby; and
(iii) except as specifically disclosed in SCHEDULE 6.11, show
all material Indebtedness and other liabilities, direct or contingent, of
Holdings and its consolidated Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and Contingent Obligations.
(b) Since December 31, 1998, there has not been, nor is it
reasonably likely that there will be, any Material Adverse Effect.
58
(c) Any pro forma financial statements of Holdings and its
Subsidiaries furnished by Holdings to the Banks hereunder were prepared in
accordance with GAAP, are complete and accurate in all material respects and
fairly present the pro forma financial condition of Holdings and its
Subsidiaries as of the date thereof, and any financial projections furnished to
the Banks hereunder represent Holdings' best estimates and assumptions as to
future performance, which Holdings believes to be fair and reasonable as of the
time made in the light of current and reasonably foreseeable business
conditions.
6.12 ENVIRONMENTAL MATTERS. Holdings conducts in the ordinary
course of business a review of the effect of existing Environmental Laws and
existing Environmental Claims on its business, operations and properties, and as
a result thereof Holdings has reasonably concluded that, except as specifically
disclosed in SCHEDULE 6.12, such Environmental Laws and Environmental Claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(a) To the best knowledge of Holdings, except as specifically
disclosed in SCHEDULE 6.12, the ongoing operations of Holdings and each of its
Subsidiaries comply in all respects with all Environmental Laws, except such
non-compliance which would not (if enforced in accordance with applicable law)
result in liability in excess of $1,000,000 in the aggregate.
(b) Except as specifically disclosed in SCHEDULE 6.12,
Holdings and each of its Subsidiaries have obtained all licenses, permits,
authorizations and registrations required under any Environmental Law
("ENVIRONMENTAL PERMITS") and necessary for their respective ordinary course
operations, all such Environmental Permits are in good standing, and Holdings
and each of its Subsidiaries are in compliance with all material terms and
conditions of such Environmental Permits.
(c) Except as specifically disclosed in SCHEDULE 6.12, none of
Holdings, any of its Subsidiaries or any of their respective present property or
operations, is subject to any outstanding written order from or agreement with
any Governmental Authority, nor subject to any judicial or docketed
administrative proceeding, respecting any Environmental Law, Environmental Claim
or Hazardous Material.
(d) Except as specifically disclosed in SCHEDULE 6.12, there
are no Hazardous Materials or other conditions or circumstances existing with
respect to any property of Holdings or any Subsidiary, or arising from
operations prior to the Closing Date, of Holdings or any of its Subsidiaries
that would reasonably be expected to give rise to Environmental Claims with a
potential liability of Holdings and its Subsidiaries in excess of $1,000,000 in
the aggregate for any such condition, circumstance or property. In addition, (i)
neither Holdings nor any Subsidiary has any underground storage tanks (A) that
are not properly registered or permitted under applicable Environmental Laws, or
(B) that are leaking or disposing of Hazardous Materials off-site, and (ii)
Holdings and its Subsidiaries have notified all of their employees of the
existence, if any, of any health hazard arising from the conditions of their
employment and have met all notification requirements under Title III of CERCLA
and all other Environmental Laws.
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6.13 COLLATERAL DOCUMENTS. (a) The provisions of each of the
Collateral Documents are effective to create in favor of the Agent for the
benefit of the Banks, a legal, valid and enforceable first priority Lien in all
right, title and interest of Holdings, or the applicable Subsidiary (as the case
may be), in the Collateral described therein, and financing statements have been
filed in the offices in all of the jurisdictions listed in the schedule to the
Security Agreement and each Intellectual Property Security Agreement has been
filed in the U.S. Patent and Trademark Office and the U.S. Copyright Office.
(b) Each Mortgage when delivered will be effective to grant to
the Agent for the benefit of the Banks a legal, valid and enforceable deed of
trust/mortgage Lien on all the right, title and interest of the mortgagor under
such Mortgage in the Mortgaged Property described therein. When each such
Mortgage is duly recorded in the offices listed on the schedule to such Mortgage
and the mortgage recording fees and taxes in respect thereof are paid and
compliance is otherwise had with the formal requirements of state law applicable
to the recording of real estate mortgages generally, each such Mortgaged
Property, subject to the encumbrances and exceptions to title set forth therein
and except as noted in the title policies delivered to the Agent pursuant to
Section 5.01, is subject to a legal, valid, enforceable and perfected first
priority Lien; and when financing statements have been filed in the offices
specified in such Mortgage, such Mortgage also creates a legal, valid,
enforceable and perfected first Lien on all right, title and interest of
Holdings or such Subsidiary under such Mortgage in all personal property and
fixtures which is covered by such Mortgage, subject to no other Liens, except
the encumbrances and exceptions to title set forth therein and except as noted
in the title policies delivered to the Agent pursuant to Section 5.01, and
Permitted Liens.
(c) All representations and warranties of Holdings and any of
its Subsidiaries party thereto contained in the Collateral Documents are true
and correct.
6.14 REGULATED ENTITIES. None of Holdings, any Person controlling
Holdings, or any Subsidiary, is an "Investment Company" within the meaning of
the Investment Company Act of 1940. No Loan Party is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
6.15 NO BURDENSOME RESTRICTIONS. Neither Holdings nor any
Subsidiary is a party to or bound by any Contractual Obligation, or subject to
any restriction in any Organization Document, or any Requirement of Law, which
could reasonably be expected to have a Material Adverse Effect. Neither Holdings
nor any Subsidiary is a party to or bound by any Contractual Obligation which
restricts, limits or prohibits the payment of dividends by any Subsidiary or the
making of any other distribution in respect of such Subsidiary's capital stock.
6.16 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. Holdings or
its Subsidiaries own or are licensed or otherwise have the right to use all of
the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of Holdings and the Company, no
slogan or other advertising device, product, process, method, substance, part or
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other material now employed, or now contemplated to be employed, by Holdings or
any Subsidiary infringes upon any rights held by any other Person. Except as
specifically disclosed in SCHEDULE 6.05, no claim or litigation regarding any of
the foregoing is pending or, to the best knowledge of Holdings and the Company,
threatened, and no patent, invention, device, application, principle or any
statute, law, rule, regulation, standard or code is pending or, to the best
knowledge of Holdings and the Company, proposed, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
6.17 SUBSIDIARIES. As of the Closing Date, Holdings has no
Subsidiaries other than those specifically disclosed in part (a) of SCHEDULE
6.17 and has no equity investments in any other Person other than those
specifically disclosed in part (b) of SCHEDULE 6.17. All U.S. Subsidiaries of
Holdings as of the Closing Date are identified as such on part (a) of SCHEDULE
6.17.
6.18 INSURANCE. Except as specifically disclosed in SCHEDULE 6.18,
the properties of Holdings and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of Holdings, in such
amounts, with such deductibles and covering such risks as are deemed to be
appropriate by Holdings in the exercise of its reasonable business judgment.
6.19 SWAP OBLIGATIONS. (a) Neither Holdings nor any of its
Subsidiaries has incurred any outstanding obligations under any Swap Contracts,
other than Permitted Swap Obligations. In the ordinary course of managing its
business, Holdings undertakes its own independent assessment of its consolidated
assets, liabilities and commitments and considers appropriate means of
mitigating and managing risks associated with such matters, and Holdings has not
relied on any swap counterparty or any Affiliate of any swap counterparty in
determining whether to enter into any Swap Contract.
(b) Neither Holdings nor any of its Subsidiaries has entered
into any master agreement relating to Swap Contracts and under which termination
values resulting from Swap contracts that are Specified Swap Contracts are
nettable against termination values resulting from Swap Contracts that are not
Specified Swap Contracts, unless only Specified Swap Contracts are outstanding
under such master agreement.
6.20 YEAR 2000. On the basis of a comprehensive review and
assessment of Holdings' and its Subsidiaries' systems and equipment and inquiry
made of Holdings' and its Subsidiaries' material suppliers, vendors and
customers, each of Holdings and the Company reasonably believes that the "Year
2000 problem" (i.e., the inability of computers, as well as embedded microchips
in non-computing devices, to perform properly date-sensitive functions with
respect to certain dates prior to and after December 31, 1999), including costs
of remediation, will not result in a Material Adverse Effect. Holdings and its
Subsidiaries have developed feasible contingency plans adequately to ensure
uninterrupted and unimpaired business operation in the event of failure of their
own or a third party's systems or equipment due to the Year 2000 problem,
including those of vendors, customers, and suppliers, as well as a general
failure of or interruption in its communications and delivery infrastructure.
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6.21 REAL PROPERTY. Schedule 6.21 contains a complete listing of
all real property owned by Holdings or any of its Subsidiaries as of the Closing
Date, and identifies which of such properties constitute Mortgaged Property as
of the Closing Date.
6.22 FULL DISCLOSURE. None of the representations or warranties
made by any Loan Party in the Loan Documents as of the date such representations
and warranties are made or deemed made, and none of the statements contained in
any exhibit, report, statement or certificate furnished by or on behalf of any
Loan Party in connection with the Loan Documents (including the offering and
disclosure materials delivered by or on behalf of any Loan Party to the Banks
prior to the Closing Date), contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading as of the time when made or delivered; PROVIDED that to the
extent any such information, report, financial statement, exhibit or schedule
was based upon or constitutes a forecast or projection, such Loan Party
represents only that it acted in good faith and utilized reasonable assumptions
and due care in the preparation of such information, report, financial
statement, exhibit or schedule (it being understood that forecasts and
projections by their nature involve approximations and uncertainties).
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in writing:
7.01 FINANCIAL STATEMENTS. Holdings shall deliver to the Agent and
each Bank, in form and detail satisfactory to the Agent and the Majority Banks:
(a) as soon as available, but not later than 90 days after the
end of each fiscal year, a copy of the audited consolidated balance sheet of
Holdings and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the unqualified opinion of
PricewaterhouseCoopers LLP or another nationally-recognized independent public
accounting firm (the "INDEPENDENT AUDITOR") which report shall state that such
consolidated financial statements present fairly the financial position for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years. Such opinion shall not be qualified as to (i) going concern, (ii)
any limitation in the scope of the audit, or (iii) possible errors generated by
financial reporting and related systems due to the Year 2000 problem;
(b) as soon as available, but not later than 45 days after the
end of each of the first three fiscal quarters of each fiscal year, a copy of
the unaudited consolidated balance sheet of Holdings and its Subsidiaries as of
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the end of such quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, and certified by a Responsible
Officer of Holdings as being complete and accurate in all material respects and
fairly presenting, in accordance with GAAP (subject to ordinary, good faith
year-end audit adjustments), the financial position and the results of
operations and cash flows of Holdings and the Subsidiaries; and
(c) promptly, such other financial statements and information
(including financial information regarding Minority Investments) as the Agent,
at the request of any Bank, may from time to time request.
As to any information contained in materials furnished pursuant to subsection
7.02(e), Holdings shall not be separately required to furnish such information
under subsection (a) or (b) above, but the foregoing shall not be in derogation
of the obligation of Holdings to furnish the information and materials described
in subsection (a) and (b) above at the times specified therein.
7.02 CERTIFICATES; OTHER INFORMATION. Holdings shall furnish to the
Agent and each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.01(a), a certificate of the Independent Auditor
stating that in the course of the regular examination of the business of
Holdings and its Subsidiaries, which examination was conducted by such
accounting firm in accordance with GAAP, nothing has come to the attention of
the Independent Auditor which would cause it to believe that a Default or Event
of Default has occurred and is continuing, or if, in the opinion of the
Independent Auditor, a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof.
(b) within 90 days after the close of each fiscal year, an
update of the projections delivered to the Banks prior to the Closing Date (the
"CLOSING DATE PROJECTIONS") for the then-current and next succeeding four fiscal
years, certified by a Responsible Officer of Holdings, together with a statement
of such Responsible Officer explaining in reasonable detail any significant
variances from the Closing Date Projections;
(c) concurrently with the delivery of the financial statements
referred to in subsections 7.01(a) and (b), a Compliance Certificate executed by
a Responsible Officer of Holdings;
(d) within 30 days after the end of each calendar month until
such time as the Collateral (other than the Pledged Collateral) is released
pursuant to Subsection 2.16(b), and thereafter within 30 days after the end of
each fiscal quarter of Holdings (or, at Holdings' option, within 30 days after
the end of each calendar month), a Borrowing Base Certificate appropriately
completed by a Responsible Officer of Holdings;
(e) promptly, copies of all financial statements and reports
that Holdings sends to its shareholders, and copies of all financial statements
and regular, periodical or special reports (including Forms 10K, 10Q and 8K)
that Holdings or any Subsidiary may make to, or file with, the SEC;
63
(f) promptly upon sending or receipt, copies of any and all
management letters and correspondence relating to management letters, sent or
received by Holdings or any of its Subsidiaries to or from the Independent
Auditor;
(g) at the same time it is provided to the holders of any
Subordinated Debt, any notices and other information provided to such holders
pursuant to the reporting and notices provisions of the Subordinated Debt
Documents (without duplication of any notices, financial statements and other
information required hereunder);
(h) upon the request of the Agent or any Bank, a copy of
Holdings' and its Subsidiaries' plan, timetable and budget to address the Year
2000 problem, together with periodic updates thereof and expenses incurred to
date, any third party assessment of Holdings' and its Subsidiaries' Year 2000
remediation efforts, and any Year 2000 contingency plans, and any estimates of
Holdings' and its Subsidiaries' potential litigation exposure (if any) to the
Year 2000 problem;
(i) within 20 days of the Agent's or any Bank's request
therefor, (i) a current list of the names, addresses and outstanding debts of
all Account Debtors, and (ii) a current list of the names, addresses and
outstanding amounts due all creditors of Holdings or any Subsidiary;
(j) concurrently with the delivery of the financial statements
referred to in subsections 7.01(a) and (b), an Update Certificate, in
substantially the form of EXHIBIT K, executed by a Responsible Officer of
Holdings;
(k) promptly, such additional information regarding the
business, financial or corporate affairs of Holdings or any Subsidiary as the
Agent, at the request of any Bank, may from time to time request.
7.03 NOTICES. Holdings shall promptly notify the Agent:
(a) of the occurrence of any Default or Event of Default, and
of the occurrence or existence of any event or circumstance that foreseeably
will become a Default or Event of Default;
(b) of any matter that has resulted or could result in a
Material Adverse Effect, including (i) any breach or non-performance of, or any
default under, any Contractual Obligation of Holdings or any of its Subsidiaries
which has resulted or could result in a Material Adverse Effect; and (ii) any
dispute, litigation, investigation, proceeding or suspension which may exist at
any time between Holdings or any of its Subsidiaries and any Governmental
Authority (including under or pursuant to any Environmental Laws) which has
resulted or could result in a Material Adverse Effect;
(c) of the commencement of, or any material development in,
any litigation or proceeding affecting Holdings or any Subsidiary (i) which, if
adversely determined, would reasonably be expected to have a Material Adverse
Effect, or (ii) in which the relief sought is an injunction or other stay of the
performance of this Agreement or any Loan Document;
64
(d) until such time as the Collateral (other than the Pledged
Collateral) is released pursuant to Subsection 2.16(b): upon, but in no event
later than 10 days after, becoming aware of (i) any and all enforcement,
cleanup, removal or other governmental or regulatory actions instituted,
completed or threatened against Holdings or any Subsidiary or any of their
respective properties pursuant to any applicable Environmental Laws, (ii) all
other Environmental Claims, and (iii) any environmental or similar condition on
any real property adjoining or in the vicinity of the property of Holdings or
any Subsidiary that could reasonably be anticipated to cause such property or
any part thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of such property under any Environmental Laws;
(e) of any other litigation or proceeding affecting Holdings
or any of its Subsidiaries which Holdings would be required to report to the SEC
pursuant to the Exchange Act, within four days after reporting the same to the
SEC;
(f) of the occurrence of any of the following events affecting
Holdings or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Agent and each Bank a copy of any notice with respect
to such event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to Holdings or any ERISA Affiliate with
respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension Liability of
any Pension Plan;
(iii) the adoption of, or the commencement of contributions
to, any Plan subject to Section 412 of the Code by Holdings or any ERISA
Affiliate; or
(iv) the adoption of any amendment to a Plan subject to
Section 412 of the Code, if such amendment results in a material increase in
contributions or Unfunded Pension Liability;
(g) of any material change in accounting policies or financial
reporting practices by Holdings or any of its consolidated Subsidiaries; and
(h) upon the request from time to time of the Agent or any
Bank, the Swap Termination Values, together with a description of the method by
which such amounts were determined, relating to any then-outstanding Swap
Contracts to which Holdings or any of its Subsidiaries is party;
(i) the occurrence of any Event of Loss exceeding $1,000,000;
(j) of the entry by Holdings into any Specified Swap Contract,
together with the details thereof; and
(k) of the occurrence of any default, event of default,
termination event or other event under any Specified Swap Contract that after
the giving of notice, passage of time or both, would permit either counterparty
65
to such Specified Swap Contract to terminate early any or all trades relating to
such contract.
Each notice under this Section shall be accompanied by a
written statement by a Responsible Officer of Holdings setting forth details of
the occurrence referred to therein, and stating what action Holdings or any
affected Subsidiary proposes to take with respect thereto and at what time. Each
notice under subsection 7.03(a) shall describe with particularity any and all
clauses or provisions of this Agreement or other Loan Document that have been
(or foreseeably will be) breached or violated.
7.04 PRESERVATION OF CORPORATE EXISTENCE, ETC. Holdings shall, and
shall cause each Subsidiary to, except in connection with transactions permitted
by Section 8.03 and sales of assets permitted by Section 8.02:
(a) preserve and maintain in full force and effect its (i)
legal existence and (ii) good standing under the laws of its state or
jurisdiction of incorporation or formation;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.
7.05 MAINTENANCE OF PROPERTY. Holdings shall, and shall cause each
Subsidiary to, maintain, and preserve all its property which is used or useful
in its business in good repair and condition, and from time to time make
necessary repairs, renewals and replacements thereto so that its property shall
be fully and efficiently preserved and maintained consistent with Holdings' or
such Subsidiary's past practice.
7.06 INSURANCE. In addition to insurance requirements set forth in
the Collateral Documents, Holdings shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons, including workers'
compensation insurance, public liability and property and casualty insurance.
Until such time as the Collateral (other than the Pledged Collateral) is
released pursuant to Subsection 2.16(b), (a) all such insurance shall name the
Agent as loss payee/mortgagee and as additional insured, for the benefit of the
Banks, as their interests may appear, (b) all casualty and key man insurance
maintained by Holdings shall name the Agent as loss payee and all liability
insurance shall name the Agent as additional insured for the benefit of the
Banks, as their interests may appear, and (c) upon the request of the Agent or
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any Bank, Holdings shall furnish the Agent, with sufficient copies for each
Bank, at reasonable intervals (but not more than once per calendar year) a
certificate of a Responsible Officer of Holdings (and, if requested by the
Agent, any insurance broker of Holdings) setting forth the nature and extent of
all insurance maintained by Holdings and its Subsidiaries in accordance with
this Section or any Collateral Documents (and which, in the case of a
certificate of a broker, were placed through such broker).
7.07 PAYMENT OF OBLIGATIONS. Holdings shall, and shall cause each
of its Subsidiaries to, pay and discharge as the same shall become due and
payable, all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges
or levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by Holdings or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a
Lien upon its property not constituting a Permitted Lien; and
(c) all Indebtedness, as and when due and payable, but subject
to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness (except where failure to do so would not otherwise
constitute a Default or Event of Default hereunder).
7.08 COMPLIANCE WITH LAWS. Holdings shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
7.09 COMPLIANCE WITH ERISA. Holdings shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
7.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. (a) Holdings
shall, and shall cause each Subsidiary to, maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of Holdings and such Subsidiary. Holdings
shall permit, and shall cause each Subsidiary to permit, representatives and
independent contractors of the Agent or any Bank to visit and inspect any of
their respective properties, to examine their respective corporate, financial,
operating and other records, and make copies thereof or abstracts therefrom, and
to discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at the expense of
Holdings and the Company and at such reasonable times during normal business
hours and as often as may be reasonably desired, upon reasonable advance notice
67
to Holdings; PROVIDED, HOWEVER, when an Event of Default exists the Agent or any
Bank may do any of the foregoing at any time during normal business hours and
without advance notice;
(b) Without limiting the generality of subsection 7.10(a), as
frequently as the Majority Banks may deem appropriate, each of Holdings and the
Company will provide Agent or its designee access to Holdings' and the Company's
records and premises and allow such auditors or appraisers to conduct audits of
Holdings' and its Subsidiaries' accounts, including Accounts and Inventory.
Holdings shall pay all reasonable fees and expenses of one such audit in any
12-month period; PROVIDED, HOWEVER, that during the existence of any Event of
Default, Holdings shall pay all reasonable fees and expenses of each such audit.
7.11 ENVIRONMENTAL LAWS. (a) Holdings shall, and shall cause
each Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws.
(b) Until such time as the Collateral (other than the Pledged
Collateral) is released pursuant to Subsection 2.16(b), upon the written request
of the Agent or any Bank, Holdings shall submit and cause each of its
Subsidiaries to submit, to the Agent with sufficient copies for each Bank, at
Holdings' sole cost and expense, at reasonable intervals, a report providing an
update of the status of any environmental, health or safety compliance, hazard
or liability issue identified in any notice or report required pursuant to
subsection 7.03(d), that could, individually or in the aggregate, result in
liability in excess of $1,000,000.
7.12 USE OF PROCEEDS. Holdings shall, directly or indirectly, use
the proceeds of the Loans (i) for Permitted Acquisitions, (ii) for making
Investments permitted under Section 8.04, (iii) to refinance the Existing Credit
Facility and the Senior Secured Notes, and (iv) for working capital and other
general corporate purposes not in contravention of any Requirement of Law or of
any Loan Document.
7.13 ADDITIONAL GUARANTORS. (a) If a Minority Investment or
Subsidiary shall at any time become a U.S. Subsidiary, or if Holdings, or any
Subsidiary of Holdings, otherwise shall incorporate, create or acquire any U.S.
Subsidiary, Holdings shall cause such U.S. Subsidiary to furnish promptly, but
in no event more than 30 days thereafter, each of the following to the Agent, in
sufficient quantities for each Bank:
(i) a duly executed notice and agreement in substantially
the form of EXHIBIT G (an "ADDITIONAL GUARANTOR ASSUMPTION AGREEMENT");
(ii) (A) copies of the resolutions of the board of directors
(or equivalent governing body) of such Subsidiary approving and authorizing the
execution, delivery and performance by such Subsidiary of its Additional
Guarantor Assumption Agreement and this Agreement , certified as of the date of
such Additional Guarantor Assumption Agreement (the "ADDITIONAL GUARANTOR
ACCESSION DATE") by the Secretary or an Assistant Secretary (or other
appropriate officer) of such Subsidiary; (B) a certificate of the Secretary or
Assistant Secretary (or other appropriate officer) of such Subsidiary certifying
the names and true signatures of the officers of such Subsidiary authorized to
execute and deliver and perform, as applicable, its Additional Guarantor
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Assumption Agreement, this Agreement and all other Loan Documents to be
delivered hereunder; (C) copies of the articles or certificate of incorporation
and bylaws (or other applicable Organization Documents) of such Subsidiary as in
effect on the Additional Guarantor Accession Date, certified by the Secretary or
Assistant Secretary (or other appropriate officer) of such Subsidiary as of the
Additional Guarantor Accession Date; and (D) an opinion of counsel to such
Subsidiary and addressed to the Agent and the Banks, substantially in the form
of EXHIBIT H; and
(iii) until such time as the Collateral (other than the
Pledged Collateral) is released pursuant to Subsection 2.16(b): (A) such
amendments to the schedules to the Security Agreement as shall be required in
connection with the accession of such Subsidiary thereto;(B) executed UCC-1
financing statements furnished by the Agent in each jurisdiction in which such
filing is necessary to perfect the security interest of the Agent on behalf of
the Banks in the Collateral of such Subsidiary and in which the Agent requests
that such filing be made, and (C) if requested by the Agent, such Mortgages and
other documents as may be required to create and perfect a lien in the interests
of such Subsidiary in any real property and such title insurance policies and
other documents as the Agent or the Majority Banks may reasonably request in
connection therewith.
(b) Additionally, Holdings and such Subsidiary shall have
executed and delivered to the Agent (in sufficient quantities for each Bank)
such other items as reasonably requested by the Agent in connection with the
foregoing, including officers' certificates, search reports and other
certificates and documents.
7.14 ADDITIONAL SUBSIDIARIES. If Holdings, directly or indirectly,
incorporates, creates or acquires any additional Subsidiary, or if any Minority
Investment shall become a Subsidiary, then within ten (10) days thereafter,
Holdings shall (i) (A) pledge the capital stock of such additional Subsidiary to
the Agent pursuant to the Security Agreement, if such stock is directly owned by
Holdings, or (B) if such stock is owned by a Subsidiary, cause such Subsidiary
to pledge the capital stock of such additional Subsidiary to the Agent pursuant
to the Security Agreement, and (ii) execute and deliver, or cause such
Subsidiary to have executed and delivered, to the Agent stock transfer powers
executed in blank with signatures guaranteed as the Agent shall request, such
UCC-1 financing statements (as furnished by the Agent) in each jurisdiction in
which such filing is necessary to perfect the security interest of the Agent in
the Collateral with respect to Holdings or such Subsidiary, and (iii) deliver
such other items as reasonably requested by the Agent in connection with the
foregoing, including resolutions, incumbency and officers' certificates,
opinions of counsel, search reports and other certificates and documents;
PROVIDED, HOWEVER, that if any such additional Subsidiary is not a U.S.
Subsidiary, in no event shall more than 65% of the capital stock of any such
Subsidiary be required to be so pledged.
7.15 ENVIRONMENTAL REVIEW. Holdings shall deliver to the Agent by
not later than January 31, 2000, an environmental site assessment or other
environmental analysis, report or review with respect to any real property as to
which the Agent is granted a Lien for the benefit of the Banks, in form and
substance reasonably satisfactory to the Agent. If any such environmental site
69
assessment or other environmental analysis, report or review with respect to any
Mortgaged Property shall indicate the presence of any Hazardous Materials on or
in the vicinity of such Mortgaged Property or otherwise shall indicate any
environmental problem with respect to such Mortgaged Property (including any
environmental problem which may give rise to any Environmental Claim) which, in
the reasonable determination of the Agent, adversely affects the value of such
Mortgaged Property or causes the Agent to desire to exclude such Mortgaged
Property from the Collateral, then Holdings shall, and shall cause its
Subsidiaries to, enter into and deliver to the Agent one or more Mortgages in
respect of additional or replacement real property Collateral, in form and
substance reasonably satisfactory to the Agent, together with such title
insurance policies, insurance endorsements, surveys, appraisals, consents,
estoppels, subordination agreements and other documents and other instruments as
the Agent shall reasonably request; PROVIDED, HOWEVER, that no such additional
or replacement real property Collateral shall be required at any time after the
Collateral (other than the Pledged Collateral) has been released pursuant to
subsection 2.16(b).
7.16 FURTHER ASSURANCES. Holdings shall ensure that all written
information, exhibits and reports furnished to the Agent or the Banks do not and
will not contain any untrue statement of a material fact and do not and will not
omit to state any material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which made,
and will promptly disclose to the Agent and the Banks and correct any defect or
error that may be discovered therein or in any Loan Document or in the
execution, acknowledgement or recordation thereof.
(b) Until such time as the Collateral (other than the Pledged
Collateral) is released pursuant to Subsection 2.16(b), if at any time Holdings,
the Company or any Subsidiary shall become the owner of any real property that
is located in the United States that has a fair market or book value equal to at
least $1,000,000, then, upon the request of the Agent or the Majority Banks,
Holdings and the Company shall (and shall cause any of their Subsidiaries to)
promptly, and in any event within thirty (30) days following acquisition of such
real property, enter into and deliver to the Agent a Mortgage in respect to such
property, in form and substance reasonably satisfactory to the Agent, together
with such title insurance policies, insurance endorsements, surveys, appraisals,
consents, estoppels, subordination agreements and other documents and other
instruments as the Agent or the Majority Banks shall reasonably request.
(c) Promptly upon request by the Agent or the Majority Banks,
Holdings shall (and shall cause any of its Subsidiaries to) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing statements
and continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments the Agent or such
Banks, as the case may be, may reasonably require from time to time in order (i)
to carry out more effectively the purposes of this Agreement or any other Loan
Document, (ii) to subject to the Liens created by any of the Collateral
Documents any of the properties, rights or interests covered by any of the
Collateral Documents, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer,
70
preserve, protect and confirm to the Agent and Banks the rights granted or now
or hereafter intended to be granted to the Banks under any Loan Document or
under any other document executed in connection therewith.
ARTICLE VIII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in writing:
8.01 LIMITATION ON LIENS. (a) Holdings shall not, and shall not
suffer or permit any Subsidiary to, directly or indirectly, make, create, incur,
assume or suffer to exist any Lien upon or with respect to any part of its
property, whether now owned or hereafter acquired, other than the following
("PERMITTED LIENS"):
(i) any Lien existing on the Closing Date and set forth in
SCHEDULE 8.01 securing Indebtedness outstanding on such date;
(ii) any Lien created under any Loan Document;
(iii) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or to the
extent that non-payment thereof is permitted by subsection 7.07(a), PROVIDED
that no notice of Lien has been filed or recorded under the Code;
(iv) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business which are not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto;
(v) Liens (other than any Lien imposed by ERISA and other
than on the Collateral) consisting of pledges or deposits required in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other social security legislation;
(vi) Liens securing (A) the non-delinquent performance of
bids, trade contracts (other than for borrowed money), leases (other than
Capital Leases), statutory obligations, (B) contingent obligations on surety and
appeal bonds, and (C) other non-delinquent obligations of a like nature; in each
case, incurred in the ordinary course of business, PROVIDED all such Liens in
the aggregate would not (even if enforced) cause a Material Adverse Effect;
(vii) Liens (other than Liens on the Collateral) consisting of
judgment or judicial attachment liens, PROVIDED that the enforcement of such
Liens is effectively stayed and all such Liens in the aggregate at any time
outstanding for Holdings and its Subsidiaries do not exceed $1,000,000;
71
(viii) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of Holdings and its Subsidiaries;
(ix) Liens on specific tangible assets of Persons which
become Subsidiaries after the date of this Agreement; PROVIDED, HOWEVER, that
(A) such Liens existed at the time the respective Persons became Subsidiaries
and were not created in anticipation thereof, (B) any such Lien does not by its
terms cover any assets after the time such Person becomes a Subsidiary which
were not covered immediately prior thereto, (C) any such Lien does not by its
terms secure any Indebtedness other than Indebtedness existing immediately prior
to the time such Person becomes a Subsidiary, and (D) such Indebtedness is
permitted by Section 8.05(d);
(x) purchase money Liens on any property acquired or held by
Holdings or its Subsidiaries in the ordinary course of business, securing
Indebtedness incurred or assumed for the purpose of financing all or any part of
the cost of acquiring such property; PROVIDED that (i) any such Lien attaches to
such property concurrently with or within 20 days after the acquisition thereof,
(ii) such Lien attaches solely to the property so acquired in such transaction,
(iii) the principal amount of the Indebtedness secured thereby does not exceed
100% of the cost of such property, and (iv) such Indebtedness is permitted under
subsection 8.05(d);
(xi) Liens securing obligations in respect of Capital Leases
on assets subject to such leases, PROVIDED that such Capital Leases are
otherwise permitted hereunder;
(xii) Liens arising solely by virtue of any statutory or
common law provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; PROVIDED that (A) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by Holdings in excess of those set forth by regulations promulgated by
the FRB, and (B) such deposit account is not intended by Holdings or any
Subsidiary to provide collateral to the depository institution;
(xiii) Liens consisting of pledges of cash collateral or
government securities to secure on a xxxx-to-market basis Permitted Swap
Obligations only, PROVIDED that (A) the counterparty to any Swap Contract
relating to such Permitted Swap Obligation is under a similar requirement to
deliver similar collateral from time to time to Holdings or the Subsidiary party
thereto on a xxxx-to-market basis; and (B) the aggregate value of such
collateral so pledged by Holdings and the Subsidiaries together in favor of any
counterparty does not at any time exceed $3,000,000; and
(xiv) Liens not otherwise permitted hereunder securing
Indebtedness in principal amount not exceeding $5,000,000 in the aggregate at
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any time outstanding; PROVIDED that (A) no such Lien shall attach to any
Collateral and (B) such Indebtedness is otherwise permitted hereunder.
(b) Holdings shall not, and shall not permit any of its
Subsidiaries to, enter into or suffer to exist any agreement (other than this
Agreement) prohibiting or conditioning the creation or assumption of any Lien
upon any of its properties, revenues or assets, whether now owned or hereafter
acquired.
Notwithstanding the foregoing, no other Liens may exist at any time on
or with respect to the Pledged Collateral.
8.02 DISPOSITION OF ASSETS. Holdings shall not, and shall not
suffer or permit any Subsidiary to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
(a) dispositions of inventory or equipment, all in the
ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;
(c) dispositions of inventory and equipment by the Company or
any Subsidiary to the Company or any Subsidiary pursuant to reasonable business
requirements and in the ordinary course of business;
(d) the lease or sublease of real property by Holdings or any
Subsidiary to other Persons in the ordinary course of business;
(e) the sale of cash equivalents and other short term money
market investments in the ordinary course of business pursuant to Holdings'
usual and customary cash management policies and procedures;
(f) dispositions of inventory and equipment (other than
dispositions permitted under subsection (a)) by Holdings or any Subsidiary to
any Person in which Holdings has a Minority Investment, PROVIDED that the
aggregate amount of such dispositions in any calendar year, PLUS the aggregate
amount of Minority Investments under subsection 8.04(d) in such year, does not
exceed the sublimit of the Annual Limit specified in subsection 8.04(d);
(g) dispositions pursuant to sales and leaseback transactions
permitted under Section 8.14;
(h) dispositions not otherwise permitted hereunder which are
made for fair market value (as determined in good faith by Holdings or the
Company); PROVIDED that (i) at the time of any disposition, no Event of Default
73
shall exist or shall result from such disposition, (ii) the aggregate sales
price from such disposition shall be paid in cash, (iii) immediately after
giving effect to such disposition, the Disposition Value of all assets disposed
of as permitted by this subsection 8.02(h) during the period of 365 days ending
on the date of such proposed sale (but excluding the Disposition Value of any
real property so disposed of, PROVIDED that the proceeds of any such disposition
are reinvested within six (6) months of such disposition in similar replacement
property) shall not exceed 15% of Total Assets determined as of such date, (iv)
no disposition by Holdings of any of its equity interest in the Company shall be
permitted hereunder, and (v) no dispositions of accounts or notes receivable
shall be permitted hereunder unless in connection with the sale of all or
substantially all of a business unit, division or Subsidiary of Holdings and
such sale is otherwise permitted hereunder.
8.03 CONSOLIDATIONS AND MERGERS. Holdings shall not, and shall not
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:
(a) any Subsidiary may merge with Holdings, PROVIDED that
Holdings shall be the continuing or surviving Person, or with any one or more
Subsidiaries, PROVIDED that if any transaction shall be between a Subsidiary and
a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be the continuing
or surviving Person;
(b) as permitted by Section 8.02;
(c) any Subsidiary may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise), to Holdings or to a
Wholly-Owned Subsidiary; and
(d) Holdings or any Subsidiary thereof may merge with or
consolidate into any other Person, PROVIDED that (i) (in the case of Holdings)
Holdings shall be the continuing or surviving Person, (ii) such merger or
consolidation is in connection with a Permitted Acquisition, and (iii) no such
merger or consolidation shall be made while there exists a Default or if a
Default would occur as a result thereof.
8.04 LOANS AND INVESTMENTS. Holdings shall not purchase or acquire,
or suffer or permit any Subsidiary to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any obligations or
other securities of, or any interest in, any Person, or make or commit to make
any Acquisitions, or make or commit to make any advance, loan, extension of
credit or capital contribution to or any other investment in, any Person
including any Affiliate of Holdings (together, "INVESTMENTS"), except for:
(a) Investments held by Holdings or Subsidiary in the form of
cash equivalents and short term money market investments in the ordinary course
of business pursuant to Holdings' usual and customary cash management policies
and procedures;
(b) extensions of credit in the nature of accounts receivable
or notes receivable arising from the sale or lease of goods or services in the
ordinary course of business;
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(c) Investments in the capital stock of Wholly-Owned
Subsidiaries, and extensions of credit by Holdings to any of its Wholly-Owned
Subsidiaries or by any of its Wholly-Owned Subsidiaries to Holdings or to any
other Wholly-Owned Subsidiaries in the ordinary course of business;
(d) Investments constituting Minority Investments and
Investments incurred in order to consummate Permitted Acquisitions, PROVIDED
that (i) all such Investments in the aggregate, PLUS the aggregate amount of
dispositions under subsection 8.02(f), do not exceed $60,000,000 in any calendar
year (the "ANNUAL LIMIT"), (ii) all such Investments constituting Minority
Investments, PLUS the aggregate amount of dispositions under subsection 8.02(f),
do not exceed a sublimit of $25,000,000 in any calendar year, and (iii) no such
Investment shall be made if the Subsidiary or the Person in which Holdings has a
Minority Investment, as the case may be, that is the subject of such Investment
shall not be a U.S. Subsidiary or is located outside the United States;
(e) Investments constituting Permitted Swap Obligations or
payments or advances under Swap Contracts relating to Permitted Swap
Obligations; and
(f) officer, shareholder, director and employee loans and
guarantees in accordance with Holdings' and its Subsidiaries' usual and
customary practices with respect thereto in aggregate amount not exceeding
$1,000,000 at any time.
8.05 LIMITATION ON INDEBTEDNESS. Holdings shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations
permitted pursuant to Section 8.08;
(c) Indebtedness existing on the Closing Date and set forth in
SCHEDULE 8.05;
(d) Indebtedness secured by Liens permitted by clauses (ix),
(x) and (xiv) of subsection 8.01(a) in an aggregate amount outstanding not to
exceed $25,000,000;
(e) Indebtedness of Wholly-Owned Subsidiaries of Holdings to
Holdings or to other Wholly-Owned Subsidiaries of Holdings;
(f) Indebtedness incurred pursuant to sales and leaseback
transactions permitted under Section 8.14;
(g) Indebtedness owing under the Senior Subordinated Notes;
(h) additional unsecured Indebtedness incurred after the
Closing Date in an aggregate amount not to exceed $25,000,000, PROVIDED that (i)
no such Indebtedness shall be incurred while there exists a Default or if a
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Default would occur as a result thereof, and (ii) without limiting the
generality of the foregoing, as of the end of the most recent quarter for which
Holdings has delivered financial statements under subsection 7.01(a) or 7.01(b)
and immediately after giving effect to such incurrence, Holdings shall be in
full compliance with subsections 8.19(a) and 8.19(b); and
(i) additional Indebtedness which by its terms is expressly
subordinated to the Obligations, PROVIDED that (i) the terms of such
subordination shall be satisfactory to the Majority Banks, (ii) the terms of
such Indebtedness and the indenture or other agreement evidencing such
Indebtedness otherwise shall be satisfactory in all material respects to the
Majority Banks (including terms and conditions relating to the interest rate,
fees, amortization, maturity, covenants, events of default and remedies), (iii)
no such Indebtedness shall be incurred while there exists a Default or if a
Default would occur as a result thereof, and (iv) without limiting the
generality of the foregoing, as of the end of the most recent quarter for which
Holdings has delivered financial statements under subsection 7.01(a) or 7.01(b)
and immediately after giving effect to such incurrence, Holdings shall be in
full compliance with subsections 8.19(a) and, if then applicable, 8.19(b) (any
such Indebtedness issued in compliance with this subsection (i) hereinafter
"PERMITTED ADDITIONAL SUBORDINATED DEBT").
Notwithstanding anything to the contrary in this Section 8.05, the Indebtedness
of all Subsidiaries that are not Guarantors which is otherwise permitted under
this Section 8.05 shall not exceed $5,000,000 in the aggregate at any time
outstanding.
8.06 TRANSACTIONS WITH AFFILIATES. Holdings shall not, and shall
not suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate of Holdings, except upon fair and reasonable terms no less favorable
to Holdings or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate of Holdings or such Subsidiary.
8.07 USE OF PROCEEDS. Holdings shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds or any Letter of
Credit, directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to
repay or otherwise refinance indebtedness of Holdings or others incurred to
purchase or carry Margin Stock, or (iii) to extend credit for the purpose of
purchasing or carrying any Margin Stock.
8.08 CONTINGENT OBLIGATIONS. Holdings shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations, except:
(a) endorsements for collection or deposit in the ordinary
course of business;
(b) Permitted Swap Obligations;
(c) Contingent Obligations of Holdings in respect of
Indebtedness of any of its Wholly-Owned Subsidiaries, or Contingent Obligations
of any of its Wholly-Owned Subsidiaries in respect of Indebtedness of another of
its Wholly-Owned Subsidiaries or of Holdings, in each case to the extent such
Indebtedness is permitted hereunder;
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(d) Contingent Obligations of Holdings and its Subsidiaries
existing as of the Closing Date and listed in SCHEDULE 8.08;
(e) Contingent Obligations with respect to Surety Instruments
incurred in the ordinary course of business and not exceeding at any time
$5,000,000 in the aggregate in respect of Holdings and its Subsidiaries
together;
(f) Contingent Obligations of Subsidiaries of Holdings owing
under the Senior Subordinated Note Documents in respect of Indebtedness of
Holdings owing under the Senior Subordinated Note Documents; and
(g) Contingent Obligations of Holdings with respect to Stock
Price Guaranties incurred in the ordinary course of business and not exceeding
at any time $5,000,000 in the aggregate.
Notwithstanding anything to the contrary in this Section 8.08, the Contingent
Obligations of all Subsidiaries that are not Guarantors which are otherwise
permitted under this Section 8.08 shall not exceed $5,000,000 in the aggregate
at any time outstanding.
8.09 SUBSIDIARIES. Holdings shall not, and shall not suffer or
permit any Subsidiary to, incorporate, create or acquire any Subsidiary which is
not a U.S. Subsidiary.
8.10 LEASE OBLIGATIONS. Holdings shall not, and shall not suffer or
permit any Subsidiary to, create or suffer to exist any obligations for the
payment of rent for any property under any Operating Lease, which exceed
$15,000,000 in aggregate amount in any fiscal year.
8.11 RESTRICTED PAYMENTS. Holdings shall not, and shall not suffer
or permit any Subsidiary to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock (other than dividends or
other distributions by a Subsidiary to Holdings), or purchase, redeem or
otherwise acquire for value any shares of its capital stock or any warrants,
rights or options to acquire such shares, now or hereafter outstanding; except
that Holdings may:
(a) declare and make dividend payments or other distributions
payable solely in its common stock;
(b) purchase, redeem or otherwise acquire shares of its common
stock or warrants or options to acquire any such shares with the proceeds
received from the substantially concurrent issue of new shares of its common
stock; and
(c) allow any Subsidiary that is not a Wholly-Owned Subsidiary
to make distributions to its owners (on a pro rata basis).
8.12 ERISA. Holdings shall not, and shall not suffer or permit any
of its ERISA Affiliates to: (a) engage in a prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan which has
resulted or could reasonably expected to result in liability of Holdings in an
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aggregate amount in excess of $500,000; or (b) engage in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
8.13 CAPITAL EXPENDITURES. Holdings shall not, and shall not permit
any of its Subsidiaries to, make any Capital Expenditures in excess of, on a
consolidated basis, in any fiscal year, the sum of (a) the Capital Expenditure
Annual Limit PLUS (b) so long as no Event of Default has occurred and is
continuing, the Permitted Capital Expenditure Carry-Forward for all prior fiscal
years (beginning with fiscal year 1999).
8.14 SALES AND LEASEBACKS. Holdings shall not, and shall not permit
any of its Subsidiaries to, become liable, directly or indirectly, with respect
to any lease, whether an Operating Lease or a Capital Lease, of any property
(whether real, personal or mixed), whether now owned or hereafter acquired, (i)
which Holdings or such Subsidiary has sold or transferred or is to sell or
transfer to any other Person or (ii) which Holdings or such Subsidiary intends
to use for substantially the same purposes as any other property which has been
or is to be sold or transferred by Holdings or such Subsidiary to any other
Person in connection with such lease; PROVIDED that Holdings and any of its
Subsidiaries may enter into any such lease if (A) no Default shall then exist or
would occur as a result thereof, (B) as of the end of the most recent quarter
for which Holdings has delivered financial statements under subsection 7.01(a)
or 7.01(b) and immediately after giving effect to any such lease, Holdings shall
be in full compliance with subsections 8.19(a), 8.19(b) and 8.19(c) and (C) the
aggregate amount of Indebtedness incurred in connection with all such leases
shall not exceed $25,000,000 at any time outstanding.
8.15 CERTAIN PAYMENTS. Holdings shall not, and shall not permit any
of its Subsidiaries to, (i) prepay, redeem, repurchase or otherwise acquire for
value any of the Subordinated Debt; or (ii) make any principal, interest or
other payments on any Subordinated Debt if not permitted by the respective
subordination provisions of the Subordinated Debt Documents.
8.16 MODIFICATION OF SUBORDINATED DEBT DOCUMENTS. Holdings shall
not, and shall not permit any of its Subsidiaries to, agree to or permit any
amendment, modification or waiver of any provision of any Subordinated Debt
Document (including any amendment, modification or waiver pursuant to an
exchange of other securities or instruments for outstanding Subordinated Debt)
if the effect of such amendment, modification or waiver is to (i) increase the
interest rate on such Subordinated Debt or change (to earlier dates) the dates
upon which principal and interest are due thereon; (ii) alter the redemption,
prepayment or subordination provisions thereof; (iii) alter the covenants and
events of default in a manner which would make such provisions more onerous or
restrictive to Holdings or such Subsidiary; or (iv) otherwise increase the
obligations of Holdings or such Subsidiary in respect of such Subordinated Debt
or confer additional rights upon the holders thereof which individually or in
the aggregate would be adverse to Holdings, its Subsidiaries or the Banks.
8.17 CHANGE IN BUSINESS. Holdings shall not, and shall not suffer
or permit any Subsidiary to, engage in any material line of business
substantially different from those lines of business carried on by Holdings and
its Subsidiaries on the date hereof and lines of business ancillary thereto.
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8.18 ACCOUNTING CHANGES. Holdings shall not, and shall not suffer
or permit any Subsidiary to, make any significant change in accounting treatment
or reporting practices, except as required by GAAP, or change the fiscal year of
Holdings or of any Subsidiary, except to change the fiscal year of a Subsidiary
to conform its fiscal year to that of Holdings.
8.19 FINANCIAL COVENANTS. (a) Holdings shall not permit as at the
end of any fiscal quarter, measured on a consolidated basis for Holdings and its
Subsidiaries for the period of four fiscal quarters ended on such date in
accordance with GAAP, Total Funded Debt to be an amount which exceeds 60% of
Capitalization.
(b) From and after the date on which the Liens of the Agent
and the Banks in respect of the Collateral (other than the Pledged Collateral)
are released pursuant to subsection 2.16(b), Holdings shall not permit as at the
end of any fiscal quarter, measured on a consolidated basis for Holdings and its
Subsidiaries for the period of four fiscal quarters ended on such date in
accordance with GAAP, Senior Funded Debt to be an amount which exceeds 55% of
Capitalization.
(c) Holdings shall not permit its Consolidated Net Worth as of
the last day of any fiscal quarter to be less than $169,016,000, PLUS (b) 50% of
Consolidated Net Income for each fiscal quarter (without giving effect to any
net loss for any such period) ending after September 30, 1999, PLUS (c) 50% of
all Net Issuance Proceeds from and after September 30, 1999, MINUS (d) the
prepayment premium paid (after taxes) by Holdings or the Company to the holders
of the Senior Secured Notes in connection with the repayment of the Senior
Secured Notes and any write-offs of deferred financing costs by Holdings or the
Company associated with such repayment of the Senior Secured Notes (after
taxes).
(d) Holdings shall not permit as at the end of any fiscal
quarter, measured on a consolidated basis for Holdings and its Subsidiaries for
the period of four fiscal quarters ended on such date in accordance with GAAP,
the ratio of (i) EBITA to (ii) the sum of (A) cash Interest Expense, PLUS (B)
cash taxes, PLUS (C) scheduled principal payments in respect of Indebtedness
(but excluding any principal payments in respect of the Senior Secured Notes),
to be less than 1.20 to 1.00.
8.20 NO RESTRICTIONS ON SUBSIDIARY DIVIDENDS. Holdings shall not,
and shall not suffer or permit any Subsidiary to, enter into or be bound by any
Contractual Obligation which restricts, limits or prohibits the payment of
dividends by any Subsidiary or the making of any other distribution in respect
of such Subsidiary's capital stock.
ARTICLE IX
EVENTS OF DEFAULT
9.01 EVENT OF DEFAULT. Any of the following shall constitute an
"EVENT OF DEFAULT":
(a) NON-PAYMENT. Holdings fails to make, (i) when and as
required to be made herein, payments of any amount of principal of any Loan or
of any L/C Obligation, (ii) when and as required to be paid under any Specified
79
Swap Contract, any payment or transfer under such Specified Swap Contract, or
(iii) within three Business Days after the same becomes due, payment of any
interest, fee or any other amount payable hereunder or under any other Loan
Document (other than a Specified Swap Contract); or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty
by any Loan Party made or deemed made herein, in any other Loan Document (other
than a Specified Swap Contract), or which is contained in any certificate,
document or financial or other statement by any Loan Party, or any Responsible
Officer, furnished at any time under this Agreement, or in or under any other
Loan Document (other than a Specified Swap Contract), is incorrect in any
material respect on or as of the date made or deemed made; or
(c) SPECIFIC DEFAULTS. Holdings or the Company fails to
perform or observe any term, covenant or agreement contained in any of Section
7.04(a)(i), or 7.12 or in Article VIII; or
(d) OTHER DEFAULTS. Any Loan Party fails to perform or observe
any other term or covenant contained in this Agreement or any other Loan
Document (other than a Specified Swap Contract), and such default shall continue
unremedied for a period of 20 days after the earlier of (i) the date upon which
a Responsible Officer of Holdings or the Company obtained actual knowledge of
such failure and (ii) the date upon which written notice thereof is given to
Holdings by the Agent or any Bank; or
(e) CROSS-DEFAULT. (i) Holdings or any Subsidiary (A) fails to
make any payment in respect of any Indebtedness or Contingent Obligation (other
than in respect of Swap Contracts), having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more than
$1,000,000 when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure; or (B) fails to perform or observe any other condition
or covenant, or any other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness or Contingent
Obligation, and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure
if the effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity, or such Contingent Obligation to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (1) any event of default under such Swap
Contract as to which Holdings or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (2) any Termination Event (as so defined) as
to which Holdings or any Subsidiary is an Affected Party (as so defined), and,
in either event, the Swap Termination Value owed by Holdings or such Subsidiary
as a result thereof is greater than $1,000,000; or
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(f) INSOLVENCY; VOLUNTARY PROCEEDINGS. Holdings or any
Subsidiary (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency
Proceeding is commenced or filed against Holdings or any Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of Holdings' or any Subsidiary's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) Holdings or any Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) Holdings or any Subsidiary acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its
property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of Holdings under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$500,000; the aggregate amount of Unfunded Pension Liability among all Pension
Plans at any time exceeds $500,000; or (iii) Holdings or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$500,000; or
(i) MONETARY JUDGMENTS. One or more non-interlocutory
judgments, non-interlocutory orders, decrees or arbitration awards is entered
against Holdings or any Subsidiary involving in the aggregate a liability (to
the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related or unrelated
series of transactions, incidents or conditions, of $1,000,000 or more, and the
same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of 30 days after the entry thereof; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order
or decree is entered against Holdings or any Subsidiary which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be any
81
period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(k) CHANGE OF CONTROL. There occurs any Change of Control; or
(l) GUARANTOR DEFAULTS. Any Guarantor fails in any material
respect to perform or observe any term, covenant or agreement in its Guaranty;
or any Guaranty is for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise ceases to be in full
force and effect, or such Guarantor or any other Person contests in any manner
the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder; or any event described at subsections (f) or
(g) of this Section occurs with respect to the Guarantor; or
(m) INVALIDITY OF SUBORDINATION PROVISIONS. The subordination
provisions applicable to the Subordinated Debt shall be for any reason revoked
or invalidated, or otherwise cease to be in full force and effect, or the
holders thereof or any other Person shall contest in any manner the validity or
enforceability thereof or denies that it has any further liability or obligation
thereunder, or the Indebtedness hereunder is for any reason subordinated or does
not have the priority contemplated by this Agreement or such subordination
provisions.
(n) COLLATERAL. (i) Any provision of any Collateral Document
shall for any reason cease to be valid and binding on or enforceable against
Holdings or any Subsidiary party thereto or Holdings or any Subsidiary shall so
state in writing or bring an action to limit its obligations or liabilities
thereunder; or (ii) any Collateral Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid security interest in the
Collateral purported to be covered thereby or such security interest shall for
any reason cease to be a perfected and first priority security interest subject
only to Permitted Liens.
9.02 REMEDIES. If any Event of Default occurs, the Agent shall, at
the request of, or may, with the consent of, the Majority Banks, do any or all
of the following:
(a) declare the obligation of each Bank to make any Loans
hereunder and any obligation of the Issuing Bank to Issue any Letters of Credit
hereunder to be terminated, whereupon such obligations and each Bank's
Commitment and the L/C Commitment shall be terminated;
(b) declare an amount equal to the maximum aggregate amount
that is or at any time thereafter may become available for drawing under any
outstanding Letters of Credit (whether or not any beneficiary shall have
presented, or shall be entitled at such time to present, the drafts or other
documents required to draw under such Letters of Credit) to be immediately due
and payable, which amount shall be held by the Agent as security for Holdings'
reimbursement obligations for drawings that may subsequently occur under
outstanding Letters of Credit, and declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
82
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by Holdings; and
(c) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or applicable
law;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 9.01 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans and any obligation of the Issuing Bank to Issue Letters of Credit
shall automatically terminate and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable without further act of the Agent, the Issuing Bank or any Bank.
9.03 SPECIFIED SWAP CONTRACT REMEDIES. Notwithstanding any other
provision of this Article IX, each Swap Provider shall have the right, with
prior notice to the Agent, but without the approval or consent of the Agent or
the other Banks, with respect to any Specified Swap Contract of such Swap
Provider, (a) to declare an event of default, termination event or other similar
event thereunder and to create an Early Termination Date (as defined in such
Specified Swap Contract), (b) to determine net termination amounts in accordance
with the terms of such Specified Swap Contracts and to set-off amounts between
such Specified Swap Contracts, and (c) to prosecute any legal action against
Holdings to enforce net amounts owing to such Swap Provider.
ARTICLE X
THE AGENT
10.01 APPOINTMENT AND AUTHORIZATION; "AGENT". (a) Each Bank hereby
irrevocably (subject to Section 10.09) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(b) The Issuing Bank shall act on behalf of the Banks with
respect to any Letters of Credit Issued by it and the documents associated
therewith until such time and except for so long as the Agent may agree at the
request of the Majority Banks to act for the Issuing Bank with respect thereto;
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PROVIDED, HOWEVER, that the Issuing Bank shall have all of the benefits and
immunities (i) provided to the Agent in this Article X with respect to any acts
taken or omissions suffered by the Issuing Bank in connection with Letters of
Credit Issued by it or proposed to be Issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully as
if the term "Agent," as used in this Article X, included the Issuing Bank with
respect to such acts or omissions, and (ii) as additionally provided in this
Agreement with respect to the Issuing Bank.
10.02 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
10.03 LIABILITY OF AGENT. None of the Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Banks for any
recital, statement, representation or warranty made by Holdings or any
Subsidiary or Affiliate of Holdings, or any officer thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
for the value of or title to any Collateral, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Loan Party or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Bank to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of Holdings or any of its Subsidiaries or
Affiliates.
10.04 RELIANCE BY AGENT (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to any Loan Party), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Banks as it deems appropriate
and, if it so requests, it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Majority Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
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(b) For purposes of determining compliance with the conditions
specified in Section 5.01, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent (or made available) by the Agent to such
Bank for consent, approval, acceptance or satisfaction, or required thereunder
to be consented to or approved by or acceptable or satisfactory to such Bank.
10.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Banks, unless the Agent shall
have received written notice from a Bank or any Loan Party referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." The Agent will notify the Banks of its receipt
of any such notice. The Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Majority Banks in
accordance with Article IX; PROVIDED, HOWEVER, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Banks.
10.06 CREDIT DECISION. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of
Holdings and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of
Holdings and its Subsidiaries, the value of and title to any Collateral, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to any Loan Party hereunder. Each Bank also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of any Loan Party. Except for notices, reports and other
documents expressly herein required to be furnished to the Banks by the Agent,
the Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of Holdings or any
Subsidiary which may come into the possession of any of the Agent-Related
Persons.
10.07 INDEMNIFICATION OF AGENT. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company or Holdings and without limiting the obligation of the Company and
Holdings to do so), in accordance with the Banks' Pro Rata Shares, from and
against any and all Indemnified Liabilities; PROVIDED, HOWEVER, that no Bank
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shall be liable for the payment to the Agent-Related Persons of any portion of
such Indemnified Liabilities to the extent they are found by a final decision of
a court of competent jurisdiction to have resulted solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Bank shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of Holdings and the Company. The
undertaking in this Section shall survive the termination of the Commitments,
the termination or expiration of all Letters of Credit, the payment of all other
Obligations hereunder and the resignation or replacement of the Agent.
10.08 AGENT IN INDIVIDUAL CAPACITY. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with Holdings and its
Subsidiaries and Affiliates as though BofA were not the Agent or the Issuing
Bank hereunder and without notice to or consent of the Banks. The Banks
acknowledge that, pursuant to such activities, BofA or its Affiliates may
receive information regarding Holdings or its Subsidiaries or Affiliates
(including information that may be subject to confidentiality obligations in
favor of Holdings or such Subsidiary or Affiliate) and acknowledge that the
Agent shall be under no obligation to provide such information to them. With
respect to its Loans, BofA shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not the
Agent or the Issuing Bank.
10.09 SUCCESSOR AGENT. The Agent may, and at the request of the
Majority Banks shall, resign as Agent upon 30 days' notice to the Banks. If the
Agent resigns under this Agreement, the Majority Banks shall appoint from among
the Banks a successor agent for the Banks. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Banks and Holdings, a successor agent from
among the Banks. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article X and Sections 11.04 and 11.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Banks appoint a successor agent as provided for
above. Notwithstanding the foregoing, however, BofA may not be removed as the
Agent at the request of the Majority Banks unless BofA shall also simultaneously
be replaced as "Issuing Bank" and "Swingline Bank" hereunder pursuant to
documentation in form and substance reasonably satisfactory to BofA.
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10.10 WITHHOLDING TAX. (a) If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Bank claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Bank agrees with and in favor of the Agent, to deliver to
the Agent:
(i) if such Bank claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, two properly completed and
executed copies of IRS Form W-8BEN before the payment of any interest or fees in
the first calendar year and before the payment of any interest or fees in each
third succeeding calendar year during which interest or fees may be paid under
this Agreement;
(ii) if such Bank claims that interest or fees paid under
this Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such Bank, two
properly completed and executed copies of IRS Form W-8ECI before the payment of
any interest or fees is due in the first taxable year of such Bank and in each
succeeding taxable year of such Bank during which interest or fees may be paid
under this Agreement; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN
and such Bank sells, assigns, grants a participation in, or otherwise transfers
all or part of the Obligations of Holdings owing to such Bank, such Bank agrees
to notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of Holdings owing to such Bank. To the extent of
such percentage amount, the Agent will treat such Bank's IRS Form W-8BEN as no
longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form W-8ECI with the Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations of
Holdings owing to such Bank, such Bank agrees to undertake sole responsibility
for complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into account
such reduction. However, if the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Bank not providing such forms or
other documentation an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction.
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(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered or was not properly executed, or
because such Bank failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Bank shall indemnify the Agent fully for all amounts
paid, directly or indirectly, by the Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section, together with all costs and
expenses (including reasonable Attorney Costs). The obligation of the Banks
under this subsection shall survive the termination of the Commitments, the
termination or expiration of all Letters of Credit, the payment of all other
Obligations hereunder and the resignation or replacement of the Agent.
(f) Each Bank party to this Agreement as of the Closing Date
represents and warrants to the Agent and Holdings as of the Closing Date that
under applicable law and treaties no tax is required to be withheld by Holdings
or the Agent with respect to any payments to be made to such Bank hereunder.
10.11 COLLATERAL MATTERS.
(a) The Agent is authorized on behalf of all the Banks,
without the necessity of any notice to or further consent from the Banks, from
time to time to take any action with respect to any Collateral or the Collateral
Documents which may be necessary to perfect and maintain perfected the security
interest in and Liens upon the Collateral granted pursuant to the Collateral
Documents.
(b) The Banks irrevocably authorize the Agent, at its option
and in its discretion, to release any Lien granted to or held by the Agent upon
any Collateral (i) upon termination of the Commitments and payment in full of
all Loans and all other Obligations known to the Agent and payable under this
Agreement or any other Loan Document; (ii) constituting property sold or to be
sold or disposed of as part of or in connection with any disposition permitted
hereunder; (iii) constituting property in which Holdings or any Subsidiary owned
no interest at the time the Lien was granted or at any time thereafter; (iv)
constituting property leased to Holdings or any Subsidiary in a transaction
permitted under this Agreement; (v) consisting of an instrument evidencing
Indebtedness or other debt instrument, if the indebtedness evidenced thereby has
been paid in full; (vi) constituting real property to be excluded from the
Collateral pursuant to matters arising under Section 7.15; or (vii) if approved,
authorized or ratified in writing by the Majority Banks or all the Banks, as the
case may be, as provided in subsection 11.01(f). Upon request by the Agent at
any time, the Banks will confirm in writing the Agent's authority to release
particular types or items of Collateral pursuant to this subsection 10.11(b),
PROVIDED that the absence of any such confirmation for whatever reason shall not
affect the Agent's rights under this Section 10.11.
(c) Each Bank agrees with and in favor of each other (which
agreement shall not be for the benefit of Holdings or any Subsidiary) that the
Obligations to such Bank under this Agreement and the other Loan Documents shall
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not be secured by any real property collateral now or hereafter acquired by such
Bank other than the Mortgaged Properties described in the Mortgages.
10.12 SENIOR MANAGING AGENTS; CO-AGENTS. None of the Banks
identified on the facing page or signature pages of this Agreement as a "senior
managing agent" or a "co-agent" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Banks as such. Without limiting the foregoing, none of the
Banks so identified as a "senior managing agent" or a "co-agent" shall have or
be deemed to have any fiduciary relationship with any Bank. Each Bank
acknowledges that it has not relied, and will not rely, on any of the Banks so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE XI
MISCELLANEOUS
11.01 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by any Loan Party therefrom, shall be effective unless
the same shall be in writing and signed by the Majority Banks (or by the Agent
at the written request of the Majority Banks) and such Loan Party and
acknowledged by the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; PROVIDED, HOWEVER, that no such waiver, amendment, or consent shall,
unless in writing and signed by all the Banks and acknowledged by the Agent, do
any of the following:
(a) increase or extend the Commitment of any Bank (or
reinstate any Commitment terminated pursuant to Section 9.02);
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Banks (or any of them) hereunder or under any other Loan
Document (including the date of any mandatory prepayment hereunder);
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or (subject to clause (iii) below) any fees or other amounts
payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Banks
or any of them to take any action hereunder;
(e) discharge any Guarantor except as otherwise may be
provided herein;
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(f) release any portion of the Collateral except as otherwise
may be provided herein or in the Collateral Documents or except where the
consent of the Majority Banks only is specifically provided for;
(g) amend this Section 11.01, Section 2.15, the definition of
"Majority Banks" herein, or any provision herein providing for consent or other
action by all Banks or some specified amount of Banks; or
(h) waive any of the conditions precedent to the Closing Date
set forth in subsections 5.01(m) and 5.01(n); or
(i) amend the definition of "Borrowing Base" herein;
and, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Majority Banks or all
the Banks, as the case may be, affect the rights or duties of the Issuing Bank
under this Agreement or any L/C-Related Document relating to any Letter of
Credit Issued or to be Issued by it, (ii) no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Majority Banks or
all the Banks, as the case may be, affect the rights or duties of the Agent
under this Agreement or any other Loan Document, (iii) the Fee Letter and
documents evidencing Specified Swap Contracts may be amended, or rights or
privileges thereunder waived, in a writing executed by the parties thereto, and
(iv) no amendment, waiver or consent shall, unless in writing and signed by the
Swingline Bank in addition to the Majority Banks or all the Banks, as the case
may be, increase the Swingline Commitment or otherwise affect the rights or
duties of the Swingline Bank under this Agreement.
11.02 NOTICES. (a) All notices, requests, consents, approvals,
waivers and other communications shall be in writing (including, unless the
context expressly otherwise provides, by facsimile transmission, but excluding
by electronic mail unless accompanied by notice delivered via one of the other
methods specified herein), and mailed, faxed or delivered, to the address or
facsimile number specified for notices on SCHEDULE 11.02; or, as directed to
Holdings, the Company or the Agent, to such other address as shall be designated
by such party in a written notice to the other parties, and as directed to any
other party, at such other address as shall be designated by such party in a
written notice to Holdings, the Company and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the mails, or if delivered, upon delivery; except that notices
pursuant to Article II, III or X to the Agent shall not be effective until
actually received by the Agent, notices pursuant to Article III to the Issuing
Bank shall not be effective until actually received by the Issuing Bank at the
address specified for the "Issuing Bank" on SCHEDULE 11.02 and notices pursuant
to Article II to the Swingline Bank shall not be effective until actually
received by the Swingline Bank, at the address specified for such Person on
SCHEDULE 11.02.
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(c) Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of Holdings. The Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by Holdings to
give such notice and the Agent and the Banks shall not have any liability to
Holdings or other Person on account of any action taken or not taken by the
Agent or the Banks in reliance upon such telephonic or facsimile notice. The
obligation of Holdings to repay the Loans and L/C Obligations shall not be
affected in any way or to any extent by any failure by the Agent and the Banks
to receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Banks of a confirmation which is at variance with
the terms understood by the Agent and the Banks to be contained in the
telephonic or facsimile notice.
11.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
11.04 COSTS AND EXPENSES. Holdings shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Agent and
Issuing Bank) within five Business Days after demand (subject to subsection
5.01(e)) for all costs and expenses incurred by BofA (including in its capacity
as Agent and Issuing Bank) in connection with (i) the development, preparation,
delivery, administration and execution of, and any amendment, supplement, waiver
or modification to (in each case, whether or not consummated), this Agreement,
any Loan Document and any other documents prepared in connection herewith or
therewith, (ii) the consummation of the transactions contemplated hereby and
thereby, and (iii) the syndication and assignment following the Closing Date of
all or any part of BofA's interest as Bank hereunder, including reasonable
Attorney Costs incurred by BofA (including in its capacity as Agent and Issuing
Bank) with respect thereto;
(b) pay or reimburse the Agent, the Lead Arranger and each
Bank within five Business Days after demand (subject to subsection 5.01(e)) for
all invoiced (or otherwise documented) costs and expenses (including Attorney
Costs) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
any other Loan Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding or
appellate proceeding); and
(c) pay or reimburse BofA (including in its capacity as Agent)
within five Business Days after demand (subject to subsection 5.01(e)) for all
appraisal (including the allocated cost of internal appraisal services), audit,
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environmental inspection and review (including the allocated cost of such
internal services), search and filing costs, fees and expenses, incurred or
sustained by BofA (including in its capacity as Agent) in connection with the
matters referred to under subsections (a) and (b) of this Section.
11.05 INDEMNIFICATION.
(a) Whether or not the transactions contemplated hereby are
consummated, each of Holdings and the Company shall indemnify, defend and hold
the Agent-Related Persons, and each Bank and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"INDEMNIFIED PERSON") harmless from and against any and all liabilities, claims,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
settlement costs, charges, expenses and disbursements (including reasonable
Attorney Costs) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Loans, the termination of all
Specified Swap Contracts, the termination of the Letters of Credit and the
termination, resignation or replacement of the Agent or replacement of any Bank)
be imposed on, incurred by or asserted against any such Person in any way
relating to or arising out of this Agreement, the other Loan Documents or any
document contemplated by or referred to therein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement, the Specified
Swap Contracts, the Loans or Letters of Credit or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "INDEMNIFIED LIABILITIES"); PROVIDED that neither
Holdings nor the Company shall have any obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities to the extent they are found by a
final decision of a court of competent jurisdiction to have resulted primarily
from the gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section and in Section 11.04 shall survive the termination of
the Commitments, the termination or expiration of all Letters of Credit and the
payment of all other Obligations.
(b) (i) Each of Holdings and the Company shall indemnify,
defend and hold harmless each Indemnified Person, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses or disbursements (including Attorney Costs and the
allocated cost of internal environmental audit or review services), which may be
incurred by or asserted against such Indemnified Person in connection with or
arising out of any pending or threatened investigation, litigation or
proceeding, or any action taken by any Person, with respect to any Environmental
Claim arising out of or related to any property subject to a Mortgage in favor
of the Agent or any Bank. No action taken by legal counsel chosen by the Agent
or any Bank in defending against any such investigation, litigation or
proceeding or requested remedial, removal or response action shall vitiate or
any way impair Holdings' and the Company's obligation and duty hereunder to
indemnify and hold harmless the Agent and each Bank.
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(ii) In no event shall any site visit, observation, or
testing by the Agent or any Bank (or any contractee of the Agent or any Bank) be
deemed a representation or warranty that Hazardous Materials are or are not
present in, on, or under, the site, or that there has been or shall be
compliance with any Environmental Law. Neither Holdings nor any other Person is
entitled to rely on any site visit, observation, or testing by the Agent or any
Bank. Neither the Agent nor any Bank owes any duty of care to protect Holdings
or any other Person against, or to inform Holdings or any other Person of, any
Hazardous Materials or any other adverse condition affecting any site or
property. Neither the Agent nor any Bank shall be obligated to disclose to
Holdings or any other Person any report or findings made as a result of, or in
connection with, any site visit, observation, or testing by the Agent or any
Bank.
(c) The obligations in this Section shall survive payment of
all other Obligations. At the election of any Indemnified Person, Holdings shall
defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person's sole discretion, at the sole cost and
expense of Holdings. All amounts owing under this Section shall be paid within
30 days after demand.
11.06 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor the
Banks shall be under any obligation to marshal any assets in favor of Holdings
or any other Person or against or in payment of any or all of the Obligations.
To the extent that any Loan Party makes a payment to the Agent or the Banks, or
the Agent or the Banks exercise their right of set-off, and such payment or the
proceeds of such set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Agent or such Bank in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Bank
severally agrees to pay to the Agent upon demand its Pro Rata Share of any
amount so recovered from or repaid by the Agent.
11.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that a Loan Party may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agent and each Bank.
11.08 ASSIGNMENTS, PARTICIPATIONS, ETC. (a) Any Bank may, with
the written consent of Holdings, the Agent, the Issuing Bank and the Swingline
Bank (which in each case shall not be unreasonably withheld), at any time assign
and delegate to one or more Eligible Assignees (each an "ASSIGNEE") all, or any
ratable part of all, of the Loans, the Commitment, the L/C Obligations and the
other rights and obligations of such Bank hereunder; PROVIDED, HOWEVER, that (i)
no written consent of Holdings shall be required during the existence of a
Default or an Event of Default; (ii) no written consent of Holdings or the
Agent, the Issuing Bank or the Swingline Bank shall be required in connection
with any assignment and delegation by a Bank to an Eligible Assignee that is
another Bank or an Affiliate of such Bank, PROVIDED that if the proposed
Assignee is another Bank, the Bank seeking to assign its interests hereunder
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shall consult with Holdings and the Agent before entering into such assignment);
(iii) except in connection with an assignment of all of a Bank's rights and
obligations with respect to its Commitment, Loans and L/C Obligations, any such
assignment to an Eligible Assignee that is not a Bank hereunder shall be equal
to or greater than $5,000,000; and (iv) each such partial assignment shall be of
a ratable part of the Loans, the Commitment and the other interests, rights and
obligations hereunder of such assigning Bank; and PROVIDED FURTHER, HOWEVER,
that Holdings and the Agent may continue to deal solely and directly with such
Bank in connection with the interest so assigned to an Assignee until (A) such
Bank and its Assignee shall have delivered to Holdings and the Agent an
Assignment and Acceptance Agreement substantially in the form of Exhibit E
("Assignment and Acceptance"), together with any Note or Notes subject to such
assignment; (B) a written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee, in
substantially the form of the Notice of Assignment and Acceptance attached as
Schedule 1 to the Assignment and Acceptance, shall have been given to Holdings
and the Agent by such Bank and the Assignee; (C) the assignor Bank or Assignee
shall have paid to the Agent a processing fee in the amount of $4,000 and (D)
the Agent, Holdings, the Issuing Bank and the Swingline Bank each shall have
provided any required consent to such assignment in accordance with this
Section. In connection with any assignment by BofA, its Swingline Commitment may
be assigned in whole (and not part) and only in connection with an assignment
transaction involving an assignment of all of its Commitment and Loans, and the
Assignment and Acceptance may be appropriately modified to include an assignment
and delegation of its Swingline Commitment and any outstanding Swingline Loans.
(b) From and after the date that the Agent notifies the
assignor Bank that the Agent has received (and, if required, provided its
consent with respect thereto and received any other consents required under this
Section 11.08) an executed Assignment and Acceptance and payment of the
above-referenced processing fee, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Bank under the Loan Documents, (ii) this Agreement shall be
deemed to be amended to the extent, but only to the extent, necessary to reflect
the addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom, and (iii) the assignor Bank shall, to the extent that rights
and obligations hereunder and under the other Loan Documents have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents; PROVIDED, HOWEVER, that
the assignor Bank shall not relinquish its rights under Article IV or under
Sections 11.04 and 11.05 to the extent such rights relate to the time prior to
the effective date of the Assignment and Acceptance. The Commitment allocated to
each Assignee shall reduce the Commitment of the assigning Bank pro tanto.
(c) Within five Business Days after Holding's receipt of
notice by the Agent that it has received (and, if necessary, consented to) an
executed Assignment and Acceptance and payment of the processing fee (and
PROVIDED that the Issuing Bank, the Swingline Bank and Holdings each consent to
such assignment in accordance with subsection 11.08(a)), Holdings shall execute
and deliver to the Agent any new Note requested by such Assignee evidencing such
Assignee's assigned Loans and Commitment and, if the assignor Bank has retained
a portion of its Loans and its Commitment, replacement Notes as requested by the
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assignor Bank evidencing the Loans and Commitment retained by the assignor Bank
(such Note to be in exchange for, but not in payment of, the Note held by such
Bank, if any).
(d) Any Bank may at any time sell to one or more commercial
banks or other Persons not Affiliates of Holdings (a "PARTICIPANT")
participating interests in any Loans, the Commitment of that Bank and the other
interests of that Bank (the "ORIGINATING BANK") hereunder and under the other
Loan Documents; PROVIDED, HOWEVER, that (i) the originating Bank's obligations
under this Agreement shall remain unchanged, (ii) the originating Bank shall
remain solely responsible for the performance of such obligations, (iii)
Holdings, the Issuing Bank and the Agent shall continue to deal solely and
directly with the originating Bank in connection with the originating Bank's
rights and obligations under this Agreement and the other Loan Documents, and
(iv) no Bank shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment, consent or waiver would require unanimous consent of the Banks
as described in the first proviso to Section 11.01. In the case of any such
participation, the Participant shall be entitled to the benefit of Sections
4.01, 4.03 and 11.05 as though it were also a Bank hereunder, and except that,
if amounts outstanding under this Agreement are due and unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall be deemed to have the right of set-off
in respect of its participating interest in amounts owing under this Agreement
to the same extent as if the amount of its participating interest were owing
directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any
Bank may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and any Note held by
it (other than in respect of Swingline Loans) in favor of any Federal Reserve
Bank in accordance with Regulation A of the FRB or U.S. Treasury Regulation 31
C.F.R. ss.203.14, and such Federal Reserve Bank may enforce such pledge or
security interest in any manner permitted under applicable law.
11.09 CONFIDENTIALITY. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by Holdings or the Company and provided to it by Holdings, the Company
or any Subsidiary, or by the Agent on Holdings', the Company's or such
Subsidiary's behalf, under this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information other than
in connection with or in enforcement of this Agreement and the other Loan
Documents or in connection with other business now or hereafter existing or
contemplated with Holdings, the Company or any Subsidiary; except to the extent
such information (i) was or becomes generally available to the public other than
as a result of disclosure by such Bank, or (ii) was or becomes available on a
non-confidential basis from a source other than Holdings or the Company,
PROVIDED that such source is not bound by a confidentiality agreement with
Holdings or the Company known to such Bank; PROVIDED, HOWEVER, that any Bank may
disclose such information (A) at the request or pursuant to any requirement of
any Governmental Authority to which such Bank is subject or in connection with
an examination of such Bank by any such authority; (B) pursuant to subpoena or
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other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent, any
Bank or their respective Affiliates may be party; (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document; (F) to such Bank's independent auditors, legal counsel and
other professional advisors; (G) to any Participant or Assignee, actual or
potential, PROVIDED that such Person agrees in writing to keep such information
confidential to the same extent required of the Banks hereunder; (H) as to any
Bank or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which Holdings, the Company
or any Subsidiary is party or is deemed party with such Bank or such Affiliate;
and (I) to its Affiliates.
11.10 SET-OFF. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, without
prior notice to any Loan Party, any such notice being waived by such Loan Party
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing by, such Bank to or for the
credit or the account of such Loan Party against any and all Obligations owing
to such Bank, now or hereafter existing, irrespective of whether or not the
Agent or such Bank shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each Bank
agrees promptly to notify such Loan Party and the Agent after any such set-off
and application made by such Bank; PROVIDED, HOWEVER, that the failure to give
such notice shall not affect the validity of such set-off and application.
NOTWITHSTANDING THE FOREGOING, NO BANK SHALL EXERCISE, OR ATTEMPT TO EXERCISE,
ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR THE LIKE, AGAINST ANY DEPOSIT ACCOUNT OR
PROPERTY OF HOLDINGS OR ANY SUBSIDIARY OF HOLDINGS HELD OR MAINTAINED BY THE
BANK WITHOUT THE PRIOR WRITTEN CONSENT OF THE MAJORITY BANKS.
11.11 [INTENTIONALLY OMITTED.]
11.12 GUARANTY. (a) GUARANTY. Each of the Guarantors unconditionally
and irrevocably, jointly and severally guarantees to the Agent, the Lead
Arranger and the Banks, and their respective successors, endorsers, transferees
and assigns (the "GUARANTEED PERSONS"), the full and prompt payment when due
(whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise) and performance of all indebtedness, liabilities and other
obligations of Holdings to any Guaranteed Person, whether arising out of or in
connection with this Agreement, any other Loan Document or otherwise, including
all unpaid principal of the Loans, all L/C Obligations, all interest accrued
thereon, all fees due under this Agreement and all other amounts payable by
Holdings to any Guaranteed Person thereunder or in connection therewith. The
terms "indebtedness," "liabilities" and "obligations" are used herein in their
most comprehensive sense and include any and all advances, debts, obligations
and liabilities, now existing or hereafter arising, whether voluntary or
involuntary and whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, and whether recovery upon such
indebtedness, liabilities and obligations may be or hereafter become
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unenforceable or shall be an allowed or disallowed claim under the Bankruptcy
Code or other applicable law. The foregoing indebtedness, liabilities and other
obligations of Holdings shall hereinafter be collectively referred to as the
"GUARANTEED OBLIGATIONS." The Guaranteed Obligations include interest which, but
for an Insolvency Proceeding, would have accrued on such Guaranteed Obligations,
whether or not a claim is allowed against Holdings for such interest in any such
Insolvency Proceeding.
(b) SEPARATE OBLIGATION. Each Guarantor acknowledges and
agrees (i) that the Guaranteed Obligations are separate and distinct from any
indebtedness, obligations or liabilities arising under or in connection with any
other agreement, instrument or guaranty, including under any provision of this
Agreement other than this Section 11.12, executed at any time by such Guarantor
in favor of any Guaranteed Person, and (ii) such Guarantor shall pay and perform
all of the Guaranteed Obligations as required under this Section 11.12, and each
Guaranteed Person may enforce any and all of its rights and remedies hereunder,
without regard to any other agreement, instrument or guaranty, including any
provision of this Agreement other than this Section 11.12, at any time executed
by such Guarantor in favor of any Guaranteed Person, regardless of whether or
not any such other agreement, instrument or guaranty, or any provision thereof
or hereof, shall for any reason become unenforceable or any of the indebtedness,
obligations or liabilities thereunder shall have been discharged, whether by
performance, avoidance or otherwise. Each Guarantor acknowledges that in
providing benefits to Holdings and such Guarantor, the Guaranteed Persons are
relying upon the enforceability of this Section 11.12 and the Guaranteed
Obligations as separate and distinct indebtedness, obligations and liabilities
of such Guarantor, and each Guarantor agrees that each Guaranteed Person would
be denied the full benefit of their bargain if at any time this Section 11.12 or
the Guaranteed Obligations were treated any differently. The fact that the
Guaranty of each Guarantor is set forth in this Agreement rather than in a
separate guaranty document is for the convenience of Holdings and the Guarantors
and shall in no way impair or adversely affect the rights or benefits of any
Guaranteed Person under this Section 11.12. Each Guarantor agrees to execute and
deliver a separate agreement, immediately upon request at any time of any
Guaranteed Person, evidencing such Guarantor's obligations under this Section
11.12. Upon the occurrence of any Event of Default, a separate action or actions
may be brought against each Guarantor, whether or not Holdings or any other
Guarantor or Person is joined therein or a separate action or actions are
brought against Holdings or any other Guarantor or Person.
(c) LIMITATION OF GUARANTY. To the extent that any court of
competent jurisdiction shall impose by final judgment under applicable law
(including the California Uniform Fraudulent Transfer Act and ss.ss.544 and 548
of the Bankruptcy Code) any limitations on the amount of any Guarantor's
liability with respect to the Guaranteed Obligations which any Guaranteed Person
can enforce under this Section 11.12, each Guaranteed Person by its acceptance
hereof accepts such limitation on the amount of such Guarantor's liability
hereunder to the extent needed to make this Section 11.12 fully enforceable and
nonavoidable.
(d) LIABILITY OF GUARANTOR. The liability of each Guarantor
under this Section 11.12 shall be irrevocable, absolute, independent and
unconditional, and shall not be affected by any circumstance which might
constitute a discharge of a surety or guarantor other than the indefeasible
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payment and performance in full of all Guaranteed Obligations. In furtherance of
the foregoing and without limiting the generality thereof, each Guarantor agrees
as follows:
(i) such Guarantor's liability hereunder shall be the
immediate, direct, and primary obligation of such Guarantor and shall not be
contingent upon any Guaranteed Person's exercise or enforcement of any remedy it
may have against Holdings or any other Person, or against any collateral or
other security for any Guaranteed Obligations;
(ii) this Guaranty is a guaranty of payment when due and not
merely of collectibility;
(iii) such Guarantor's payment of a portion, but not all, of
the Guaranteed Obligations shall in no way limit, affect, modify or abridge such
Guarantor's liability for any portion of the Guaranteed Obligations remaining
unsatisfied; and
(iv) such Guarantor's liability with respect to the
Guaranteed Obligations shall remain in full force and effect without regard to,
and shall not be impaired or affected by, nor shall such Guarantor be exonerated
or discharged by, any of the following events:
(A) any Insolvency Proceeding;
(B) any limitation, discharge, or cessation of the
liability of Holdings or any other guarantor or Person for any Guaranteed
Obligations due to any statute, regulation or rule of law, or any invalidity or
unenforceability in whole or in part of any of the Guaranteed Obligations or the
Loan Documents;
(C) any merger, acquisition, consolidation or change in
structure of Holdings or any other Guarantor or Person, or any sale, lease,
transfer or other disposition of any or all of the assets or shares of Holdings
or any other Guarantor or other Person;
(D) any assignment or other transfer, in whole or in
part, of any Guaranteed Person's interests in and rights under this Guaranty or
the other Loan Documents;
(E) any claim, defense, counterclaim or set-off, other
than that of prior performance, that Holdings, such Guarantor, any other
guarantor or other Person may have or assert, including any defense of
incapacity or lack of corporate or other authority to execute any of the Loan
Documents;
(F) any Guaranteed Person's amendment, modification,
renewal, extension, cancellation or surrender of any Loan Document or any
Guaranteed Obligations;
(G) any Guaranteed Person's exercise or nonexercise of
any power, right or remedy with respect to any Guaranteed Obligations or any
collateral;
(H) any Guaranteed Person's vote, claim, distribution,
election, acceptance, action or inaction in any Insolvency Proceeding; or
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(I) any other guaranty, whether by any Guarantor or any
other Person, of all or any part of the Guaranteed Obligations or any other
indebtedness, obligations or liabilities of any Guaranteed Person.
(e) CONSENTS OF GUARANTOR. Each Guarantor hereby
unconditionally consents and agrees that, without notice to or further assent
from such Guarantor:
(i) the principal amount of the Guaranteed Obligations may
be increased or decreased and additional indebtedness or obligations of Holdings
under the Loan Documents may be incurred and the time, manner, place or terms of
any payment under any Loan Document be extended or changed, by one or more
amendments, modifications, renewals or extensions of any Loan Document or
otherwise;
(ii) the time for Holdings' (or any other Person's)
performance of or compliance with any term, covenant or agreement on its part to
be performed or observed under any Loan Document may be extended, or such
performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such terms
as any Guaranteed Person (or the Majority Banks, as the case may be) may deem
proper;
(iii) each Guaranteed Person may request and accept other
guarantees and may take and hold other security as collateral for the Guaranteed
Obligations, and may, from time to time, in whole or in part, exchange, sell,
surrender, release, subordinate, modify, waive, rescind, compromise or extend
such other guaranties or security and may permit or consent to any such action
or the result of any such action, and may apply such security and direct the
order or manner of sale thereof;
(iv) each Guaranteed Person may exercise, or waive or
otherwise refrain from exercising, any other right, remedy, power or privilege
even if the exercise thereof affects or eliminates any right of subrogation or
any other right of such Guarantor against Holdings.
(f) GUARANTOR'S WAIVERS. Each Guarantor waives and agrees not
to assert:
(i) any right to require the Agent, the Issuing Bank or any
Bank to marshal assets in favor of Holdings, the Guarantors, any other guarantor
or any other Person, to proceed against Holdings, any other guarantor or any
other Person, to proceed against or exhaust any of the Collateral, to give
notice of the terms, time and place of any public or private sale of personal
property security constituting the Collateral or other collateral for the
Guaranteed Obligations or comply with any other provisions of ss.9504 of the UCC
(or any equivalent provision of any other applicable law) or to pursue any other
right, remedy, power or privilege of the Agent, the Issuing Bank or any Bank
whatsoever;
(ii) the defense of the statute of limitations in any action
hereunder or for the collection or performance of the Guaranteed Obligations;
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(iii) any defense arising by reason of any lack of corporate
or other authority or any other defense of Holdings, such Guarantor or any other
Person;
(iv) any defense based upon any Guaranteed Person's errors or
omissions in the administration of the Guaranteed Obligations;
(v) any rights to set-offs and counterclaims;
(vi) without limiting the generality of the foregoing, to the
fullest extent permitted by law, any defenses or benefits that may be derived
from or afforded by applicable law limiting the liability of or exonerating
guarantors or sureties, or which may conflict with the terms of this Section
11.12;
(vii) any defense based upon an election of remedies
(including, if available, an election to proceed by nonjudicial foreclosure)
which destroys or impairs the subrogation rights of such Guarantor or the right
of such Guarantor to proceed against Holdings or any other obligor of the
Guaranteed Obligations for reimbursement;
(viii) without limiting the generality of the foregoing, to the
fullest extent permitted by law, any defenses or benefits that may be derived
from or afforded by applicable law limiting the liability of or exonerating
guarantors or sureties, or which may conflict with the terms of this Section
11.12, including any and all benefits that otherwise might be available to such
Guarantor under California Civil Code ss.ss.1432, 2809, 2810, 2815, 2819, 2839,
2845, 2848, 2849, 2850, 2899 and 3433 and California Code of Civil Procedure
ss.ss.580a, 580b, 580d and 726. Accordingly, each Guarantor waives all rights
and defenses that such Guarantor may have because Holdings' debt is secured by
real property. This means, among other things: (A) the Agent , the Issuing Bank
and the Banks may collect from such Guarantor without first foreclosing on any
real or personal property Collateral pledged by Holdings; and (B) if the Agent
forecloses on any real property Collateral pledged by Holdings: (1) the amount
of the debt may be reduced only by the price for which that Collateral is sold
at the foreclosure sale, even if the Collateral is worth more than the sale
price, and (2) the Agent, the Issuing Bank and the Banks may collect from such
Guarantor even if the Agent, by foreclosing on the real property Collateral, has
destroyed any right such Guarantor may have to collect from Holdings. This is an
unconditional and irrevocable waiver of any rights and defenses such Guarantor
may have because Holdings' debt is secured by real property. These rights and
defenses include, but are not limited to, any rights of defenses based upon
Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure; and
(ix) any and all notice of the acceptance of this Guaranty,
and any and all notice of the creation, renewal, modification, extension or
accrual of the Guaranteed Obligations, or the reliance by any Guaranteed Person
upon this Guaranty, or the exercise of any right, power or privilege hereunder.
The Guaranteed Obligations shall conclusively be deemed to have been created,
contracted, incurred and permitted to exist in reliance upon this Guaranty. Each
Guarantor waives promptness, diligence, presentment, protest, demand for
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payment, notice of default, dishonor or nonpayment and all other notices to or
upon Holdings, such Guarantor or any other Person with respect to the Guaranteed
Obligations.
(g) FINANCIAL CONDITION OF HOLDINGS. No Guarantor shall have
any right to require any Guaranteed Person to obtain or disclose any information
with respect to: the financial condition or character of Holdings or the ability
of Holdings to pay and perform the Guaranteed Obligations; the Guaranteed
Obligations; any collateral or other security for any or all of the Guaranteed
Obligations; the existence or nonexistence of any other guarantees of all or any
part of the Guaranteed Obligations; any action or inaction on the part of any
Guaranteed Person or any other Person; or any other matter, fact or occurrence
whatsoever. Each Guarantor hereby acknowledges that it has undertaken its own
independent investigation of the financial condition of Holdings and the other
Loan Parties and all other matters pertaining to this Guaranty and further
acknowledges that it is not relying in any manner upon any representation or
statement of any Guaranteed Person with respect thereto.
(h) SUBROGATION. Until the Guaranteed Obligations shall be
satisfied in full and the Commitments shall be terminated, each Guarantor shall
not have, and shall not directly or indirectly exercise (i) any rights that it
may acquire by way of subrogation under this Section 11.12, by any payment
hereunder or otherwise, (ii) any rights of contribution, indemnification,
reimbursement or similar suretyship claims arising out of this Section 11.12 or
(iii) any other right which it might otherwise have or acquire (in any way
whatsoever) which could entitle it at any time to share or participate in any
right, remedy or security of any Guaranteed Person as against Holdings or other
guarantors, whether in connection with this Section 11.12, any of the other Loan
Documents or otherwise. If any amount shall be paid to any Guarantor on account
of the foregoing rights at any time when all the Guaranteed Obligations shall
not have been paid in full, such amount shall be held in trust for the benefit
of each Guaranteed Person and shall forthwith be paid to the Agent to be
credited and applied to the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Loan Documents.
(i) CONTINUING GUARANTY. This Guaranty is a continuing
guaranty and agreement of subordination and shall continue in effect and be
binding upon each Guarantor until termination of the Commitments and payment and
performance in full of all Guaranteed Obligations, including Guaranteed
Obligations which may exist continuously or which may arise from time to time
under successive transactions, and each Guarantor expressly acknowledges that
this Guaranty shall remain in full force and effect notwithstanding that there
may be periods in which no Guaranteed Obligations exist.
(j) REINSTATEMENT. This Guaranty shall continue to be
effective or shall be reinstated and revived, as the case may be, if, for any
reason, any payment of the Guaranteed Obligations by or on behalf of Holdings
(or receipt of any proceeds of collateral) shall be rescinded, invalidated,
declared to be fraudulent or preferential, set aside, voided or otherwise
required to be repaid to Holdings, its estate, trustee, receiver or any other
Person (including under the Bankruptcy Code or other state or federal law), or
must otherwise be restored by any Guaranteed Person, whether as a result of
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Insolvency Proceedings or otherwise. All losses, damages, costs and expenses
that any Guaranteed Person may suffer or incur as a result of any voided or
otherwise set aside payments shall be specifically covered by the indemnity in
favor of the Banks and the Agent contained in Section 11.05.
(k) SUBSTANTIAL BENEFITS. The funds that have been borrowed
from the Banks by Holdings have been and are to be contemporaneously used for
the direct or indirect benefit of Holdings and each Guarantor. It is the
position, intent and expectation of the parties that Holdings and each Guarantor
have derived and will derive significant and substantial direct or indirect
benefits from the accommodations that have been made by the Banks under the Loan
Documents.
(l) KNOWING AND EXPLICIT WAIVERS. EACH GUARANTOR ACKNOWLEDGES
THAT IT EITHER HAS OBTAINED THE ADVICE OF LEGAL COUNSEL OR HAS HAD THE
OPPORTUNITY TO OBTAIN SUCH ADVICE IN CONNECTION WITH THE TERMS AND PROVISIONS OF
THIS SECTION 11.12. EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT EACH OF THE
WAIVERS AND CONSENTS SET FORTH HEREIN ARE MADE WITH FULL KNOWLEDGE OF THEIR
SIGNIFICANCE AND CONSEQUENCES, AND THAT ALL SUCH WAIVERS AND CONSENTS HEREIN ARE
EXPLICIT AND KNOWING AND WHICH EACH GUARANTOR EXPECTS TO BE FULLY ENFORCEABLE.
(m) RELEASE OF SUBSIDIARY GUARANTORS. Holdings may at any time
deliver to the Agent a certificate from a Responsible Officer of Holdings
certifying as of the date of the certificate that, after the consummation of the
transaction or series of transactions described in such certificate (which
certification shall also state that such transactions, individually or in the
aggregate, will be in compliance with the terms and conditions of this
Agreement, including to the extent applicable Sections 8.02 and 8.03, and that
no Event of Default existed, exists or will exist, as the case may be,
immediately before, as a result of or immediately after giving effect to such
transaction or transactions and termination), the Guarantor identified in such
certification will no longer be a Subsidiary of Holdings. Effective upon the
consummation of the transaction or series of transactions described in such
certificate, the Subsidiary identified in such certification shall thereupon
automatically cease to be a Guarantor hereunder and shall cease to be a party
hereto and shall thereupon automatically be released from its obligations under
this Section 11.12 and under the Security Agreement, and all Liens in favor of
the Agent and the Banks under the Collateral Documents in respect of the
property of such Subsidiary shall thereupon terminate. Holdings shall promptly
notify the Agent of the consummation of any such transaction or series of
transactions. The Agent, on behalf of the Banks, shall, at Holdings' expense,
execute and deliver such instruments as Holdings may reasonably request to
evidence such release and Lien termination.
11.13 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Bank
shall notify the Agent in writing of any changes in the address to which notices
to such Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
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11.14 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
11.15 SEVERABILITY. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
11.16 NO THIRD PARTIES BENEFITED. This Agreement is made and entered
into for the sole protection and legal benefit of Holdings, the Company, the
Banks, the Agent and the Agent-Related Persons, the Indemnified Persons and
their permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
11.17 GOVERNING LAW AND JURISDICTION. (a) THIS AGREEMENT AND ANY
NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF CALIFORNIA; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF CALIFORNIA OR OF THE UNITED STATES SITTING IN THE STATE OF CALIFORNIA, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE LOAN PARTIES, THE AGENT
AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE LOAN PARTIES, THE AGENT
AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
LOAN PARTIES, THE AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY CALIFORNIA LAW.
(c) Nothing contained in this Section shall override any
contrary provision contained in any Specified Swap Contract.
11.18 WAIVER OF JURY TRIAL. THE LOAN PARTIES, THE BANKS AND THE
AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
103
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE LOAN
PARTIES, THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
11.19 ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Loan
Parties, the Issuing Bank, the Swingline Bank, the Banks and the Agent, and
supersedes all prior or contemporaneous agreements and understandings of such
Persons, verbal or written, relating to the subject matter hereof and thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in San Francisco, California, by their proper and
duly authorized officers as of the day and year first above written.
BUILDING MATERIALS HOLDING CORPORATION
By: /s/ XXXXX X. XXXXXX
-------------------
Title: Senior Vice President-Finance
& Treasurer
BMC WEST CORPORATION
By: /s/ XXXXX X. XXXXXX
-------------------
Title: Senior Vice President-Finance
& Treasurer
BMC WEST CORPORATION SOUTHCENTRAL
By: /s/ XXXXX X. XXXXXX
-------------------
Title: Senior Vice President-Finance
& Treasurer
BMCW SOUTHCENTRAL, L.P.
By: BMC WEST CORPORATION
SOUTHCENTRAL, its General Partner
By: /s/ XXXXX X. XXXXXX
-------------------
Title: Senior Vice President-Finance
& Treasurer
105
BMCW, LLC
By: /s/ XXXXX X. XXXXXX
-------------------
Title: Senior Vice President-Finance
& Treasurer
BMHC FRAMING, INC.
By: /s/ XXXXX X. XXXXXX
-------------------
Title: Senior Vice President-Finance
& Treasurer
BANK OF AMERICA, N.A.,
as Agent, Issuing Bank, Swingline Bank
and a Bank
By: /s/ XXXXX LEADER
----------------
Title: Managing Director
COMERICA BANK
By: /s/ SIGNED
------------------
Title: Account Officer
FIRST SECURITY BANK, N.A.
By: /s/ XXXXX XXXX
------------------
Title: Vice President
106
FIRST UNION NATIONAL BANK
By: /s/ XXXXX X. XXXXXXX
--------------------
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ XXXX X. XXXXX
-----------------
Title: Assistant Vice President
SOUTH TRUST BANK, N.A.
By: /s/ XXXXX X. XXXXXX
-------------------
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ XXXXX X. XXXXXXX
--------------------
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ XXXXX X. XXXXXX
-------------------
Title: Vice President
107
XXXXX FARGO BANK, N.A.
By: /s/ XXXXX XXXXXX
-----------------
Title: Vice President
WM BUSINESS BANK A DIVISION OF
WASHINGTON MUTUAL
By: /s/ S. C. XXXXXXXXXX
--------------------
Title: Vice President
108
