CONFORMED COPY
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CREDIT AGREEMENT
dated as of June 23, 1997,
among
ROLLER BEARING COMPANY OF AMERICA, INC.,
THE LENDERS NAMED HEREIN
and
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms.............................................. 1
SECTION 1.02. Terms Generally............................................ 20
ARTICLE II
The Credits
SECTION 2.01. Commitments................................................ 20
SECTION 2.02. Loans...................................................... 21
SECTION 2.03. Borrowing Procedure........................................ 22
SECTION 2.04. Evidence of Debt; Repayment of Loans....................... 23
SECTION 2.05. Fees....................................................... 23
SECTION 2.06. Interest on Loans.......................................... 24
SECTION 2.07. Default Interest........................................... 25
SECTION 2.08. Alternate Rate of Interest................................. 25
SECTION 2.09. Termination and Reduction of Commitments................... 25
SECTION 2.10. Conversion and Continuation of Borrowings.................. 26
SECTION 2.11. Repayment of Term Borrowings............................... 27
SECTION 2.12. Prepayment................................................. 28
SECTION 2.13. Mandatory Prepayments...................................... 28
SECTION 2.14. Reserve Requirements; Change in Circumstances.............. 30
SECTION 2.15. Change in Legality......................................... 31
SECTION 2.16. Indemnity.................................................. 32
SECTION 2.17. Pro Rata Treatment......................................... 32
SECTION 2.18. Sharing of Setoffs......................................... 32
SECTION 2.19. Payments................................................... 33
SECTION 2.20. Taxes...................................................... 33
SECTION 2.21. Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate.......................... 36
SECTION 2.22. Letters of Credit.......................................... 37
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers....................................... 41
SECTION 3.02. Authorization.............................................. 41
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SECTION 3.03. Enforceability............................................. 41
SECTION 3.04. Governmental Approvals..................................... 42
SECTION 3.05. Financial Statements....................................... 42
SECTION 3.06. No Material Adverse Change................................. 42
SECTION 3.07. Title to Properties; Possession Under Leases............... 42
SECTION 3.08. Subsidiaries............................................... 43
SECTION 3.09. Litigation; Compliance with Laws........................... 43
SECTION 3.10. Agreements................................................. 43
SECTION 3.11. Federal Reserve Regulations................................ 44
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act.............................................. 44
SECTION 3.13. Use of Proceeds............................................ 44
SECTION 3.14. Tax Returns................................................ 44
SECTION 3.15. No Material Misstatements.................................. 44
SECTION 3.16. Employee Benefit Plans..................................... 44
SECTION 3.17. Environmental Matters...................................... 45
SECTION 3.18. Insurance.................................................. 45
SECTION 3.19. Security Documents......................................... 45
SECTION 3.20. Location of Real Property and Leased Premises.............. 46
SECTION 3.21. Labor Matters.............................................. 46
SECTION 3.22. Solvency................................................... 47
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events.......................................... 47
SECTION 4.02. First Credit Event......................................... 48
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties....................... 52
SECTION 5.02. Insurance.................................................. 52
SECTION 5.03. Obligations and Taxes...................................... 53
SECTION 5.04. Financial Statements, Reports, etc. ....................... 54
SECTION 5.05. Litigation and Other Notices............................... 55
SECTION 5.06. Employee Benefits.......................................... 55
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections.............................................. 55
SECTION 5.08. Use of Proceeds............................................ 56
SECTION 5.09. Compliance with Environmental Laws......................... 56
SECTION 5.10. Preparation of Environmental Reports....................... 56
SECTION 5.11. Further Assurances......................................... 56
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ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness............................................... 57
SECTION 6.02. Liens...................................................... 59
SECTION 6.03. Sale and Lease-Back Transactions........................... 60
SECTION 6.04. Investments, Loans and Advances............................ 61
SECTION 6.05. Mergers, Consolidations, Sales of Assets
and Acquisitions......................................... 61
SECTION 6.06. Dividends and Distributions; Restriction on
Ability of Subsidiaries to Pay Dividends................. 62
SECTION 6.07. Transactions with Affiliates............................... 63
SECTION 6.08. Management and Other Fees.................................. 63
SECTION 6.09. Business of Borrower and Subsidiaries...................... 63
SECTION 6.10. Other Indebtedness and Agreements.......................... 63
SECTION 6.11. Capital Expenditures....................................... 64
SECTION 6.12. Consolidated Leverage Ratio................................ 64
SECTION 6.13. Consolidated Interest Coverage Ratio....................... 64
SECTION 6.14. Consolidated Fixed Charge Coverage Ratio................... 65
SECTION 6.15. Fiscal Year................................................ 66
ARTICLE VII
Events of Default 66
ARTICLE VIII
The Administrative Agent and the Collateral Agent 69
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices.................................................... 71
SECTION 9.02. Survival of Agreement...................................... 71
SECTION 9.03. Binding Effect............................................. 72
SECTION 9.04. Successors and Assigns..................................... 72
SECTION 9.05. Expenses; Indemnity........................................ 75
SECTION 9.06. Right of Setoff............................................ 76
SECTION 9.07. Applicable Law............................................. 76
SECTION 9.08. Waivers; Amendment......................................... 76
SECTION 9.09. Interest Rate Limitation................................... 77
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SECTION 9.10. Entire Agreement........................................... 77
SECTION 9.11. WAIVER OF JURY TRIAL....................................... 77
SECTION 9.12. Severability............................................... 78
SECTION 9.13. Counterparts............................................... 78
SECTION 9.14. Headings................................................... 78
SECTION 9.15. Jurisdiction; Consent to Service of Process................ 78
SECTION 9.16. Confidentiality............................................ 79
SCHEDULES
Schedule 1.01(a) Continuing Investors
Schedule 1.01(b) Guarantors
Schedule 1.01(c) Existing Letters of Credit
Schedule 1.01(d) Mortgaged Properties
Schedule 2.01 Lenders; Commitments
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.16 ERISA Events
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 3.19(d) Mortgage Filing Offices
Schedule 3.20(a) Real Property Owned
Schedule 3.20(b) Real Property Leased
Schedule 4.02(a) Local Counsel
Schedule 6.01 Existing Indebtedness
Schedule 6.02 Existing Liens
Schedule 6.07 Transactions with Affiliates
Schedule 6.08 Management Fees
EXHIBITS
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Guarantee Agreement
Exhibit E Form of Indemnity, Subrogation and Contribution Agreement
Exhibit F Form of Mortgage
Exhibit G Form of Pledge Agreement
Exhibit H Form of Security Agreement
Exhibit I Form of Tax Sharing Agreement
Exhibit J-1 Form of Opinion of XxXxxxxxx, Will & Xxxxx
Exhibit J-2 Form of Local Counsel Opinion
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CREDIT AGREEMENT dated as of June 23, 1997, among
ROLLER BEARING COMPANY OF AMERICA, INC., a Delaware
corporation (the "Borrower"), the Lenders (as defined in
Article I), the Issuing Banks (as defined in Article I)
and CREDIT SUISSE FIRST BOSTON, a bank organized under
the laws of Switzerland, acting through its New York
branch ("CSFB"), as administrative agent (in such
capacity, the "Administrative Agent"), and as collateral
agent (in such capacity, the "Collateral Agent") for the
Lenders.
Pursuant to the Recapitalization Agreement (such term and each other
capitalized term used but not defined herein having the meaning given it in
Article I), the Continuing Investors intend to recapitalize Holdings (the
"Recapitalization") in a transaction in which (a) all the outstanding preferred
stock of Holdings and (b) all the outstanding common stock and warrants of
Holdings owned by shareholders of Holdings (the "Outside Shareholders") other
than the Continuing Investors will be redeemed or repurchased.
The Borrower has requested the Lenders to extend credit in the form of (a)
Term Loans on the Closing Date, in an aggregate principal amount not in excess
of $16,000,000, and (b) Revolving Loans at any time and from time to time prior
to the Maturity Date, in an aggregate principal amount at any time outstanding
not in excess of $54,000,000. The Borrower has requested the Issuing Banks to
issue letters of credit, in an aggregate face amount at any time outstanding not
in excess of $16,000,000 to support payment obligations incurred in the ordinary
course of business by the Borrower and its Subsidiaries. The proceeds of the
Term Loans, together with the proceeds of the Senior Subordinated Notes, the
Discount Debentures and Revolving Loans to be received by the Borrower on the
Closing Date, are to be used solely (a) to finance the Recapitalization, (b) to
repay existing Indebtedness of the Borrower, and (c) to pay related fees, costs
and expenses in connection with the Transactions. The proceeds of the Revolving
Loans (other than those used as described in the immediately preceding sentence)
are to be used solely for general corporate purposes in the ordinary course of
the Borrower's business (including Permitted Acquisitions).
The Lenders are willing to extend such credit to the Borrower and the
Issuing Banks are willing to issue letters of credit for the account of the
Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan " shall mean any ABR Term Loan or ABR Revolving Loan.
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"ABR Revolving Loan" shall mean any Revolving Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ABR Term Borrowing" shall mean a Borrowing comprised of ABR Term Loans.
"ABR Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum equal to the product of (a)
the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.
"Administrative Agent Fees" shall have the meaning assigned to such term
in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative Questionnaire
in the form of Exhibit A.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified and, for purposes of Section 6.07 only, shall include another person
who Controls 10% or more (on a fully diluted basis) of the voting securities of
the person specified.
"Aggregate Revolving Credit Exposure" shall mean the aggregate amount of
the Lenders' Revolving Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. If for any reason the Administrative Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Base CD Rate or the Federal Funds Effective
Rate or both for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the Alternate Base Rate shall be determined
without regard to clause (b) or (c), or both, of the preceding sentence, as
appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the Base CD Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate, the Base CD Rate or the Federal
Funds Effective Rate, respectively. The term "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by the Administrative
Agent as its prime rate in effect at its principal office in New York City; each
change in the Prime Rate shall be effective on the date such change is publicly
announced as being effective. The term "Base CD Rate" shall mean the sum of (a)
the product of (i) the Three-Month Secondary CD Rate and (ii) Statutory Reserves
and (b) the Assessment Rate. The term "Federal Funds Effective Rate" shall mean,
for any day, the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business
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Day, the average of the quotations for the day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Applicable Percentage" of any Revolving Credit Lender at any time shall
mean the percentage of the Total Revolving Credit Commitment represented by such
Lender's Revolving Credit Commitment. In the event the Revolving Credit
Commitments shall have expired or been terminated, the Applicable Percentages
shall be determined on the basis of the Revolving Credit Commitments most
recently in effect.
"Assessment Rate" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor thereto) for insurance
by such Corporation (or such successor) of time deposits made in dollars at the
Administrative Agent's domestic offices.
"Asset Sale" shall mean the sale, transfer or other disposition (by way of
merger or otherwise (other than a merger of the type contemplated by Section
6.05(a)(ii)(c)) and including by way of a Sale and Leaseback) by the Borrower or
any Subsidiary to any person other than the Borrower or any Guarantor of (a) any
capital stock of any Subsidiary (other than directors' qualifying shares) or (b)
any other assets of the Borrower or any Subsidiary (other than inventory,
excess, damaged, obsolete or worn out assets, scrap and Permitted Investments,
in each case disposed of in the ordinary course of business); provided that any
asset sale or series of related asset sales described in clause (b) above having
a value not in excess of $250,000 shall be deemed not to be an "Asset Sale" for
purposes of this Agreement.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States of America.
"Bond Documents" shall mean (a) the Loan Agreement dated as of September
1, 1994, between South Carolina Jobs-Economic Development Authority (the
"Authority") and the Borrower relating to $7,700,000 Variable Rate Demand
Industrial Development Revenue Bonds (Roller Bearing Company of America, Inc.
Project) Series 1994A, (b) the Trust Indenture dated as of September 1, 1994, by
and between the Authority and Xxxx Xxxxx Bank, as trustee, with respect to the
bonds described in clause (a) of this definition, (c) the Loan Agreement dated
as of September 1, 1994, between the Authority and the Borrower relating to
$3,000,000 Variable Rate Demand Industrial Development Revenue Bonds (Roller
Bearing Company of America, Inc. Project) Series 1994B, and (d) the Trust
Indenture dated as of September 1, 1994, by and between the Authority and Xxxx
Xxxxx Bank, as trustee, with respect to the bonds described in clause (c) of
this definition and, in each case, the other documents executed in connection
therewith.
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"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in effect.
"Borrowing Request" shall mean a request by the Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit C.
"Business Day" shall mean any day other than a Saturday, Sunday or day on
which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capital Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
A "Change in Control" shall be deemed to have occurred if (a) Xxxxxxx X.
Xxxxxxxx and his Permitted Transferees shall cease to own directly or
indirectly, beneficially or of record, shares representing at least 66-2/3% of
the capital stock (on a fully diluted basis) of Holdings owned by him on the
Closing Date; (b) any person or group (within the meaning of Rule 13d-5 of the
Securities Exchange Act of 1934 as in effect on the date hereof) other than the
Continuing Investors shall own directly or indirectly, beneficially or of
record, shares representing more than 25% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of Holdings; (c) a
majority of the seats (other than vacant seats) on the board of directors of
Holdings shall at any time be occupied by persons who were neither (i) nominated
by the Continuing Investors, or by the board of directors of Holdings, nor (ii)
appointed by directors so nominated; (d) any change in control (or similar
event, however denominated) with respect to Holdings, the Borrower or any
Subsidiary shall occur under and as defined in any indenture or agreement to
which Holdings, the Borrower or any Subsidiary is a party in respect of
Indebtedness in an aggregate principal amount in excess of $1,000,000; or (e)
Holdings shall cease to own, beneficially and of record, 100% of the issued and
outstanding capital stock of the Borrower.
"Closing Date" shall mean the date of the first Credit Event.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" shall mean all the "Collateral" as defined in any Security
Document and shall also include the Mortgaged Properties.
"Commitment" shall mean, with respect to any Lender, such Lender's
Revolving Credit Commitment and Term Loan Commitment.
"Commitment Fee" shall have the meaning assigned to such term in Section
2.05(a).
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"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrower dated May 1997.
"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability) by the Borrower or any of the Subsidiaries during such
period that, in accordance with GAAP, are or should be included in "additions to
property, plant and equipment" or similar items reflected in the consolidated
statement of cash flows of the Borrower and the Subsidiaries for such period
(including the amount of assets leased in connection with any Capital Lease
Obligation), provided that the following shall not constitute Consolidated
Capital Expenditures: (a) expenditures for Permitted Acquisitions and (b)
expenditures made pursuant to the proviso following clause (a)(iv) of the
definition of the term "Net Cash Proceeds".
"Consolidated Current Assets" shall mean, as of any date of determination,
the total assets that would properly be classified as current assets (other than
cash and cash equivalents) of the Borrower and the Subsidiaries as of such date,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Current Liabilities" shall mean, as of any date of
determination, the total liabilities (other than, without duplication, (a) the
current portion of long-term Indebtedness and (b) outstanding Revolving Loans)
that would properly be classified as current liabilities of the Borrower and the
Subsidiaries as of such date, determined on a consolidated basis in accordance
with GAAP.
"Consolidated EBITDA" shall mean, for any period, the sum of (a)
Consolidated Net Income for such period, (b) any provision for (or less any
benefit from) income and franchise taxes included in the determination of such
Consolidated Net Income; (c) Consolidated Interest Expense for such period; (d)
amortization and depreciation deducted in determining such Consolidated Net
Income; and (e) expenses of the Transactions included in the determination of
such Consolidated Net Income, provided that such expenses were included in the
pro forma consolidated financial statements described in Section 3.05(b), or
disclosed in the notes thereto or in writing from the Borrower to the
Administrative Agent prior to the Closing Date.
"Consolidated Fixed Charge Coverage Ratio" shall mean for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) the sum of (i)
Consolidated Interest Expense for such period; (ii) any provision for (or less
any benefit from) income or franchise taxes paid in cash during such period and
included in the determination of Consolidated Net Income; (iii) scheduled
payments of principal with respect to all Indebtedness (including the principal
portion of scheduled payments of Capital Lease Obligations) of the Borrower and
its Subsidiaries on a consolidated basis during such period (other than
repayments of Indebtedness pursuant to the Existing Credit Agreement on or prior
to the Closing Date); (iv) payments permitted pursuant to Section 6.06 (other
than Section 6.06(a)(iv)) made in cash during such period; and (v) Consolidated
Capital Expenditures made during such period, to the extent not financed
pursuant to Section 6.01(f).
"Consolidated Interest Coverage Ratio" shall mean shall mean, for any
period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
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"Consolidated Interest Expense" of the Borrower and its Subsidiaries shall
mean, for any period, (a) interest expense of the Borrower and its Subsidiaries
for such period, net of interest income, included in the determination of
Consolidated Net Income, less (b) (i) amortization of capitalized fees and
expenses incurred with respect to the Transactions and, without duplication, the
Related Transactions (as defined in the Existing Credit Agreement) included in
interest expense for such period, (ii) amortization of any original discount
attributable to any warrants included in interest expense for such period and
(iii) interest paid in kind and included in interest expense for such period.
"Consolidated Leverage Ratio" shall mean, for any period, the ratio of (a)
the excess of (i) all Indebtedness of the Borrower and its Subsidiaries (other
than Indebtedness described in clause (h) of the definition of the term
"Indebtedness") as of the last day of such period over (ii) cash in excess of
$1,000,000 of the Borrower and its Subsidiaries as of the last day of such
period to (b) Consolidated EBITDA for such period, as adjusted by Pro Forma
Acquisition EBITDA with respect to any entity acquired in a Permitted
Acquisition during such period.
"Consolidated Net Income" shall mean, for any period, the sum of net
income (or loss) for such period of the Borrower and its Subsidiaries on a
consolidated basis determined in accordance with GAAP (on a "first in, first
out" inventory basis), but excluding: (a) the income (or loss) of any person
other than the Borrower or any wholly owned Subsidiary unless received by the
Borrower or any wholly owned Subsidiary in a cash distribution; (b) the income
(or loss) of any person accrued prior to the date it became a Subsidiary of the
Borrower or is merged into or consolidated with the Borrower or such person's
assets are acquired by the Borrower or any of its Subsidiaries; (c)
non-recurring gains (or losses) during such period and (d) extraordinary gains
(or losses), as defined under GAAP, net of related tax effects.
"Continuing Investors" shall mean the persons listed on Schedule 1.01(a)
and their Permitted Transferees.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Credit Event" shall have the meaning assigned to such term in Section
4.01.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Discount Debentures" shall mean the 13% Debentures of Holdings, issued on
the Closing Date for gross proceeds of $40,000,000.
"dollars" or "$" shall mean lawful money of the United States of America.
"Domestic Subsidiaries" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
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"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"Environmental Claim" shall mean any written accusation, allegation,
notice of violation, claim, demand, order, directive, cost recovery action or
other cause of action by, or on behalf of, any Governmental Authority or any
person for damages, injunctive or equitable relief, personal injury (including
sickness, disease or death), Remedial Action costs, tangible or intangible
property damage, natural resource damages, nuisance, pollution, any adverse
effect on the environment caused by any Hazardous Material, or for fines,
penalties or restrictions, resulting from or based upon (a) the existence, or
the continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases), (b) exposure to any Hazardous Material,
(c) the presence, use, handling, transportation, storage, treatment or disposal
of any Hazardous Material or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.
"Environmental Law" shall mean any and all applicable present and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
Release or threatened Release of any Hazardous Material or to health and safety
matters, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U. S.C. ss. ss. 9601 et seq. (collectively
"CERCLA"), the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42
U.S.C. xx.xx. 6901 et seq., the Federal Water Pollution Control Act, as amended
by the Clean Water Act of 1977, 33 U.S.C. xx.xx. 1251 et seq., the Clean Air Act
of 1970, as amended 42 U.S.C. xx.xx. 7401 et seq., the Toxic Substances Control
Act of 1976, 15 U.S.C. xx.xx. 2601 et seq., the Occupational Safety and Health
Act of 1970, as amended, 29 U.S.C. xx.xx. 651 et seq., the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. xx.xx. 11001 et seq., the
Safe Drinking Water Act of 1974, as amended, 42 U.S.C. xx.xx. 300(f) et seq.,
the Hazardous Materials Transportation Act, 49 U. S.C. xx.xx. 5101 et seq., and
any similar or implementing state or local law, and all amendments or
regulations promulgated under any of the foregoing.
"Environmental Permit" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"Equity Issuance" shall mean any issuance or sale by Holdings, the
Borrower or any Subsidiary of any shares of capital stock or other equity
securities of any such person or any obligations convertible into or
exchangeable for, or giving any person a right, option or warrant to acquire
such securities or such convertible or exchangeable obligations, except in each
case for (a) any issuance or sale to Holdings, the Borrower or any Subsidiary,
(b) any issuance of directors' qualifying shares, (c) sales or issuances of
common stock to management or employees of Holdings, the Borrower or any
Subsidiary under any employee stock option, stock purchase plan or other
employee benefit plan in existence from time to time to the extent that (i) the
excess of (A) the proceeds from all sales and issuances described in this clause
(c) over (B) in the case of Holdings, the
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amount of all redemptions of Holdings capital stock pursuant to Section
6.06(a)(iii) shall not exceed in the aggregate $1,000,000 in any Fiscal Year and
(ii) the shares of common stock issued pursuant to this clause (c) shall not
exceed 10% of the common stock of Holdings, the Borrower or such Subsidiary, as
applicable and (d) securities issued pursuant to the Recapitalization on the
Closing Date.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan; (b)
the adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the withdrawal or partial
withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; (f) the receipt by the Borrower or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to the intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (g)
the receipt by the Borrower or any ERISA Affiliate of any notice concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA; (h) the occurrence of a "prohibited transaction" with respect
to which the Borrower or any of its Subsidiaries is a "disqualified person"
(within the meaning of Section 4975 of the Code) or with respect to which the
Borrower or any such Subsidiary could otherwise be liable; and (i) any other
event or condition with respect to a Plan or Multiemployer Plan that could
reasonably be expected to result in liability of the Borrower.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Eurodollar Revolving Loan or Eurodollar
Term Loan.
"Eurodollar Revolving Loan" shall mean any Revolving Loan bearing interest
at a rate determined by reference to the Adjusted LIBO Rate in accordance with
the provisions of Article II.
"Eurodollar Revolving Borrowing" shall mean a Borrowing comprised of
Eurodollar Revolving Loans.
"Eurodollar Term Borrowing" shall mean a Borrowing comprised of Eurodollar
Term Loans.
9
"Eurodollar Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Article
VII.
"Excess Cash Flow" shall mean, for any Fiscal Year, the excess of (a) the
sum, without duplication, of (i) Consolidated EBITDA for such Fiscal Year, (ii)
extraordinary cash income of the Borrower and its Subsidiaries, if any, during
such Fiscal Year and not included in Consolidated EBITDA and (iii) reductions to
non-cash working capital of the Borrower and its Subsidiaries for such Fiscal
Year (i.e., the decrease, if any, in Consolidated Current Assets minus
Consolidated Current Liabilities from the beginning to the end of such Fiscal
Year), over (b) the sum, without duplication, of (i) the amount of any cash
income taxes payable by the Borrower and its Subsidiaries with respect to such
Fiscal Year, (ii) cash interest paid by the Borrower and its Subsidiaries during
such Fiscal Year, (iii) Consolidated Capital Expenditures committed or made in
cash in accordance with Section 6.11 during such Fiscal Year (and not deducted
from Excess Cash Flow in any prior year), (iv) scheduled principal repayments of
Indebtedness made by the Borrower and its Subsidiaries during such Fiscal Year,
(v) optional and mandatory prepayments of the principal of Loans during such
Fiscal Year, but only to the extent that such prepayments by their terms cannot
be reborrowed or redrawn and do not occur in connection with a refinancing of
all or any portion of the Loans, (vi) extraordinary cash expenses and losses
paid or incurred by the Borrower and its Subsidiaries, if any, during such
Fiscal Year and not included in Consolidated EBITDA and (vii) additions to
non-cash working capital for such Fiscal Year (i.e., the increase, if any, in
Consolidated Current Assets minus Consolidated Current Liabilities from the
beginning to the end of such Fiscal Year), provided that, to the extent
otherwise included therein, the Net Cash Proceeds of Asset Sales, Equity
Issuances, and cash expenditures (to the extent not financed) to make
investments pursuant to Section 6.04(c), (f) and (h) shall be excluded from the
calculation of Excess Cash Flow.
"Existing Credit Agreement" shall mean the Second Amended and Restated
Credit Agreement dated as of September 22, 1995, among the Borrower, Industrial
Tectonics Bearings Corporation, the lenders named therein and Xxxxxx Financial,
Inc., as amended.
"Existing Letter of Credit" shall mean each letter of credit issued for
the account of the Borrower or a Subsidiary under the Existing Credit Agreement
and set forth on Schedule 1.01(c).
"Fee Letter" shall mean the Fee Letter dated May 16, 1997, between the
Borrower and Credit Suisse First Boston.
"Fees" shall mean the Commitment Fees, the Administrative Agent's Fees,
the L/C Participation Fees and the Issuing Bank Fees.
"Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer, Treasurer or Controller of such
corporation.
10
"Fiscal Year" shall mean the fiscal year of the Borrower and the
Subsidiaries ending on the Saturday closest to March 31 of each calendar year.
For purposes of this Agreement, any particular Fiscal Year shall be designated
by reference to the calendar year in which such Fiscal Year ends.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" shall mean generally accepted accounting principles applied on a
consistent basis.
"Governmental Authority" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guarantee" of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
term "Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.
"Guarantee Agreement" shall mean the Guarantee Agreement, substantially in
the form of Exhibit D, made by the Guarantors in favor of the Collateral Agent
for the benefit of the Secured Parties.
"Guarantors" shall mean each person listed on Schedule 1.01(b) and each
other person that becomes party to a Guarantee Agreement as a Guarantor, and the
permitted successors and assigns of each such person.
"Hazardous Materials" shall mean all explosive or radioactive substances
or wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or
gaseous wastes, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Xxxxxx" shall mean Xxxxxx Financial, Inc.
"Holdings" shall mean Roller Bearing Holding Company, Inc. a Delaware
corporation.
"Immediate Family", with respect to any individual, shall mean his
brothers, sisters, spouse, children (including adopted children), parents,
parents-in-law, grandchildren, great grandchildren and other lineal descendants
and spouses of any of the foregoing.
11
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person under conditional sale or other title retention
agreements relating to property or assets purchased by such person, (d) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding trade accounts payable and accrued obligations
incurred in the ordinary course of business), (e) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such person, whether or not the obligations secured thereby have
been assumed, (f) all Guarantees by such person of Indebtedness of others, (g)
all Capital Lease Obligations of such person, (h) all obligations of such person
in respect of interest rate protection agreements, foreign currency exchange
agreements or other interest or exchange rate hedging arrangements and (i) all
obligations of such person as an account party in respect of letters of credit
and bankers' acceptances; provided, however, that amounts on deposit in the
Projects Fund pursuant to Section 5.03 of each of the Trust Indentures described
in the definition of the term "Bond Documents" shall not constitute Indebtedness
unless and until such amounts are disbursed to the Borrower pursuant to Section
3.4 of each of the Loan Agreements described in the definition of the term "Bond
Documents". The Indebtedness of any person (a) shall include the Indebtedness of
any partnership in which such person is a general partner and (b) in the case of
any limited recourse liability, shall not exceed the amount of such recourse.
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit E, among the Borrower, the Guarantors and the Collateral Agent.
"Interest Payment Date" shall mean, (a) with respect to any ABR Loan, the
last Business Day of each March, June, September and December, (b) with respect
to any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
that would have been an Interest Payment Date had successive Interest Periods of
three months' duration been applicable to such Borrowing, and, (c) in addition,
the date of any prepayment of such Borrowing or conversion of such Borrowing to
a Borrowing of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
Borrower may elect and (b) as to any ABR Borrowing, the period commencing on the
date of such Borrowing and ending on the earliest of (i) the next succeeding
March 31, June 30, September 30 or December 31, (ii) the Maturity Date and (iii)
the date such Borrowing is converted to a Borrowing of a different Type in
accordance with Section 2.10 or repaid or prepaid in accordance with Section
2.12 or 2.13; provided, however, that if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
12
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or
similar agreement or arrangement designed to protect the Borrower or any
Subsidiary against fluctuations in interest rates, and not entered into for
speculation.
"Issuing Bank" shall mean, as the context may require, (a) Xxxxxx, with
respect to each Existing Letter of Credit so long as such Existing Letter of
Credit remains outstanding, (b) CSFB, with respect to each Letter of Credit
issued by it, (c) any other Lender that may become an Issuing Bank pursuant to
Section 2.22(i) or (d) collectively, all of the foregoing.
"Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.05(c).
"Joint Venture" shall mean a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form.
"L/C Commitment" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.22.
"L/C Disbursement" shall mean a payment or disbursement made by an Issuing
Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
principal amount of all L/C Disbursements that have not yet been reimbursed at
such time. The L/C Exposure of any Revolving Credit Lender at any time shall
mean its Applicable Percentage of the aggregate L/C Exposure at such time.
"L/C Participation Fee" shall have the meaning assigned to such term in
Section 2.05(c).
"Lenders" shall mean (a) the financial institutions listed on Schedule
2.01 (other than any such financial institution that has ceased to be a party
hereto pursuant to an Assignment and Acceptance) and (b) any financial
institution that has become a party hereto pursuant to an Assignment and
Acceptance in accordance with the terms hereof.
"Letter of Credit" shall mean (a) any letter of credit issued pursuant to
Section 2.22 and (b) the Existing Letters of Credit.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing, the rate
per annum determined by the Administrative Agent at approximately 11:00 a.m.
(London time) on the date which is two Business Days prior to the beginning of
the relevant Interest Period (as specified in the applicable Borrowing Request)
by reference to the British Bankers' Association Interest Settlement Rates for
deposits in Dollars (as set forth by any service selected by the Administrative
Agent which has been nominated by the British Bankers' Association as an
authorized information vendor for the purpose of displaying such rates) for a
period equal to such Interest Period, provided that, to the extent that an
interest rate is not ascertainable pursuant to the foregoing provisions of this
definition, the "LIBO Rate" shall be the interest rate per annum determined by
the Administrative Agent to be the
13
average of the rates per annum at which deposits in Dollars are offered for such
relevant Interest Period to major banks in the London interbank market in
London, England by the Administrative Agent at approximately 11:00 a.m. (London
time) on the date which is two Business Days prior to the beginning of such
Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Loan Documents" shall mean this Agreement, the Letters of Credit, the
Guarantee Agreement, the Security Documents and the Indemnity, Subrogation and
Contribution Agreement.
"Loan Parties" shall mean the Borrower and the Guarantors.
"Loans" shall mean the Revolving Loans and the Term Loans.
"Margin Stock" shall have the meaning assigned to such term in Regulation
U.
"Material Adverse Effect" shall mean (a) a materially adverse effect on
the business, assets, operations or condition, financial or otherwise, of the
Borrower and the Subsidiaries, taken as a whole, (b) material impairment of the
ability of the Borrower or any other Loan Party to perform any of its
obligations under any Loan Document to which it is or will be a party or (c)
material impairment of the validity or enforceability of this Agreement or any
of the other Loan Documents.
"Maturity Date" shall mean the fifth anniversary of the Closing Date.
"Mortgaged Properties" shall mean the owned real properties and leasehold
and subleasehold interests of the Loan Parties specified on Schedule 1.01(d).
"Mortgages" shall mean the mortgages, deeds of trust, leasehold mortgages,
assignments of leases and rents, modifications and other security documents
delivered pursuant to clause (i) of Section 4.02(j) or pursuant to Section 5.11,
each substantially in the form of Exhibit F.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale, the
cash proceeds (including cash proceeds subsequently received (as and when
received) in respect of non-cash consideration initially received and including
all insurance settlements and condemnation awards in excess of $250,000 from any
single event or series of related events), net of (i) transaction expenses
(including reasonable broker's fees or commissions, legal fees, accounting fees,
investment banking fees and other professional fees, transfer and similar taxes
and the Borrower's good faith estimate of income taxes paid or payable in
connection with the receipt of such cash proceeds), (ii) amounts
14
provided as a reserve, in accordance with GAAP, including pursuant to any escrow
arrangement, against any liabilities under any indemnification obligations
associated with such Asset Sale (provided that, to the extent and at the time
any such amounts are released from such reserve, such amounts shall constitute
Net Cash Proceeds), (iii) the principal amount, premium or penalty, if any,
interest and other amounts on any Indebtedness for borrowed money which is
secured by the asset sold in such Asset Sale or which is listed on Schedule 6.01
and is required to be repaid with such proceeds (other than any such
Indebtedness assumed by the purchaser of such asset) and (iv) distributions and
other payments made to holders of interests in Joint Ventures and Subsidiaries
that are not wholly owned by the Borrower or any of its Subsidiaries, in each
case made pro rata in accordance with their interests in such Joint Ventures or
Subsidiaries, as applicable; provided, however, that, with respect to the
proceeds of any Asset Sale in the amount of $250,000 or more from any single
event or series of related events and less than or equal to $5,000,000 in the
aggregate in any Fiscal Year, if (A) the Borrower shall deliver a certificate of
a Financial Officer to the Administrative Agent at the time of receipt thereof
setting forth the Borrower's intent to reinvest such proceeds in productive
assets of a kind then used or usable in the business of the Borrower and its
Subsidiaries within one year of receipt of such proceeds and (B) no Default or
Event of Default shall have occurred and shall be continuing at the time of such
certificate or at the proposed time of the application of such proceeds, such
proceeds shall not constitute Net Cash Proceeds except to the extent not so used
at the end of such one-year period, at which time such proceeds shall be deemed
to be Net Cash Proceeds, and (b) with respect to any Equity Issuance or any
other issuance or disposition of Indebtedness, the cash proceeds thereof, net of
all taxes and customary fees, commissions, costs and other expenses (including
reasonable broker's fees or commissions, legal fees, accounting fees, investment
banking fees and other professional fees, and underwriter's discounts and
commissions) incurred in connection therewith.
"Obligations" shall mean all obligations defined as "Obligations" in the
Guarantee Agreement and the Security Documents.
"Outside Shareholders" shall have the meaning assigned to such term in the
preamble to this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex 2 to the Security Agreement.
"Permitted Acquisitions" shall mean acquisitions of not less than 100% of
the outstanding capital stock or other equity interests of any corporation,
partnership, a division of any corporation or any similar business unit (or of
substantially all the assets and business of any of the foregoing) engaged in a
Related Business (each, an "Acquisition") so long as (a) in the case of each
such Acquisition of capital stock, such Acquisition was not preceded by an
unsolicited tender offer for such capital stock by the Borrower or any of its
Affiliates, (b) in the case of each Acquisition, the excess of the Revolving
Credit Commitments over the Aggregate Revolving Credit Exposure after giving
effect to any Revolving Loans used to finance the cash consideration paid in
connection with such Acquisition, to refinance Indebtedness in connection with
such Acquisition and to pay related fees
15
and expenses, shall equal at least $5,000,000, (c) such corporation,
partnership, division, business or assets, as applicable, are located in the
United States (or the principal place of business with respect thereto and
substantially all of the applicable assets are located in the United States) or,
in the case of Acquisitions with respect to which the total consideration does
not exceed $15,000,000 in the aggregate for all Acquisitions, in any country
included in the European Economic Community on the date hereof and (d) the
Borrower shall have delivered to the Administrative Agent a certificate
certifying that at the time of and immediately after giving effect to such
Permitted Acquisition, (i) no Event of Default or Default shall have occurred
and be continuing, (ii) the ratio of (A) Indebtedness incurred by the Borrower
or any Subsidiary to finance such Permitted Acquisition to (B) Pro Forma
Acquisition EBITDA of the entity acquired pursuant to such Permitted Acquisition
for the period of four fiscal quarters ended on the last day of the most recent
fiscal quarter shall be less than 4.75 to 1.00 and (iii) the Pro Forma
Acquisition EBITDA of the entity acquired pursuant to such Permitted Acquisition
for the period of four fiscal quarters ended on the last day of the most recent
fiscal quarter shall be less than or equal to 20% of the sum of (A) the
Consolidated EBITDA of the Borrower and its Subsidiaries for the period of four
fiscal quarters ended on the last day of the most recent fiscal quarter and (B)
such Pro Forma Acquisition EBITDA.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition,
the highest credit rating obtainable from Standard & Poor's Ratings
Service or from Xxxxx'x Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within one year from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any Lender or any domestic office of any
commercial bank organized under the laws of the United States of America
or any State thereof that has a combined capital and surplus and undivided
profits of not less than $250,000,000;
(d) other investment instruments approved in writing by the Required
Lenders and offered by financial institutions which have a combined
capital and surplus and undivided profits of not less than $250,000,000;
and
(e) shares of funds registered under the Investment Company Act of
1940, as amended, that have assets of at least $100,000,000 and invest
substantially all their assets in obligations described in clauses (a)
through (d) above, to the extent that such shares are rated by Xxxxx'x
Investors Service, Inc. or Standard & Poor's Ratings Service in one of the
two highest rating categories assigned by such agency for shares of such
nature;
16
provided that any investment which, when made, constituted an Permitted
Investment may continue to be held (but not reinvested) notwithstanding
that such investment may thereafter cease to constitute a Permitted
Investment.
"Permitted Transferee" shall mean, with respect to any person, (a) if such
person is an individual, (i) a member of the Immediate Family of such person,
(ii) a trust or other similar legal entity for the primary benefit of such
person and/or one or more members of his Immediate Family, or (iii) a
partnership, limited partnership, limited liability company, corporation or
other entity in which such person and members of his Immediate Family possess
100% of the outstanding voting securities, (b) if such person is a partnership
or limited liability company, the general partners, limited partners or members
thereof to whom securities are transferred on a pro rata basis in accordance
with the terms of the underlying partnership agreement or limited liability
company agreement and (c) if such person is a corporation, any wholly owned
subsidiary or parent of such corporation that wholly owns such corporation.
"person" shall mean any natural person, corporation, business trust, joint
venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" shall mean the Pledge Agreement, substantially in the
form of Exhibit G, between the Borrower, the Subsidiaries party thereto and the
Collateral Agent for the benefit of the Secured Parties.
"Pro Forma Acquisition EBITDA" shall mean with respect to any entity
acquired in a Permitted Acquisition, the amount of Consolidated EBITDA of such
entity (as if such entity were the Borrower) determined by the Borrower and
acceptable to Administrative Agent in its reasonable discretion, based upon and
derived from financial information delivered to Administrative Agent prior to
consummation of such Permitted Acquisition for the four-quarter period ending on
the last day of the immediately preceding fiscal quarter of the Borrower for
which such financial information for such entity have been delivered to
Administrative Agent, adjusted by the estimated amount of non-recurring revenues
and expenditures with respect to the business of such entity, as calculated by
the Borrower and acceptable to Administrative Agent in its reasonable
discretion. On each subsequent determination date occurring within one year
after the consummation of a Permitted Acquisition, the entity's Pro Forma
Acquisition EBITDA shall include the Pro Forma Acquisition EBITDA only for those
fiscal quarters in the trailing four-quarter period occurring prior to the
closing of such Permitted Acquisition.
"Recapitalization" shall have the meaning assigned to such term in the
preamble to this Agreement.
17
"Redemption Agreement" shall mean the Redemption and Warrant Purchase
Agreement dated as of May 20, 1997, among Holdings, the Continuing Investors,
the Outside Shareholders and Xxxxxxx X. Xxxxxxxx, as purchaser representative.
"Register" shall have the meaning given such term in Section 9.04(d).
"Regulation G" shall mean Regulation G of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation T" shall mean Regulation T of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Related Business" shall mean any business of the Borrower and its
Subsidiaries as conducted on the Closing Date and any business related or
ancillary thereto.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the environment.
"Remedial Action" shall mean (a) "remedial action" as such term is defined
in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken to: (i) cleanup, remove, treat,
xxxxx or in any other way address any Hazardous Material in the environment;
(ii) prevent the Release or threat of Release, or minimize the further Release
of any Hazardous Material so it does not migrate or endanger or threaten to
endanger public health, welfare or the environment; or (iii) perform studies and
investigations in connection with, or as a precondition to, (i) or (ii) above.
"Repayment Date" shall have the meaning given such term in Section 2.11.
"Required Lenders" shall mean, at any time, Lenders having Loans
outstanding, L/C Exposure and unused Revolving Credit and Term Loan Commitments
representing at least a majority of the sum of all Loans outstanding, L/C
Exposure and unused Revolving Credit and Term Loan Commitments at such time.
"Responsible Officer" of any corporation shall mean any executive officer
or Financial Officer of such corporation and any other officer or similar
official thereof responsible for the administration of the obligations of such
corporation in respect of this Agreement.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of Revolving
Loans.
18
"Revolving Credit Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
"Revolving Credit Exposure" shall mean, with respect to any Lender at any
time, the aggregate principal amount at such time of all outstanding Revolving
Loans of such Lender, plus the aggregate amount at such time of such Lender's
L/C Exposure.
"Revolving Credit Lender" shall mean a Lender with a Revolving Credit
Commitment.
"Revolving Loans" shall mean the revolving loans made by the Lenders to
the Borrower pursuant to clause (b) of Section 2.01. Each Revolving Loan shall
be a Eurodollar Revolving Loan or an ABR Revolving Loan.
"Sale and Leaseback" shall have the meaning assigned to such term in
Section 6.03.
"Secured Parties" shall have the meaning assigned to such term in the
Security Agreement.
"Security Agreement" shall mean the Security Agreement, substantially in
the form of Exhibit H, among the Borrower, the Subsidiaries party thereto and
the Collateral Agent for the benefit of the Secured Parties.
"Security Documents" shall mean the Mortgages, the Security Agreement, the
Pledge Agreement and each of the security agreements, mortgages and other
instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Section 5.11.
"Senior Subordinated Notes" shall mean (a) the 9-5/8% Senior Subordinated
Notes due 2007 of the Borrower, issued on the Closing Date in an aggregate
principal amount of $110,000,000 (the "Original Senior Subordinated Notes") and
(b) notes (the "Exchange Notes") of the Borrower having terms substantially
identical in all material respects to the Original Senior Subordinated Notes
(except that the Exchange Notes will not contain terms with respect to transfer
restrictions).
"Statutory Reserves" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch,
Affiliate, or other fronting office making or holding a Loan) is subject (a)
with respect to the Base CD Rate, for new negotiable nonpersonal time deposits
in dollars of over $100,000 with maturities approximately equal to three months,
and (b) with respect to the Adjusted LIBO Rate, for Eurocurrency Liabilities (as
defined in Regulation D of the Board). Such reserve percentages shall include
those imposed pursuant to such Regulation D Eurodollar Loans shall be deemed to
constitute Eurocurrency Liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
19
that may be available from time to time to any Lender under such Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"subsidiary" shall mean, with respect to any person (herein referred to as
the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held, or (b) that is, at the time any
determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Tax Sharing Agreement" shall mean the Tax Sharing Agreement,
substantially in the form of Exhibit I, among Holdings, the Borrower and
Holdings' other direct and indirect subsidiaries.
"Term Borrowing" shall mean a Borrowing comprised of Term Loans.
"Term Loan Commitments" shall mean, with respect to each Lender, the
commitment of such Lender to make Term Loans hereunder as set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed
its Term Loan Commitment, as applicable, as the same may be (a) reduced from
time to time pursuant to Section 2.09 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 9.04.
"Term Loans" shall mean the term loans made by the Lenders to the Borrower
pursuant to Section 2.01. Each Term Loan shall be a Eurodollar Term Loan or an
ABR Term Loan.
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so reported
on such day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10: 00 a.m., New York City
time, on such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Administrative Agent from three New York City
negotiable certificate of deposit dealers of recognized standing selected by it.
"Total Revolving Credit Commitment" shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time.
"Transactions" shall have the meaning assigned to such term in Section
3.02.
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"Type", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term "Rate" shall include the
Adjusted LIBO Rate and the Alternate Base Rate.
"wholly owned Subsidiary" of any person shall mean a subsidiary of such
person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the equity or 100% of the ordinary
voting power or 100% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held by such person or one or
more wholly owned subsidiaries of such person or by such person and one or more
wholly owned subsidiaries of such person.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, (a) any reference in this Agreement to any agreement,
instrument or other document shall mean such agreement, instrument or other
document as amended, restated, supplemented or otherwise modified from time to
time (subject to any restrictions on such amendments, restatements, supplements
or modifications set forth herein) and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect on the
date of the financial statements referred to in Section 3.05(a).
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, (a) to make a Term Loan to the Borrower on the
Closing Date in a principal amount not to exceed its Term Loan Commitment, and
(b) to make Revolving Loans to the Borrower, at any time and from time to time
on or after the date hereof, and until the earlier of the Maturity Date and the
termination of the Revolving Credit Commitment of such Lender in accordance with
the terms hereof, in an aggregate principal amount at any time outstanding that
will not result in (i) such Lender's Revolving Credit Exposure exceeding (ii)
such Lender's Revolving Credit Commitment. Within the limits set forth in clause
(b) of the preceding sentence and subject to the terms, conditions and
limitations set forth herein, the Borrower may borrow, pay or prepay and
reborrow Revolving Loans. Amounts paid or prepaid in respect of Term Loans may
not be reborrowed.
21
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
applicable Revolving Credit Commitments; provided, however, that the failure of
any Lender to make any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender). Except for Loans deemed made pursuant to Section
2.02(f), the Loans comprising any Borrowing shall be in an aggregate principal
amount that is (i) in the case of Eurodollar Loans, an integral multiple of
$1,000,000 and not less than $3,000,000 or (ii) in the case of ABR Loans, (A) an
integral multiple of $100,000 and not less than $500,000 or (B) equal to the
remaining available balance of the applicable Commitments.
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request pursuant
to Section 2.03. Each Lender may at its option make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement. Borrowings of more than one Type may be outstanding at the same time;
provided, however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than 10 Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.
(c) Except with respect to Loans made pursuant to Section 2.02(f), each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 1:00 p.m.,
New York City time, and the Administrative Agent shall by 2:00 p.m., New York
City time, credit the amounts so received to an account in the name of the
Borrower, maintained with the Administrative Agent and designated by the
Borrower in the applicable Borrowing Request or, if a Borrowing shall not occur
on such date because any condition precedent herein specified shall not have
been met, return the amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, a rate determined by the Administrative Agent
to represent its cost of overnight or short-term funds (which determination
shall be conclusive absent manifest error). If such Lender shall repay to the
22
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Borrowing if the Interest Period requested
with respect thereto would end after the Maturity Date.
(f) If any Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.22(e) within the time specified in such
Section, such Issuing Bank will promptly notify the Administrative Agent of the
L/C Disbursement and the Administrative Agent will promptly notify each
Revolving Credit Lender of such L/C Disbursement and its Applicable Percentage
thereof. Each Revolving Credit Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New York
City time, on such date (or, if such Revolving Credit Lender shall have received
such notice later than 12:00 (noon), New York City time, on any day, not later
than 10:00 a.m., New York City time, on the immediately following Business Day),
an amount equal to such Lender's Applicable Percentage of such L/C Disbursement
(it being understood that such amount shall be deemed to constitute an ABR
Revolving Loan of such Lender and such payment shall be deemed to have reduced
the L/C Exposure), and the Administrative Agent will promptly (and not later
than 5:00 p.m. on such date of receipt by the Administrative Agent) pay to such
Issuing Bank amounts so received by it from the Revolving Credit Lenders. The
Administrative Agent will promptly pay to the applicable Issuing Bank any
amounts received by it from the Borrower pursuant to Section 2.22(e) prior to
the time that any Revolving Credit Lender makes any payment pursuant to this
paragraph (f); any such amounts received by the Administrative Agent thereafter
will be promptly remitted by the Administrative Agent to the Revolving Credit
Lenders that shall have made such payments and to the Issuing Banks, as their
interests may appear. If any Revolving Credit Lender shall not have made its
Applicable Percentage of such L/C Disbursement available to the Administrative
Agent as provided above, such Lender and the Borrower severally agree to pay
interest on such amount, for each day from and including the date such amount is
required to be paid in accordance with this paragraph to but excluding the date
such amount is paid, to the Administrative Agent for the account of such Issuing
Bank at (i) in the case of the Borrower, a rate per annum equal to the interest
rate applicable to Revolving Loans pursuant to Section 2.06(a), and (ii) in the
case of such Lender, for the first such day, the Federal Funds Effective Rate,
and for each day thereafter, the Alternate Base Rate.
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing (other
than a deemed Borrowing pursuant to Section 2.02(f), as to which this Section
2.03 shall not apply), the Borrower shall deliver or telecopy to the
Administrative Agent a duly completed Borrowing Request (a) in the case of a
Eurodollar Borrowing, not later than 12:00 noon, New York City time, three
Business Days before a proposed Borrowing, and (b) in the case of an ABR
Borrowing, not later than 12:00 noon, New York City time, one Business Day
before a proposed Borrowing. Each Borrowing Request shall be irrevocable, shall
be signed by or on behalf of the Borrower and shall specify the following
information: (i) whether the Borrowing then being requested is to be a Term
Borrowing or a Revolving Credit Borrowing, and whether such Borrowing is to be a
Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which
shall be a Business Day), (iii) the number and location of the account to which
funds are to be disbursed (which shall be an account that complies with the
requirements of Section 2.02(c)); (iv) the amount of such Borrowing; and (v) if
such
23
Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect
thereto; provided, however, that, notwithstanding any contrary specification in
any Borrowing Request, each requested Borrowing shall comply with the
requirements set forth in Section 2.02. If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall be
an ABR Borrowing. If no Interest Period with respect to any Eurodollar Borrowing
is specified in any such notice, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration. The Administrative Agent
shall promptly advise the applicable Lenders of any notice given pursuant to
this Section 2.03 (and the contents thereof), and of each Lender's portion of
the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the principal amount of each Term Loan of such Lender as
provided in Section 2.11 and the then unpaid principal amount of each Revolving
Loan on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower or any Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) above shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms.
(e) Notwithstanding any other provision of this Agreement, in the event
any Lender shall request and receive a promissory note payable to such Lender
and its registered assigns, the interests represented by such note shall at all
times (including after any assignment of all or part of such interests pursuant
to Section 9.04) be represented by one or more promissory notes payable to the
payee named therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender, through
the Administrative Agent, on the last Business Day of March, June, September and
December in each year and on each date on which any Commitment of such Lender
shall expire or be terminated as provided herein, a commitment fee (a
"Commitment Fee") of 0.50% per annum on the average daily unused amount of the
Commitments of such Lender during the preceding quarter (or other period
commencing with the date hereof or ending with the Maturity Date or the date on
which the Commitments of such Lender shall expire or be terminated). All
Commitment Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days. The Commitment Fee due
24
to each Lender shall commence to accrue on the date hereof and shall cease to
accrue on the date on which the Commitment of such Lender shall expire or be
terminated as provided herein.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, the administrative fees set forth in the Fee Letter at the times and in
the amounts specified therein (the "Administrative Agent Fees").
(c) The Borrower agrees to pay (i) to each Revolving Credit Lender,
through the Administrative Agent, on the last Business Day of March, June,
September and December of each year and on the date on which the Revolving
Credit Commitment of such Lender shall be terminated as provided herein, a fee
(an "L/C Participation Fee") calculated on such Lender's Applicable Percentage
of (A) the average daily aggregate L/C Exposure (excluding the portion thereof
attributable to unreimbursed L/C Disbursements and the portion thereof for which
cash collateral has been provided pursuant to Section 2.22(j)) and (B) the
portion of the average daily L/C Exposure for which cash collateral has been
provided pursuant to Section 2.22(j), in each case during the preceding quarter
(or shorter period commencing with the date hereof or ending with the Maturity
Date or the date on which all Letters of Credit have been canceled or have
expired and the Revolving Credit Commitments of all Lenders shall have been
terminated) at a rate equal to 2.5% per annum in the case of amounts described
in clause (A) of this clause (i) and .50% per annum in the case of amounts
described in clause (B) of this clause (i), and (ii) to each Issuing Bank with
respect to each Letter of Credit, a fronting fee at a rate of 0.25% per annum of
the average daily L/C Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements, plus the standard issuance and drawing fees
specified from time to time by such Issuing Bank (the "Issuing Bank Fees"). All
L/C Participation Fees and Issuing Bank Fees shall be computed on the basis of
the actual number of days elapsed in a year of 360 days.
All Fees shall be paid on the dates due, in immediately available funds,
to the Administrative Agent for distribution, if and as appropriate, among the
Lenders, except that the Issuing Bank Fees shall be paid directly to the
applicable Issuing Bank. Once paid, none of the Fees shall be refundable under
any circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section
2.07, the Loans comprising each ABR Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 365 or 366 days,
as the case may be, when the Alternate Base Rate is determined by reference to
the Prime Rate and over a year of 360 days at all other times) at a rate per
annum equal to the Alternate Base Rate plus 1.50%.
(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
2.50%.
Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or
day within an Interest Period, as the case may be, shall be
25
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, or under any other Loan Document,
the Borrower shall on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount to but excluding the date of actual
payment (after as well as before judgment) (a) in the case of overdue principal,
at the rate otherwise applicable to such Loan pursuant to Section 2.06 plus
2.00% per annum and (b) in all other cases, at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be, when determined by reference to the Prime Rate and over a year
of 360 days at all other times) equal to the sum of the Alternate Base Rate plus
2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to any Lender of making or maintaining
its Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or telecopy notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The unused
Term Loan Commitments shall automatically terminate at 5:00 p.m., New York City
time, on the Closing Date. The Revolving Credit Commitments and the L/C
Commitment shall automatically terminate on the Maturity Date. Notwithstanding
the foregoing, all the Commitments shall automatically terminate at 5:00 p.m.,
New York City time, on June 30, 1997, if the initial Credit Event shall not have
occurred by such time.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrower may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Term Loan Commitments or the Revolving Credit Commitments; provided,
however, that (i) each partial reduction of the aggregate Term Loan Commitments
or the aggregate Revolving Credit Commitments shall be in an integral multiple
of $1,000,000 and in a minimum amount of $3,000,000 and (ii) the Total Revolving
Credit Commitment shall not be reduced to an amount that is less than the
Aggregate Revolving Credit Exposure at the time.
(c) Each reduction in the Term Loan Commitments or the Revolving Credit
Commitments hereunder shall be made ratably among the Lenders in accordance with
their respective applicable Commitments. The Borrower shall pay to the
Administrative Agent for the account of the applicable
26
Lenders, on the date of each termination or reduction, the Commitment Fees on
the amount of the Commitments so terminated or reduced accrued to but excluding
the date of such termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (a) not later than 12:00 noon, New York City time, one
Business Day prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (b) not later than 12:00 noon, New York City time, three Business
Days prior to conversion or continuation, to convert any ABR Borrowing into a
Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar
Borrowing for an additional Interest Period, and (c) not later than 12:00 noon,
New York City time, three Business Days prior to conversion, to convert the
Interest Period with respect to any Eurodollar Borrowing to another permissible
Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing
shall satisfy the limitations specified in Sections 2.02(a) and 2.02(b)
regarding the principal amount and maximum number of Borrowings of the
relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the Borrower at the time of
conversion;
(iv) if any Eurodollar Borrowing is converted at a time other than
the end of the Interest Period applicable thereto, the Borrower shall pay,
upon demand, any amounts due to the Lenders pursuant to Section 2.16;
(v) no Interest Period may be requested that would end after the
Maturity Date;
(vi) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding clause shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing; and
(vii) upon notice to the Borrower from the Administrative Agent
given at the request of the Required Lenders, after the occurrence and
during the continuance of a Default or Event of Default, no outstanding
Loan may be converted into, or continued as, a Eurodollar Loan.
27
Each notice pursuant to this Section 2.10 shall be irrevocable and shall
refer to this Agreement and specify (i) the identity and amount of the Borrowing
that the Borrower requests be converted or continued, (ii) whether such
Borrowing is to be converted to or continued as a Eurodollar Borrowing or an ABR
Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (iv) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar Borrowing, the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall advise the Lenders of any notice given
pursuant to this Section 2.10 and of each Lender's portion of any converted or
continued Borrowing. If the Borrower shall not have given notice in accordance
with this Section 2.10 to continue any Borrowing into a subsequent Interest
Period (and shall not otherwise have given notice in accordance with this
Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the
Interest Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be continued into a new Interest Period as an ABR Borrowing.
SECTION 2.11. Repayment of Term Borrowings. (a) The Term Borrowings shall
be payable as to principal in twenty consecutive installments payable on the
dates (each a "Repayment Date") and in the amounts set forth below; provided
that if any such Repayment Date is not a Business Day, the payment with respect
to such date shall be payable on the next preceding Business Day:
Repayment Date Amount
September 30, 1997 $ 250,000
December 31, 1997 250,000
March 31, 1998 250,000
June 30, 1998 250,000
September 30, 1998 375,000
December 31, 1998 375,000
March 31, 1999 375,000
June 30, 1999 375,000
September 30, 1999 875,000
December 31, 1999 875,000
March 31, 2000 875,000
June 30, 2000 875,000
September 30, 2000 1,125,000
December 31, 2000 1,125,000
March 31, 2001 1,125,000
June 30, 2001 1,125,000
September 30, 2001 1,375,000
December 31, 2001 1,375,000
March 31, 2002 1,375,000
Maturity Date 1,375,000
28
(b) To the extent not previously paid, all Term Borrowings shall be due
and payable on the Maturity Date. Each payment of Term Borrowings pursuant to
this Section 2.11 shall be accompanied by accrued interest on the principal
amount paid to but excluding the date of payment.
SECTION 2.12. Prepayment. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, upon at
least three Business Days' prior written or telecopy notice (or telephone notice
promptly confirmed by written or telecopy notice) to the Administrative Agent
before 11: 00 a.m., New York City time; provided, however, that each partial
prepayment shall be in an amount that is an integral multiple of (i) in the case
of Eurodollar Loans, $1,000,000 and not less than $3,000,000 and (ii) in the
case of ABR Loans, $100,000 and not less than $500,000.
(b) Optional prepayments of Term Loans shall be applied pro rata against
the remaining scheduled installments of principal due in respect of the Term
Loans.
(c) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein. All prepayments under this Section
2.12 shall be subject to Section 2.16 but otherwise without premium or penalty.
All prepayments under this Section 2.12 shall be accompanied by accrued interest
on the principal amount being prepaid to the date of payment.
SECTION 2.13. Mandatory Prepayments. (a) In the event of any termination
of all the Revolving Credit Commitments, the Borrower shall repay or prepay all
its outstanding Revolving Credit Borrowings on the date of such termination. In
the event of any partial reduction of the Revolving Credit Commitments, then (i)
at or prior to the effective date of such reduction, the Administrative Agent
shall notify the Borrower and the Revolving Credit Lenders of the Aggregate
Revolving Credit Exposure after giving effect thereto and (ii) if the Aggregate
Revolving Credit Exposure would exceed the Total Revolving Credit Commitment
after giving effect to such reduction or termination, then the Borrower shall,
on the date of such reduction or termination, repay or prepay Revolving Credit
Borrowings in an amount sufficient to eliminate such excess.
(b) Not later than the third Business Day following the completion of any
Asset Sale, the Borrower shall apply 100% of the Net Cash Proceeds received with
respect thereto to prepay outstanding Term Loans in accordance with Section
2.13(f).
(c) In the event and on each occasion that an Equity Issuance occurs at
any time when the Consolidated Leverage Ratio for the period of four consecutive
fiscal quarters most recently ended for which financial statements have been
delivered pursuant to Section 5.04(a) or (b), as applicable, is greater than or
equal to 3.50 to 1.00, the Borrower shall, substantially simultaneously with
(and in any event not later than the third Business Day next following) the
occurrence of such Equity Issuance, apply 50% of the Net Cash Proceeds therefrom
to prepay outstanding Term Loans in accordance with Section 2.13(f); provided,
however, that in the event such Equity Issuance is made
29
in contemplation of, and within five Business Days of, a Permitted Acquisition
pursuant to Section 6.04, such Net Cash Proceeds shall be reduced by an amount
equal to 25% of the purchase price of such Permitted Acquisition.
(d) No later than the earlier of (i) 90 days after the end of each Fiscal
Year, commencing with the Fiscal Year ending on March 31, 1998, and (ii) the
third Business Day next following the date on which the financial statements
with respect to such Fiscal Year are delivered pursuant to Section 5.04(a), the
Borrower shall prepay outstanding Term Loans in accordance with Section 2.13(f)
in an aggregate principal amount equal to 50% of Excess Cash Flow for the Fiscal
Year then ended.
(e) In the event that Holdings, any Loan Party or any subsidiary of a Loan
Party shall receive Net Cash Proceeds from the issuance or other disposition of
Indebtedness for money borrowed of Holdings, any Loan Party or any subsidiary of
a Loan Party (other than (i) any cash proceeds from the issuance of the Senior
Subordinated Notes or the Discount Debentures, or (ii) Indebtedness for money
borrowed permitted pursuant to Section 6.01), the Borrower shall, substantially
simultaneously with (and in any event not later than the third Business Day next
following) the receipt of such Net Cash Proceeds by Holdings, such Loan Party or
such subsidiary, apply an amount equal to 100% of such Net Cash Proceeds to
prepay outstanding Term Loans in accordance with Section 2.13(f).
(f) Mandatory prepayments of outstanding Term Loans under this Agreement
shall be applied pro rata against the remaining scheduled installments of
principal due in respect of the Term Loans under Section 2.11.
(g) The Borrower shall deliver to the Administrative Agent, at the time of
each prepayment required under this Section 2.13, (i) a certificate signed by a
Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent practicable,
at least one day's prior written notice of such prepayment. Each notice of
prepayment shall specify the prepayment date, the Type of each Loan being
prepaid and the principal amount of each Loan (or portion thereof to be prepaid.
All prepayments of Borrowings under this Section 2.13 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.
(h) Amounts to be applied pursuant to this Section 2.13 to the prepayment
of Term Loans and Revolving Loans shall be applied, as applicable, first to
reduce outstanding ABR Term Loans and ABR Revolving Loans. Any amounts remaining
after each such application shall, at the option of the Borrower, be applied to
prepay Eurodollar Term Loans or Eurodollar Revolving Loans, as the case may be,
immediately and/or shall be deposited in the Prepayment Account (as defined
below). The Administrative Agent shall apply any cash deposited in the
Prepayment Account (i) allocable to Term Loans to prepay Eurodollar Term Loans
and (ii) allocable to Revolving Loans to prepay Eurodollar Revolving Loans, in
each case on the last day of their respective Interest Periods (or, at the
direction of the Borrower, on any earlier date) until all outstanding Term Loans
or Revolving Loans, as the case may be, have been prepaid or until all the
allocable cash on deposit with respect to such Loans has been exhausted. For
purposes of this Agreement, the term "Prepayment Account" shall mean an account
established by the Borrower with the Administrative Agent and over which the
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal for application in accordance with this paragraph
(i). The Administrative Agent will, at the request of the Borrower, invest
amounts on deposit in the Prepayment Account in Permitted
30
Investments that mature prior to the last day of the applicable Interest Periods
of the Eurodollar Term Borrowings or Eurodollar Revolving Borrowings to be
prepaid, as the case may be; provided, how ever, that (i) the Administrative
Agent shall not be required to make any investment that, in its sole judgment,
would require or cause the Administrative Agent to be in, or would result in
any, violation of any law, statute, rule or regulation and (ii) the
Administrative Agent shall have no obligation to invest amounts on deposit in
the Prepayment Account if a Default or Event of Default shall have occurred and
be continuing. The Borrower shall indemnify the Administrative Agent for any
losses relating to the investments so that the amount available to prepay
Eurodollar Borrowings on the last day of the applicable Interest Period is not
less than the amount that would have been available had no investments been made
pursuant thereto. Other than any interest earned on such investments, the
Prepayment Account shall not bear interest. Interest or profits, if any, on such
investments shall be deposited in the Prepayment Account and reinvested and
disbursed as specified above. If the maturity of the Loans has been accelerated
pursuant to Article VII, the Administrative Agent may, in its sole discretion,
apply all amounts on deposit in the Prepayment Account to satisfy any of the
Obligations. The Borrower hereby grants to the Administrative Agent, for its
benefit and the benefit of the Issuing Banks and the Lenders, a security
interest in the Prepayment Account to secure the Obligations.
SECTION 2.14. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of or
credit extended by any Lender or any Issuing Bank (except any such reserve
requirement which is reflected in the Adjusted LIBO Rate) or shall impose on
such Lender or such Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein, and the result of any of the
foregoing shall be to increase the cost to such Lender or such Issuing Bank of
making or maintaining any Eurodollar Loan or increase the cost to any Lender of
issuing or maintaining any Letter of Credit or purchasing or maintaining a
participation therein or to reduce the amount of any sum received or receivable
by such Lender or such Issuing Bank hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender or such Issuing Bank to be
material, then the Borrower will pay to such Lender or such Issuing Bank, as the
case may be, upon demand such additional amount or amounts as will compensate
such Lender or such Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.
(b) If any Lender or any Issuing Bank shall have determined that the
adoption after the date hereof of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change after the date hereof in any
such law, rule, regulation, agreement or guideline (whether such law, rule,
regulation, agreement or guideline has been adopted) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Issuing Bank or any Lender's or any
Issuing Bank's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any Governmental Authority
has or would have the effect of reducing the rate of return on such Lender's or
such Issuing Bank's capital or on the capital of such Lender's or such Issuing
Bank's holding company, if any, as a consequence of this Agreement or the Loans
made or participations in Letters of Credit purchased by such Lender pursuant
hereto or the
31
Letters of Credit issued by such Issuing Bank pursuant hereto to a level below
that which such Lender or such Issuing Bank or such Lender's or such Issuing
Bank's holding company could have achieved but for such applicability, adoption,
change or compliance (taking into consideration such Lender's or such Issuing
Bank's policies and the policies of such Lender's or such Issuing Bank's holding
company with respect to capital adequacy) by an amount deemed by such Lender or
such Issuing Bank to be material then from time to time the Borrower shall pay
to such Lender or such Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or such Issuing Bank or such Lender's
or such Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or an Issuing Bank setting forth in
reasonable detail the amount or amounts necessary to compensate such Lender or
such Issuing Bank or its holding company, as applicable, as specified in
paragraph (a) or (b) above shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or such
Issuing Bank the amount shown as due on any such certificate delivered by it
within 10 days after its receipt of the same.
(d) Failure or delay on the part of any Lender or any Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's or such Issuing Bank's right to demand such compensation. The
protection of this Section shall be available to each Lender and each Issuing
Bank regardless of any possible contention of the invalidity or inapplicability
of the law, rule, regulation, agreement, guideline or other change or condition
that shall have occurred or been imposed.
SECTION 2.15. Change in Legality. (a) Notwithstanding any other provision
of this Agreement, if, after the date hereof, any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such Lender
hereunder (or be continued for additional Interest Periods and ABR Loans
will not thereafter (for such duration) be converted into Eurodollar
Loans), whereupon any request for a Eurodollar Borrowing (or to convert an
ABR Borrowing to a Eurodollar Borrowing or to continue a Eurodollar
Borrowing for an additional Interest Period) shall, as to such Lender
only, be deemed a request for an ABR Loan (or a request to continue an ABR
Loan as such for an additional Interest Period or to convert a Eurodollar
Loan into an ABR Loan, as the case may be), unless such declaration shall
be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the effective
date of such notice as provided in paragraph (b) below.
32
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender against
any loss or expense that such Lender may sustain or incur as a consequence of
(a) any event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor, (ii) the conversion
of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day of
the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be made
by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice of
such Loan shall have been given by the Borrower hereunder (any of the events
referred to in this clause (a) being called a "Breakage Event") or (b) any
default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over
(ii) the amount of interest likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such Breakage Event for such
period. A certificate of any Lender setting forth in reasonable detail any
amount or amounts which such Lender is entitled to receive pursuant to this
Section 2.16 shall be delivered to the Borrower and shall be conclusive absent
manifest error.
SECTION 2.17. Pro Rata Treatment. Except as required under Section 2.15,
each Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Term Loan Commitments or the Revolving Credit Commitments and
each conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such Commitments
shall have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans). Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender's percentage of
such Borrowing to the next higher or lower whole dollar amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower or any other Loan Party, including pursuant to Section 9.06, or
pursuant to a secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of, such secured
claim,
33
received by such Lender under any applicable bankruptcy, insolvency or other
similar law or otherwise, or by any other means, obtain payment (voluntary or
involuntary) in respect of any Loan or Loans or L/C Disbursement as a result of
which the unpaid principal portion of its Term Loans and Revolving Loans and
participations in L/C Disbursements shall be proportionately less than the
unpaid principal portion of the Term Loans and Revolving Loans and
participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
promptly pay to such other Lender the purchase price for, a participation in the
Term Loans and Revolving Loans and L/C Exposure, as the case may be of such
other Lender, so that the aggregate unpaid principal amount of the Term Loans
and Revolving Loans and L/C Exposure and participations in Term Loans and
Revolving Loans and L/C Exposure held by each Lender shall be in the same
proportion to the aggregate unpaid principal amount of all Term Loans and
Revolving Loans and L/C Exposure then outstanding as the principal amount of its
Term Loans and Revolving Loans and L/C Exposure prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the principal amount
of all Term Loans and Revolving Loans and L/C Exposure outstanding prior to such
exercise of banker's lien, setoff or counterclaim or other event; provided,
however, that if any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.18 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding a participation in a
Term Loan or Revolving Loan or L/C Disbursement deemed to have been so purchased
may exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to the Borrower in
the amount of such participation.
SECTION 2.19. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Loan Document not later
than 12:00 (noon), New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Each such payment
(other than Issuing Bank Fees, which shall be paid directly to the applicable
Issuing Bank,) shall be made to the Administrative Agent at its offices at 00
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx and shall thereafter be promptly paid by the
Administrative Agent to the Lenders.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Busi ness Day
(except as provided elsewhere in this Agreement), and such extension of time
shall in such case be included in the computation of interest or Fees, if
applicable.
SECTION 2.20. Taxes. (a) Any and all payments by or on behalf of the
Borrower or any Loan Party hereunder and under any other Loan Document shall be
made, in accordance with Section 2.19, free and clear of and without deduction
for any and all current or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding (i) income
taxes imposed on the net income of the Administrative Agent, any Lender or any
Issuing Bank (or any transferee or assignee thereof, including a participation
holder (any such entity a "Transferee")) and (ii) franchise taxes imposed on the
net income of the Administrative Agent, any
34
Lender or any Issuing Bank (or Transferee), in each case by the jurisdiction
under the laws of which the Administrative Agent, such Lender or such Issuing
Bank (or Transferee) is organized or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities, collectively or individually, being called "Taxes"). If the
Borrower or any Loan Party shall be required to deduct any Taxes from or in
respect of any sum payable hereunder or under any other Loan Document to the
Administrative Agent, any Lender or any Issuing Bank (or any Transferee), (i)
the sum payable shall be increased by the amount (an "additional amount")
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.20) the
Administrative Agent, such Lender or such Issuing Bank (or Transferee), as the
case may be, shall receive an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower or such Loan Party shall make
such deductions and (iii) the Borrower or such Loan Party shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay to the relevant Governmental
Authority in accordance with applicable law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies (including, without limitation, mortgage recording taxes and similar
fees) that arise from any payment made hereunder or under any other Loan
Document or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any other Loan Document ("Other Taxes").
(c) The Borrower will indemnify the Administrative Agent, each Lender and
each Issuing Bank (or Transferee) for the full amount of Taxes and Other Taxes
paid by the Administrative Agent, such Lender or such Issuing Bank (or
Transferee), as the case may be, and any liability (including penalties,
interest and expenses (including reasonable attorney's fees and expenses))
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability prepared by the
Administrative Agent, a Lender or an Issuing Bank (or Transferee), or the
Administrative Agent on its behalf, absent manifest error, shall be final,
conclusive and binding for all purposes. Such indemnification shall be made
within 30 days after the date the Administrative Agent, any Lender or any
Issuing Bank (or Transferee), as the case may be, makes written demand therefor.
(d) As soon as practicable after the date of any payment of Taxes or Other
Taxes by the Borrower or any other Loan Party to the relevant Governmental
Authority, the Borrower or such other Loan Party will deliver to the
Administrative Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing payment thereof.
(e) Each Lender (or Transferee) that is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (a "Non-U.S. Lender") shall deliver to the Borrower and the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a
Form W-8, a certificate representing that such Non-U.S. Lender is
35
not a bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption from, or
reduced rate of, U.S. Federal withholding tax on payments by the Borrower under
this Agreement and the other Loan Documents. Such forms shall be delivered by
each Non-U.S. Lender on or before the date it becomes a party to this Agreement
(or, in the case of a Transferee that is a participation holder, on or before
the date such participation holder becomes a Transferee hereunder) and on or
before the date, if any, such Non-U.S. Lender changes its applicable lending
office by designating a different lending office (a "New Lending Office"). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Notwithstanding any other provision of this Section 2.20(e), a Non-U.S.
Lender shall not be required to deliver any form pursuant to this Section
2.20(e) that such Non-U.S. Lender is not legally able to deliver.
(f) The Borrower shall not be required to indemnify any Non-U.S. Lender or
to pay any additional amounts to any Non-U.S. Lender, in respect of United
States Federal withholding tax pursuant to paragraph (a) or (c) above to the
extent that (i) the obligation to withhold amounts with respect to United States
Federal withholding tax existed on the date such Non-U.S. Lender became a party
to this Agreement (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date such Non-U.S. Lender
designated such New Lending Office with respect to a Loan; provided, however,
that this paragraph (f) shall not apply (x) to any Transferee or New Lending
Office that becomes a Transferee or New Lending Office as a result of an
assignment, participation, transfer or designation made at the request of the
Borrower and (y) to the extent the indemnity payment or additional amounts any
Transferee, or any Lender (or Transferee), acting through a New Lending Office,
would be entitled to receive (without regard to this paragraph (f)) do not
exceed the indemnity payment or additional amounts that the person making the
assignment, participation or transfer to such Transferee, or Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of paragraph (e) above. All indemnification payments that are payable
to or on behalf of a Transferee that is a Participant are subject to Section
9.04(f)(iii).
(g) Nothing contained in this Section 2.20 shall require any Lender or any
Issuing Bank (or any Transferee) or the Administrative Agent to make available
any of its tax returns (or any other information that it deems to be
confidential or proprietary).
(h) If the Administrative Agent or any Lender (or Transferee) receives a
refund in respect of any Taxes or other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.20, it shall within 30 days from
the date of such receipt pay over such refund to the Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section 2.20 with respect to the Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Administrative Agent or
such Lender (or Transferee) and without interest; provided, however, that
36
the Borrower, promptly following the request of the Administrative Agent or such
Lender (or Transferee), agrees to repay on an after-tax basis any amount paid
over to the Borrower (plus penalties, interest or other charges imposed by the
relevant Government Authority) to the Administrative Agent or such Lender in the
event the Administrative Agent or such Lender (or Transferee) is required to
repay such refund to such Governmental Authority.
SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty
to Mitigate. (a) In the event (i) any Lender or any Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or
any Issuing Bank delivers a notice described in Section 2.15 or (iii) the
Borrower is required to pay any additional amount to any Lender or any Issuing
Bank or any Governmental Authority on account of any Lender or any Issuing Bank
pursuant to Section 2.20, the Borrower may, at its sole expense and effort
(including with respect to the processing and recordation fee referred to in
Section 9.04(b)), upon notice to such Lender or such Issuing Bank and the
Administrative Agent, require such Lender or such Issuing Bank to transfer and
assign, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all of its interests, rights and obligations under
this Agreement to an assignee that shall assume such assigned obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (x) such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority having jurisdiction, (y) the
Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Revolving Credit Commitment is being assigned, of the Issuing
Banks), which consent shall not unreasonably be withheld, and (z) the Borrower
or such assignee shall have paid to the affected Lender or the affected Issuing
Bank in immediately available funds an amount equal to the sum of the principal
of and interest accrued to the date of such payment on the outstanding Loans or
L/C Disbursements of such Lender or such Issuing Bank, respectively, plus all
Fees and other amounts accrued for the account of such Lender or such Issuing
Bank hereunder (including any amounts under Section 2.14 and Section 2.16);
provided further that, if prior to any such transfer and assignment the
circumstances or event that resulted in such Lender's or such Issuing Bank's
claim for compensation under Section 2.14 or notice under Section 2.15 or the
amounts paid pursuant to Section 2.20, as the case may be, cease to cause such
Lender or such Issuing Bank to suffer increased costs or reductions in amounts
received or receivable or reduction in return on capital, or cease to have the
consequences specified in Section 2.15, or cease to result in amounts being
payable under Section 2.20, as the case may be (including as a result of any
action taken by such Lender or such Issuing Bank pursuant to paragraph (b)
below), or if such Lender or such Issuing Bank shall waive its right to claim
further compensation under Section 2.14 in respect of such circumstances or
event or shall withdraw its notice under Section 2.15 or shall waive its right
to further payments under Section 2.20 in respect of such circumstances or
event, as the case may be, then such Lender or such Issuing Bank shall not
thereafter be required to make any such transfer and assignment hereunder.
(b) If (i) any Lender or any Issuing Bank shall request compensation under
Section 2.14, (ii) any Lender or any Issuing Bank delivers a notice described in
Section 2.15 or (iii) the Borrower is required to pay any additional amount to
any Lender or any Issuing Bank or any Governmental Authority on account of any
Lender or any Issuing Bank, pursuant to Section 2.20, then such Lender or such
Issuing Bank shall use reasonable efforts (which shall not require such Lender
or such Issuing Bank to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action
37
inconsistent with its internal policies or legal or regulatory restrictions or
suffer any disadvantage or burden deemed by it to be significant) (x) to file
any certificate or document reasonably requested in writing by the Borrower or
(y) to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or affiliates, if such filing or assignment
would reduce its claims for compensation under Section 2.14 or enable it to
withdraw its notice pursuant to Section 2.15 or would reduce amounts payable
pursuant to Section 2.20, as the case may be, in the future. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender or any
Issuing Bank in connection with any such filing or assignment, delegation and
transfer.
SECTION 2.22. Letters of Credit. (a) General. The Borrower may request the
issuance of a Letter of Credit for its own account, in a form reasonably
acceptable to the Administrative Agent and the applicable Issuing Bank, at any
time and from time to time while the Revolving Credit Commitments remain in
effect. This Section shall not be construed to impose an obligation upon any
Issuing Bank to issue any Letter of Credit that is inconsistent with the terms
and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
In order to request the issuance of a Letter of Credit (or to amend, renew or
extend an existing Letter of Credit), the Borrower shall deliver or telecopy to
the applicable Issuing Bank and the Administrative Agent (at least three
Business Days in advance of the requested date of issuance, amendment, renewal
or extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, the date of
issuance, amendment, renewal or extension, the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) below), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare such Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if, and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that, after giving effect to such
issuance, amendment, renewal or extension (A) the L/C Exposure shall not exceed
$16,000,000 and (B) the Aggregate Revolving Credit Exposure shall not exceed the
Total Revolving Credit Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five Business Days prior to the
Maturity Date, unless such Letter of Credit expires by its terms on an earlier
date; provided, however, that any Letter of Credit issued to support obligations
pursuant to the Bond Documents, including any Existing Letter of Credit, may
expire on any date on or prior to September 30, 2002.
(d) Participations. By the issuance of a Letter of Credit and without any
further action on the part of any Issuing Bank or the Lenders, each Issuing Bank
hereby grants to each Revolving Credit Lender, and each such Lender hereby
acquires from the applicable Issuing Bank, a participation in such Letter of
Credit equal to such Lender's Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit, effective upon the issuance
of such Letter of Credit. In addition, Xxxxxx hereby grants to each Revolving
Credit Lender, and each Revolving Credit Lender hereby acquires from Xxxxxx, a
participation in each Existing Letter of Credit equal to such Lender's
Applicable Percentage of the aggregate amount available to be drawn under such
Existing Letter of Credit, effective as of the Closing Date; provided that such
participations shall cease on the date that
38
is five Business Days prior to the Maturity Date unless there shall have
occurred a drawing under such Letter of Credit on or prior to such date. In
consideration and in furtherance of the foregoing, each Revolving Credit Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of the applicable Issuing Bank, such Lender's Applicable
Percentage of each L/C Disbursement made by such Issuing Bank and not reimbursed
by the Borrower (or, if applicable, another party pursuant to its obligations
under any other Loan Document) forthwith on the date due as provided in Section
2.02(f). Each Revolving Credit Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or an Event of Default, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If any Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit, the Borrower shall pay to the Administrative
Agent an amount equal to such L/C Disbursement not later than two hours after
the Borrower shall have received notice from such Issuing Bank that payment of
such draft will be made, or, if the Borrower shall have received such notice
later than 10:00 a.m., New York City time, on any Business Day, not later than
10:00 a.m., New York City time, on the immediately following Business Day.
(f) Obligations Absolute. The Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit
or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated
with, the Borrower, any Subsidiary or other Affiliate thereof or any other
person may at any time have against the beneficiary under any Letter of
Credit, any Issuing Bank, the Administrative Agent or any Lender or any
other person, whether in connection with this Agreement, any other Loan
Document or any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a 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;
(v) payment by any Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of any
Issuing Bank, the Lenders, the Administrative Agent or any other person or
any other event or circumstance
39
whatsoever, whether or not similar to any of the foregoing, that might,
but for the provisions of this Section, constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of any Issuing Bank. However, the
foregoing shall not be construed to excuse any Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
such Issuing Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that each Issuing Bank may, subject to the
standard of gross negligence or willful misconduct set forth in this sentence,
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, in making any payment under any Letter of
Credit (i) such Issuing Bank's exclusive reliance on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute wilful misconduct or gross negligence of
such Issuing Bank.
(g) Disbursement Procedures. Each Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. Each Issuing Bank shall as promptly as
possible give telephonic notification, confirmed by telecopy, to the
Administrative Agent and the Borrower of such demand for payment and whether
such Issuing Bank has made or will make an L/C Disbursement thereunder; provided
that any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse such Issuing Bank and the Revolving
Credit Lenders with respect to any such L/C Disbursement. The Administrative
Agent shall promptly give each Revolving Credit Lender notice thereof.
(h) Interim Interest. If any Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, then, unless the Borrower shall reimburse such
L/C Disbursement in full on such date, the unpaid amount thereof shall bear
interest for the account of such Issuing Bank, for each day from and including
the date of such L/C Disbursement, to but excluding the earlier of the date of
payment by the Borrower or the date on which interest shall commence to accrue
thereon as provided in Section 2.02(f), at the rate per annum that would apply
to such amount if such amount were an ABR Loan.
(i) Resignation or Removal of the Issuing Bank. Each Issuing Bank may
resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrower,
40
and may be removed at any time by the Borrower by notice to such Issuing
Bank, the Administrative Agent and the Lenders. Subject to the next
succeeding paragraph, upon the acceptance of any appointment as an Issuing
Bank hereunder by a Lender that shall agree to serve as successor Issuing
Bank, such successor shall succeed to and become vested with all the
interests, rights and obligations of the retiring Issuing Bank and the
retiring Issuing Bank shall be discharged from its obligations to issue
additional Letters of Credit hereunder. At the time such removal or
resignation shall become effective, the Borrower shall pay all accrued and
unpaid fees pursuant to Section 2.05(c)(ii). The acceptance of any
appointment as an Issuing Bank hereunder by a successor Lender shall be
evidenced by an agreement entered into by such successor, in a form
satisfactory to the Borrower and the Administrative Agent, and, from and
after the effective date of such agreement, (i) such successor Lender
shall have all the rights and obligations of the previous Issuing Bank
under this Agreement and the other Loan Documents and (ii) references
herein and in the other Loan Documents to the term "Issuing Bank" shall be
deemed to refer to such successor or to any previous Issuing Bank, or to
such successor and all previous Issuing Banks, as the context shall
require. After the resignation or removal of any Issuing Bank hereunder,
the retiring Issuing Bank shall remain a party hereto and shall continue
to have all the rights and obligations of an Issuing Bank under this
Agreement and the other Loan Documents with respect to Letters of Credit
issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent, any Issuing Bank with outstanding Letters of Credit or the
Required Lenders (or, if the maturity of the Loans has been accelerated,
Revolving Credit Lenders holding participations in outstanding Letters of Credit
representing greater than 50% of the aggregate undrawn amount of all outstanding
Letters of Credit) thereof and of the amount to be deposited, deposit in an
account with the Collateral Agent, for the benefit of the Revolving Credit
Lenders, an amount in cash equal to the L/C Exposure as of such date. In
addition, the Borrower may deposit an amount in cash equal to 100% of the L/C
Exposure to cash collateralize Letters of Credit at any time. Any such deposit
shall be held by the Collateral Agent as collateral for the payment and
performance of the Obligations. The Collateral Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such deposits in
Permitted Investments, which investments shall be made at the option and sole
discretion of the Collateral Agent, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall (i) automatically be applied by the
Administrative Agent to reimburse the applicable Issuing Bank for L/C
Disbursements for which it has not been reimbursed, (ii) be held for the
satisfaction of the reimbursement obligations of the Borrower for the L/C
Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of each Issuing Bank with any
outstanding Letter of Credit and the Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit), be applied
to satisfy the Obligations; provided, however, that if (A) there are no
outstanding Letters of Credit (other than the Existing Letter of Credit), (B)
there are no L/C Disbursements that have not been reimbursed, (c) the
commitments of the Issuing Banks (other than Xxxxxx) and the Lenders pursuant to
this Section 2.22 (including paragraph (d) of this Section 2.22) shall have
terminated and (d) the Existing Letter of Credit shall remain outstanding, the
Collateral Agent shall turn over all moneys in such account to the Issuing Bank
with respect to the Existing Letter of Credit, to be held in an account with
such Issuing Bank as cash collateral for
41
the Existing Letter of Credit. If the Borrower is required to provide an amount
of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three Business Days after all Events of Default have been
cured or waived.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Administrative Agent, the
Collateral Agent, each Issuing Bank and each of the Lenders that:
SECTION 3.01. Organization; Powers. The Borrower and each of the
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, (c) is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect, and (d) has the
corporate power and authority to execute, deliver and perform its obligations
under each of the Loan Documents and each other agreement or instrument
contemplated hereby to which it is or will be a party and, in the case of the
Borrower, to borrow hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance by
each Loan Party of each of the Loan Documents and the borrowings hereunder and
the consummation of the Recapitalization, the financing therefor and the other
transactions contemplated by the Recapitalization Agreement (collectively, the
"Transactions") as of the Closing Date (in the case of the Recapitalization) and
at all times (in all other cases) (a) have been duly authorized by all requisite
corporate and, if required, stockholder action and (b) will not (i) violate any
provision of the certificate or articles of incorporation or other constitutive
documents or by-laws of the Borrower or any Subsidiary, (ii) violate in any
material respect (A) any material provision of material law, statute, rule or
regulation, or (B) any material order of any Governmental Authority or (C) any
material provision of any indenture, agreement or other instrument to which the
Borrower or any Subsidiary is a party or by which any of them or any of their
property is or may be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under, or
give rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any such indenture, agreement or other
instrument or (iii) result in the creation or imposition of any Lien upon or
with respect to any property or assets now owned or hereafter acquired by the
Borrower or any Subsidiary (other than any Lien created hereunder or under the
Security Documents).
SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by the each Loan Party thereto will constitute, a legal,
valid and binding obligation of such Loan Party enforceable against such Loan
Party in accordance with its terms.
42
SECTION 3.04. Governmental Approvals. As of the Closing Date, in the case
of the Recapitalization, and at all times, in the case of the other
Transactions, no action, consent or approval of, registration or filing with or
any other action by any Governmental Authority is or will be required in
connection with the Transactions, except for (a) the filing of Uniform
Commercial Code financing statements and filings with the United States Patent
and Trademark Office and the United States Copyright Office, (b) recordation of
the Mortgages and (c) such as have been made or obtained and are in full force
and effect.
SECTION 3.05. Financial Statements. (a) The Borrower has heretofore
furnished to the Lenders its consolidated and consolidating balance sheets and
statements of income and stockholders' equity and consolidated cash flows as of
and for the 1996 and 1997 Fiscal Years, audited by and accompanied by the
opinion of Ernst & Young LLP, independent public accountants. Such financial
statements present fairly the financial condition and results of operations and
cash flows of the Borrower and its consolidated Subsidiaries as of such dates
and for such periods. Such balance sheets and the notes thereto disclose all
material liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the dates thereof. Such financial statements were prepared in
accordance with GAAP applied on a consistent basis (except as provided in such
March 29, 1997 financial statements).
(b) The Borrower has heretofore delivered to the Lenders its unaudited pro
forma consolidated balance sheet and statements of income, stockholders' equity
and cash flows as of and for the 1997 Fiscal Year, prepared giving effect to the
Recapitalization as if it had occurred on such date. Such pro forma balance
sheet and other financial statements have been prepared in good faith by the
Borrower, based on the assumptions used to prepare the pro forma financial
information contained in the Confidential Information Memorandum (which
assumptions are believed by the Borrower on the date hereof and on the Closing
Date to be reasonable), are based on the best information available to the
Borrower as of the date of delivery thereof, accurately reflects all adjustments
required to be made to give effect to the Recapitalization and presents fairly
on a pro forma basis the estimated consolidated financial position of the
Borrower and its consolidated Subsidiaries as of such date, assuming that the
Recapitalization had actually occurred at such date.
SECTION 3.06. No Material Adverse Change. Except as disclosed in writing
to the Lenders prior to the date hereof, there has been no material adverse
change in the business, assets, operations, prospects, condition, financial or
otherwise, or material agreements of the Borrower and the Subsidiaries, taken as
a whole, since March 29, 1997.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of
the Borrower and the Subsidiaries has good and marketable title to, or valid
leasehold interests in, all its material properties and assets (including all
Mortgaged Property), except for minor defects in title that do not interfere
with its ability to conduct its business as currently conducted or to utilize
such properties and assets for their intended purposes. All such material
properties and assets are free and clear of Liens, other than Liens expressly
permitted by Section 6.02.
(b) Each of the Borrower and the Subsidiaries has complied in all material
respects with all obligations under all material leases to which it is a party
and all such leases are in full force and
43
effect. Each of the Borrower and the Subsidiaries enjoys peaceful and
undisturbed possession under all such material leases.
(c) The Borrower has not received any notice of, nor has any knowledge of,
any pending or contemplated condemnation proceeding affecting the Mortgaged
Properties or any sale or disposition thereof in lieu of condemnation, other
than any such notice delivered or knowledge disclosed to the Lenders.
(d) Neither the Borrower nor any of the Subsidiaries is obligated under
any right of first refusal, option or other contractual right to sell, assign or
otherwise dispose of any Mortgaged Property or any interest therein.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing
Date a list of all Subsidiaries and the percentage ownership interest of the
Borrower therein. The shares of capital stock or other ownership interests so
indicated on Schedule 3.08 are fully paid and non-assessable and are owned by
the Borrower, directly or indirectly, free and clear of all Liens.
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth on
Schedule 3.09, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against or affecting Holdings, the
Borrower or any Subsidiary or any business, property or rights of any such
person (i) that purport to affect the legality, validity or enforceability of
any Loan Document or the Transactions as of the Closing Date, in the case of the
Recapitalization, and at all times, in the case of the other Transactions (other
than, in the case of any Mortgage, any condemnation proceeding) or (ii) as to
which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries or any of their
respective material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting the Mortgaged Property, or is in
default with respect to any judgment, writ, injunction, decree or order of any
Governmental Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.
(c) Certificates of occupancy and permits are in effect for each Mortgaged
Property as currently constructed, and true and complete copies of such
certificates of occupancy have been delivered to the Collateral Agent as
mortgagee with respect to each Mortgaged Property.
SECTION 3.10. Agreements. None of Holdings, the Borrower or any of the
Subsidiaries is in default in any manner under any provision of any indenture or
other agreement or instrument evidencing Indebtedness, or any other material
agreement or instrument to which it is a party or by which it or any of its
properties or assets are or may be bound, where such default could reasonably be
expected to result in a Material Adverse Effect.
44
SECTION 3.11. Federal Reserve Regulations. (a) Neither the Borrower nor
any of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation G, T,
U or X.
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act.
Neither the Borrower nor any Subsidiary is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of the
Loans and will request the issuance of Letters of Credit only for the purposes
specified in the preamble to this Agreement.
SECTION 3.14. Tax Returns. Each of Holdings, the Borrower and the
Subsidiaries has filed or caused to be filed all material Federal, state, local
and foreign tax returns or materials required to have been filed by it and has
paid or caused to be paid all taxes due and payable by it and all assessments
received by it, except taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, shall have set aside on its books adequate reserves.
SECTION 3.15. No Material Misstatements. None of (a) the Confidential
Information Memorandum or (b) any other written information, report, financial
statement, exhibit or Schedule furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto contained,
contains or will contain (when taken as a whole) any material misstatement of
fact or omitted, omits or will omit (when taken as a whole) to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading;
provided that to the extent any such information, report, financial statement,
exhibit or Schedule was based upon or constitutes a forecast or projection, the
Borrower 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.
SECTION 3.16. Employee Benefit Plans. Each of the Borrower and its ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. Except as set forth in Schedule 3.16, no ERISA Event
has occurred or is reasonably expected to occur that, when taken together with
all other such ERISA Events, could reasonably be expected to result in material
liability of the Borrower or any of its ERISA Affiliates. The present value of
all benefit liabilities under each Plan (based on those assumptions used to fund
such Plan) did not, as of the last annual valuation date applicable thereto,
exceed by more than $197,324 the fair market value of the assets of such Plan,
and the present value of all benefit liabilities of all underfunded Plans (based
on those assumptions used to fund each such
45
Plan) did not, as of the last annual valuation dates applicable thereto, exceed
by more than $273,029 the fair market value of the assets of all such
underfunded Plans.
SECTION 3.17. Environmental Matters. Except as set forth in Schedule 3.17:
(a) The properties owned or operated by the Borrower and the Subsidiaries
(the "Properties") do not contain any Hazardous Materials in amounts or
concentrations which (i) constitute, or constituted a violation of, (ii) require
Remedial Action under, or (iii) could give rise to liability under,
Environmental Laws, which violations, Remedial Actions and liabilities, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;
(b) The Properties and all operations of the Borrower and the Subsidiaries
are in compliance, and in the last five years have been in compliance, with all
Environmental Laws and all necessary Environmental Permits have been obtained
and are in effect, except to the extent that such non-compliance or failure to
obtain any necessary permits, in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect;
(c) There have been no Releases or threatened Releases at, from, under or
proximate to the Properties or otherwise in connection with the operations of
Holdings, the Borrower or the Subsidiaries, which Releases or threatened
Releases, in the aggregate, could reasonably be expected to result in a Material
Adverse Effect;
(d) Neither the Borrower nor any of the Subsidiaries has received any
notice of an Environmental Claim in connection with the Properties or the
operations of the Borrower or the Subsidiaries or with regard to any person
whose liabilities for environmental matters Holdings, the Borrower or the
Subsidiaries has retained or assumed, in whole or in part, contractually, by
operation of law or otherwise, which, in the aggregate, could reasonably be
expected to result in a Material Adverse Effect, nor do the Borrower or the
Subsidiaries have reason to believe that any such notice will be received or is
being threatened; and
(e) Hazardous Materials have not been transported from the Properties, nor
have Hazardous Materials been generated, treated, stored or disposed of at, on
or under any of the Properties in a manner that could give rise to liability
under any Environmental Law, nor have the Borrower or the Subsidiaries retained
or assumed any liability, contractually, by operation of law or otherwise, with
respect to the generation, treatment, storage or disposal of Hazardous
Materials, which transportation, generation, treatment, storage or disposal, or
retained or assumed liabilities, in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.
SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by the Borrower or by the
Borrower for its Subsidiaries as of the Closing Date. As of such date, such
insurance is in full force and effect and all premiums have been duly paid. The
Borrower and the Subsidiaries have insurance in such amounts and covering such
risks and liabilities as are in accordance with normal industry practice.
SECTION 3.19. Security Documents. (a) The Pledge Agreement is effective to
create in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable
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security interest in the Collateral (as defined in the Pledge Agreement) and,
when the Collateral is delivered to (and continue to remain in the possession
of) the Collateral Agent, the Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title and
interest of the pledgors thereunder in such Collateral, in each case prior and
superior in right to any other person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the Security
Agreement) and, when financing statements in appropriate form are filed in the
offices specified on Schedule 6 to the Perfection Certificate, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such Collateral
(other than the Intellectual Property, as defined in the Security Agreement), in
each case prior and superior in right to any other person, other than with
respect to Liens expressly permitted by Section 6.02.
(c) When the Security Agreement is filed in the United States Patent and
Trademark Office and the United States Copyright Office, the Security Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the grantors thereunder in the Intellectual Property (as
defined in the Security Agreement), in each case prior and superior in right to
any other person (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a lien on registered trademarks, trademark applications and
copyrights acquired by the grantors after the date hereof).
(d) The Mortgages are effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable Lien on all of the Loan Parties' right, title and interest in and to
the Mortgaged Property thereunder and the proceeds thereof, and when the
Mortgages are filed in the offices specified on Schedule 3.19(d), the Mortgages
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Mortgaged Property and the
proceeds thereof, in each case prior and superior in right to any other person,
other than with respect to the rights of persons pursuant to Liens expressly
permitted by Section 6.02.
SECTION 3.20. Location of Real Property and Leased Premises. (a) Schedule
3.20(a) lists completely and correctly as of the Closing Date all real property
owned by the Borrower and the Subsidiaries and the addresses thereof. The
Borrower and the Subsidiaries own in fee all the real property set forth on
Schedule 3.20(a).
(b) Schedule 3.20(b) lists completely and correctly as of the Closing Date
all real property leased by the Borrower and the Subsidiaries and the addresses
thereof. The Borrower and the Subsidiaries have valid leases in all the real
property set forth on Schedule 3.20(b).
SECTION 3.21. Labor Matters. As of the Closing Date, there are no strikes,
lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the
knowledge of the Borrower, threatened. The hours worked by and payments made to
employees of the Borrower and the Subsidiaries have not been in violation of the
Fair Labor Standards Act or any other applicable Federal, state, local or
foreign law, dealing with such matters. All payments due from the Borrower
47
or any Subsidiary, or for which any claim may be made against the Borrower or
any Subsidiary, on account of wages and employee health and welfare insurance
and other benefits, have been paid or accrued as a liability on the books of the
Borrower or such Subsidiary. The consummation of the Transactions will not give
rise to any right of termination or right of renegotiation on the part of any
union under any collective bargaining agreement to which the Borrower or any
Subsidiary is bound.
SECTION 3.22. Solvency. (a) Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan made on the Closing Date and after giving effect to the application
of the proceeds of such Loans, to the savings provisions contained in Section 1
of the Guarantee Agreement and to all rights of indemnity, reimbursement,
contribution and subrogation of each Loan Party (including under the Indemnity,
Subrogation and Contribution Agreement), (i) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (ii) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans and of each Issuing Bank to
issue or continue Letters of Credit hereunder are subject to the satisfaction of
the following conditions:
SECTION 4.01. All Credit Events. On the date of each Borrowing, including
on the date of each issuance of a Letter of Credit (each such event being called
a "Credit Event"), but excluding any continuation or conversion of the Interest
Period with respect to any Borrowing that does not result in an increase in the
aggregate principal amount of Loans outstanding of any Lender:
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 (or such notice shall have been deemed
given in accordance with Section 2.03) or, in the case of the issuance of a
Letter of Credit, the applicable Issuing Bank and the Administrative Agent shall
have received a notice requesting the issuance of such Letter of Credit as
required by Section 2.22(b).
(b) The representations and warranties set forth in Article III hereof
shall be true and correct in all material respects on and as of the date of such
Credit Event with the same effect as though made on and as of such date, except
to the extent such representations and warranties expressly relate to an earlier
date.
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(c) The Borrower and each other Loan Party shall be in compliance with all
the terms and provisions set forth herein and in each other Loan Document on its
part to be observed or performed, and at the time of and immediately after such
Credit Event, no Event of Default or Default shall have occurred and be
continuing.
Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower on the date of such Credit Event as to the matters
specified in paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. First Credit Event. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of itself, the
Lenders and the Issuing Banks, a favorable written opinion of (i) XxXxxxxxx,
Will & Xxxxx, counsel for the Borrower, substantially to the effect set forth in
Exhibit J-1, and (ii) each local counsel listed on Schedule 4.02(a),
substantially to the effect set forth in Exhibit J-2, in each case (a) dated the
Closing Date, (b) addressed to the Issuing Banks, the Administrative Agent and
the Lenders, and (c) covering such other matters relating to the Loan Documents
and the Transactions as the Administrative Agent shall reasonably request, and
the Borrower hereby requests such counsel to deliver such opinions.
(b) All legal matters incident to this Agreement, the Borrowings and
extensions of credit hereunder and the other Loan Documents shall be
satisfactory to the Lenders, to the Issuing Banks and to Cravath, Swaine &
Xxxxx, counsel for the Administrative Agent.
(c) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation, including all amendments thereto, of
each Loan Party, certified as of a recent date by the Secretary of State of the
state of its organization, and a certificate as to the good standing of each
Loan Party as of a recent date, from such Secretary of State; (ii) a certificate
of the Secretary or Assistant Secretary of each Loan Party dated the Closing
Date and certifying (A) that attached thereto is a true and complete copy of the
by-laws of such Loan Party as in effect on the Closing Date and at all times
since a date prior to the date of the resolutions described in clause (b) below,
(B) that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such Loan Party authorizing the execution,
delivery and performance of the Loan Documents to which such person is a party
and, in the case of the Borrower, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full force
and effect, (C) that the certificate or articles of incorporation of such Loan
Party have not been amended since the date of the last amendment thereto shown
on the certificate of good standing furnished pursuant to clause (i) above, and
(D) as to the incumbency and specimen signature of each officer executing any
Loan Document or any other document delivered in connection herewith on behalf
of such Loan Party; (iii) a certificate of another officer as to the incumbency
and specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as the
Lenders, the Issuing Banks or Cravath, Swaine & Xxxxx, counsel for the
Administrative Agent, may reasonably request.
(d) The Administrative Agent shall have received a certificate, dated the
Closing Date and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and (c) of
Section 4.01.
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(e) The Administrative Agent shall have received all Fees and other
amounts due and payable on or prior to the Closing Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder or under any other Loan
Document.
(f) The Pledge Agreement shall have been duly executed by the parties
thereto and delivered to the Collateral Agent and shall be in full force and
effect, and all the outstanding capital stock of the Subsidiaries shall have
been duly and validly pledged thereunder to the Collateral Agent for the ratable
benefit of the Secured Parties and certificates representing such shares,
accompanied by instruments of transfer and stock powers endorsed in blank, shall
be in the actual possession of the Collateral Agent; provided that to the extent
to do so would cause adverse tax consequences to the Borrower, (i) neither the
Borrower nor any Domestic Subsidiary shall be required to pledge more than 65%
of the capital stock of any Foreign Subsidiary and (ii) no Foreign Subsidiary
shall be required to pledge the capital stock of any of its Foreign
Subsidiaries.
(g) The Security Agreement shall have been duly executed by the Loan
Parties party thereto and shall have been delivered to the Collateral Agent and
shall be in full force and effect on such date and each document (including each
Uniform Commercial Code financing statement) required by law or reasonably
requested by the Administrative Agent to be filed, registered or recorded in
order to create in favor of the Collateral Agent for the benefit of the Secured
Parties a valid, legal and perfected first-priority security interest in and
lien on the Collateral (subject to any Lien expressly permitted by Section 6.02)
described in such agreement shall have been delivered to the Collateral Agent.
(h) The Collateral Agent shall have received the results of a search of
the Uniform Commercial Code (or equivalent filings) filings made with respect to
the Loan Parties in the states (or other jurisdictions) in which the chief
executive office of each such person is located, any offices of such persons in
which records have been kept relating to Accounts and the other jurisdictions in
which Uniform Commercial Code filings (or equivalent filings) are to be made
pursuant to the preceding paragraph, together with copies of the financing
statements (or similar documents) disclosed by such search, and accompanied by
evidence satisfactory to the Collateral Agent that the Liens indicated in any
such financing statement (or similar document) would be permitted under Section
6.02 or have been released.
(i) The Collateral Agent shall have received a Perfection Certificate with
respect to the Loan Parties dated the Closing Date and duly executed by a
Responsible Officer of the Borrower.
(j)(i) Each of the Security Documents, in form and substance satisfactory
to the Lenders, relating to each of the Mortgaged Properties shall have been
duly executed by the parties thereto and delivered to the Collateral Agent and
shall be in full force and effect, (ii) each of such Mortgaged Properties shall
not be subject to any Lien other than those permitted under Section 6.02, (iii)
each of such Security Documents shall have been filed and recorded in the
recording office as specified on Schedule 3.19(d) (or a lender's title insurance
policy, in form and substance acceptable to the Collateral Agent, insuring such
Security Document as a first lien on such Mortgaged Property (subject to any
Lien permitted by Section 6.02) shall have been received by the Collateral
Agent) and, in connection therewith, the Collateral Agent shall have received
evidence satisfactory to it of each such filing and recordation and (iv) the
Collateral Agent shall have received such other documents,
50
including a policy or policies of title insurance issued by a nationally
recognized title insurance company, together with such endorsements, coinsurance
and reinsurance as may be requested by the Collateral Agent and the Lenders,
insuring the Mortgages as valid first liens on the Mortgaged Properties, free of
Liens other than those permitted under Section 6.02, together with such
abstracts, appraisals and legal opinions required to be furnished pursuant to
the terms of the Mortgages or as reasonably requested by the Collateral Agent or
the Lenders.
(k) The Guarantee Agreement shall have been duly executed by the parties
thereto, shall have been delivered to the Collateral Agent and shall be in full
force and effect.
(l) The Indemnity, Subrogation and Contribution Agreement shall have been
duly executed by the parties thereto, shall have been delivered to the
Collateral Agent and shall be in full force and effect.
(m) The Administrative Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies required by Section
5.02 and the applicable provisions of the Security Documents, each of which
shall be endorsed or otherwise amended to include a "standard" or "New York"
lender's loss payable endorsement and to name the Collateral Agent as additional
insured, in form and substance satisfactory to the Administrative Agent.
(n) The Lenders shall be satisfied as to the amount and nature of any
environmental and employee health and safety exposures to which the Borrower and
the Subsidiaries may be subject and the plans of the Borrower with respect
thereto.
(o) The Administrative Agent shall have received for each Mortgaged
Property the following:
(i) a copy of all material applications, licenses, permits and
authorizations which are necessary for the construction and operation of
the Mortgaged Property; and
(ii) one of the following: (A) a written confirmation from the
applicable zoning commission or other appropriate Governmental Authority
stating that each Mortgaged Property complies with existing land use and
zoning ordinances, regulations and restrictions applicable to such
Mortgaged Property or (B) a zoning endorsement satisfactory to the
Administrative Agent in connection with the Collateral Agent's mortgagee
title insurance policy of such Mortgaged Property.
(p) The Administrative Agent shall have received an environmental
assessment report in form, scope and substance reasonably satisfactory to the
Lenders, from Xxxx Xxxxxx Group, as to any environmental hazards, liabilities or
Remedial Action to which the Borrower or any of the Subsidiaries may be subject
and the Lenders shall be reasonably satisfied with the nature and cost of any
such hazards, liabilities or Remedial Action and with the Borrower's plans with
respect thereto.
(q) The Borrower shall have received gross proceeds from the issuance of
the Senior Subordinated Notes in the aggregate amount of not less than
$110,000,000, and there shall be no material change in the terms and conditions
of the Senior Subordinated Notes (including, without
51
limitation, the interest rate, maturity, covenants, subordination provisions and
events of default) from those disclosed to the Administrative Agent and the
Lenders prior to May 16, 1997.
(r) Holdings shall have received gross proceeds from the issuance of the
Discount Debentures in the aggregate amount of not less than $40,000,000 and
there shall be no material change in the terms and conditions of the Discount
Debentures (including, without limitation, the interest rate, maturity,
covenants and events of default) and of any attached warrants from those
disclosed to the Administrative Agent and the Lenders prior to May 16, 1997.
(s)(i) The Recapitalization shall have been consummated, or shall be
consummated simultaneously with the initial Credit Event, in accordance with
applicable law and the Recapitalization Agreement, without giving effect to any
material waiver or amendment of the Recapitalization Agreement not approved in
writing by the Lenders, and (ii) the Lenders shall (a) be reasonably satisfied
with the capitalization, structure and equity ownership of Holdings, the
Borrower and its Subsidiaries and (b) be reasonably satisfied that the aggregate
level of fees and expenses to be paid in connection with the Recapitalization,
the financing therefor and the other transactions contemplated hereby shall not
exceed $12,000,000.
(t)(i) After giving effect to the Recapitalization and the other
transactions contemplated hereby, Holdings, the Borrower and its Subsidiaries
shall have outstanding no Indebtedness or preferred stock other than (A) the
extensions of credit under this Agreement, (B) the Senior Subordinated Notes,
(C) the Discount Debentures, (D) the Indebtedness described in Section 6.01(i)
and (E) the Indebtedness listed on Schedule 6.01 and (ii) the Administrative
Agent shall have received evidence satisfactory to it that all Indebtedness
pursuant to the Existing Credit Agreement shall have been repaid in full (except
with respect to the Existing Letters of Credit), any commitments thereunder
shall have been terminated, all Liens with respect thereto shall have been
released (other than Liens securing obligations under the Existing Letters of
Credit) and the Existing Letters of Credit shall constitute all the letters of
credit issued and outstanding thereunder.
(u) The Lenders shall have received the consolidated financial statements
described in Section 3.05(a) and the pro forma consolidated financial statements
described in Section 3.05(b), which shall be reasonably satisfactory to the
Lenders and shall not be materially inconsistent with the preliminary financial
statements previously provided to the Lenders.
(v) The Lenders shall have received a solvency letter from Houlihan,
Lokey, Xxxxxx and Xxxxx, in form and substance reasonably satisfactory to the
Lenders, as to the solvency of the Borrower and its Subsidiaries on a
consolidated basis after giving effect to the Recapitalization, the initial
Credit Event and the consummation of the other Transactions.
(w) All requisite material Governmental Authorities and third parties
shall have approved or consented to the Recapitalization and the other
transactions contemplated hereby to the extent required, all applicable appeal
periods shall have expired and there shall be no governmental or judicial
action, actual or threatened, that has or could have a reasonable likelihood of
restraining, preventing or imposing burdensome conditions on the
Recapitalization or the other transactions contemplated hereby.
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ARTICLE V
Affirmative Covenants
The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document shall have been paid in full and all
Letters of Credit have been canceled or have expired (or the Collateral Agent
shall have received cash collateral therefor pursuant to Section 2.22(j)) and
all amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, the Borrower will, and will cause
each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except as otherwise expressly permitted under Section 6.05.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated; comply
in all material respects with all applicable laws, rules, regulations (including
any zoning, building, Environmental Law, ordinance, code or approval or any
building permits or any restrictions of record or agreements affecting the
Mortgaged Properties) and decrees and orders of any Governmental Authority,
whether now in effect or hereafter enacted; and at all times maintain and
preserve all property material to the conduct of such business and keep such
property in good repair, working order and condition and from time to time make,
or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times
except, in each case, to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.02. Insurance. (a) Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers; maintain such
other insurance, to such extent and against such risks, including fire and other
risks insured against by extended coverage, as is customary with companies in
the same or similar businesses operating in the same or similar locations,
including public liability insurance against claims for personal injury or death
or property damage occurring upon, in, about or in connection with the use of
any properties owned, occupied or controlled by it; and maintain such other
insurance as may be required by law.
(b) Cause all such policies to be endorsed or otherwise amended to include
a "standard" or "New York" lender's loss payable endorsement, in form and
substance satisfactory to the Administrative Agent and the Collateral Agent,
which endorsement shall provide that, from and after the Closing Date, if the
insurance carrier shall have received written notice from the Administrative
Agent or the Collateral Agent of the occurrence of an Event of Default, the
insurance carrier shall pay all proceeds otherwise payable to the Borrower or
the Loan Parties under such policies directly to the Collateral Agent; cause all
such policies to provide that neither the Borrower, the Administrative Agent,
the Collateral Agent nor any other party shall be a coinsurer thereunder and to
contain a
53
"Replacement Cost Endorsement" without any deduction for depreciation, and such
other provisions as the Administrative Agent or the Collateral Agent may
reasonably require from time to time to protect their interests; promptly
following a request therefor, deliver original or certified copies of all such
policies to the Collateral Agent; cause each such policy to provide that it
shall not be canceled, modified or not renewed (i) by reason of nonpayment of
premium upon not less than 10 days' prior written notice thereof by the insurer
to the Administrative Agent and the Collateral Agent (giving the Administrative
Agent and the Collateral Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason upon not less than 30 days' prior written
notice thereof by the insurer to the Administrative Agent and the Collateral
Agent; deliver to the Administrative Agent and the Collateral Agent, prior to
the cancelation, modification or nonrenewal of any such policy of insurance, a
copy of a renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Administrative Agent and the Collateral
Agent) together with evidence satisfactory to the Administrative Agent and the
Collateral Agent of payment of the premium therefor.
(c) If at any time the area in which the Premises (as defined in the
Mortgages) are located is designated (i) a "special flood hazard area" in any
Flood Insurance Rate Map published by the Federal Emergency Management Agency
(or any successor agency), obtain flood insurance in such total amount as the
Administrative Agent, the Collateral Agent or the Required Lenders may from time
to time require, and otherwise comply with the National Flood Insurance Program
as set forth in the Flood Disaster Protection Act of 1973, as it may be amended
from time to time, or (ii) a "Zone I" area, obtain earthquake insurance in such
total amount as the Administrative Agent, the Collateral Agent or the Required
Lenders may from time to time require.
(d) With respect to any Mortgaged Property, carry and maintain
comprehensive general liability insurance including the "broad form CGL
endorsement" and coverage on an occurrence basis against claims made for
personal injury (including bodily injury, death and property damage) and
umbrella liability insurance against any and all claims, in no event for a
combined single limit of less than that in effect on the Closing Date, naming
the Collateral Agent as an additional insured, on forms satisfactory to the
Collateral Agent.
(e) Notify the Administrative Agent and the Collateral Agent immediately
whenever any separate insurance concurrent in form or contributing in the event
of loss with that required to be maintained under this Section 5.02 is taken out
by the Borrower; and promptly deliver to the Administrative Agent and the
Collateral Agent a duplicate original copy of such policy or policies.
SECTION 5.03. Obligations and Taxes. Pay its obligations promptly and in
accordance with their terms and pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims for labor, materials and
supplies or otherwise that, if unpaid, could reasonably be expected to give rise
to a Lien upon such properties or any part thereof, provided, however, that such
payment and discharge shall not be required with respect to any such tax,
assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and the Borrower
shall have set aside on its books adequate reserves with respect thereto in
accordance with GAAP and such contest operates to suspend collection of the
contested obligation, tax, assessment or charge and enforcement of a Lien.
54
SECTION 5.04. Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each Fiscal Year, its
consolidated and consolidating balance sheets and related statements of
income and stockholders' equity and consolidated cash flows showing the
financial condition of the Borrower and its consolidated Subsidiaries as
of the close of such Fiscal Year and the results of its operations and the
operations of such Subsidiaries during such year, all audited by Ernst &
Young LLP or other independent public accountants of recognized national
standing acceptable to the Administrative Agent and accompanied by an
opinion of such accountants (which shall not be qualified in any material
respect) to the effect that such consolidated financial statements fairly
present the financial condition and results of operations of the Borrower
and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each Fiscal Year, its consolidated and consolidating balance
sheets and related statements of operations and stockholders' equity and
consolidated cash flows showing the financial condition of the Borrower
and its consolidated Subsidiaries as of the close of such fiscal quarter
and the results of its operations and the operations of such Subsidiaries
during such fiscal quarter and the then elapsed portion of the Fiscal
Year, all certified by one of its Financial Officers as fairly presenting
the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments;
(c) within 45 days after the end of each of the first two months of
each fiscal quarter, its consolidated and consolidating balance sheets and
related statements of operations and stockholders' equity and consolidated
cash flows showing the financial condition of the Borrower and its
consolidated Subsidiaries as of the close of such month and the results of
its operations and the operations of such Subsidiaries during such month
and the then elapsed portion of the Fiscal Year, all certified by one of
its Financial Officers as fairly presenting the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on
a consolidated basis in accordance with GAAP consistently applied, subject
to normal year-end audit adjustments;
(d) concurrently with any delivery of financial statements under
sub-paragraph (a) or (b) above, a letter of the accounting firm or
Financial Officer reporting on or certifying such statements (which
letter, when furnished by an accounting firm, may be limited to accounting
matters and disclaim responsibility for legal interpretations) (i)
reporting that they are unaware that any Event of Default has occurred, in
the case of the accounting firm, or certifying that no Event of Default or
Default has occurred, in the case of the Financial Officer, or, if such an
Event of Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with
respect thereto and (ii) in the case of any such letter from such
Financial Officer, setting forth reasonably detailed calculations
demonstrating compliance with Sections 6.11, 6.12, 6.13 and 6.14;
55
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Borrower or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be;
(f) prior to April 30 of each Fiscal Year, a copy of the budget for
its consolidated balance sheet and related statements of income and cash
flows for each quarter of such Fiscal Year; and
(g) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of the Borrower
or any Subsidiary, or compliance with the terms of any Loan Document, as
the Administrative Agent or any Lender may reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative
Agent, each Issuing Bank and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to be
taken with respect thereto;
(b) the filing or commencement of, or any written threat or notice
of intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against the Borrower or any Affiliate thereof that could
reasonably be expected to result in a Material Adverse Effect; and
(c) any development that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all material respects with
the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (i) as soon as possible after, and in any event within 10
days after any Responsible Officer of the Borrower or any ERISA Affiliate knows
or has reason to know that, any ERISA Event has occurred that, alone or together
with any other ERISA Event could reasonably be expected to result in liability
of the Borrower in an aggregate amount exceeding $2,500,000 or requiring
payments exceeding $2,500,000 in any year, a statement of a Financial Officer of
the Borrower setting forth details as to such ERISA Event and the action, if
any, that the Borrower proposes to take with respect thereto.
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.
Keep proper books of record and account in which full, true and correct entries
in conformity with GAAP and all material requirements of law are made of all
dealings and transactions in relation to its business and activities. Each Loan
Party will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender to visit
and inspect the financial records and the properties of the Borrower or any
Subsidiary at reasonable times and as often as reasonably requested (subject to
the proviso below) and to make extracts from and copies of such financial
records, and permit any representatives designated by the Administrative Agent
or any Lender to
56
discuss the affairs, finances and condition of the Borrower or any Subsidiary
with the officers thereof and independent accountants therefor ; provided that,
so long as no Default or Event of Default shall have occurred and be continuing,
the Administrative Agent or such Lender, as applicable, (a) shall not make any
such visits and inspections more than once per year and (b) shall give the
Borrower reasonable notice of any such discussions with accountants and shall
provide the Borrower with a reasonable opportunity to participate in such
discussions.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
SECTION 5.09. Compliance with Environmental Laws. Comply, and cause all
lessees and other persons occupying its Properties to comply, with all
Environmental Laws and Environmental Permits applicable to its operations and
Properties, except where the failure to do so could not reasonably be expected
to have a Material Adverse Effect; obtain and renew all Environmental Permits
necessary for its operations and Properties, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect; and conduct
any Remedial Action in accordance with Environmental Laws; provided, however,
that neither the Borrower nor any of the Subsidiaries shall be required to
undertake any Remedial Action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and appropriate reserves
are being maintained with respect to such circumstances.
SECTION 5.10. Preparation of Environmental Reports. If a Default caused by
reason of a breach of Section 3.17 or 5.09 shall have occurred and be
continuing, at the request of the Required Lenders through the Administrative
Agent, provide to the Lenders as soon as is reasonably practicable but in no
event later than 60 days after such request, at the expense of the Borrower, an
environmental site assessment report for the Properties which are the subject of
such default prepared by an environmental consulting firm acceptable to the
Administrative Agent and indicating the presence or absence of Hazardous
Materials and the estimated cost of any compliance or Remedial Action in
connection with such Properties.
SECTION 5.11. Further Assurances. (a) Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust) that may be required under applicable
law, or that the Required Lenders, the Administrative Agent or the Collateral
Agent may reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant, preserve, protect and
perfect the validity and first priority of the security interests created or
intended to be created by the Security Documents. In the event of any Permitted
Acquisition by the Borrower of any assets or business other than capital stock
of any corporation, in each case permitted pursuant to Section 6.04(c), the
Borrower will, at the time of such Permitted Acquisition, contribute such assets
or business to a Domestic Subsidiary. The Borrower will cause any subsequently
acquired or organized Domestic Subsidiary to execute a Subsidiary Guarantee
Agreement, Indemnity Subrogation and Contribution Agreement and each applicable
Security Document in favor of the Collateral Agent. In addition, from time to
time, the Borrower will, at its cost and expense, promptly secure the
Obligations by pledging or creating, or causing to be pledged or created,
perfected security interests with respect to such of its assets and properties
located in the United States as the Administrative Agent or the Required Lenders
shall reasonably designate (it
57
being understood that it is the intent of the parties that the Obligations shall
be secured by, among other things, substantially all the assets of the Borrower
(including real and other properties acquired subsequent to the Closing Date)
located in the United States). Such security interests and Liens will be created
under the Security Documents and other security agreements, mortgages, deeds of
trust and other instruments and documents (the terms of which shall be
substantially the same as the Security Documents and the Guarantee Agreement,
except as required by applicable law) in form and substance satisfactory to the
Collateral Agent, and the Borrower shall deliver or cause to be delivered to the
Lenders all such instruments and documents (including legal opinions, title
insurance policies and lien searches) as the Collateral Agent shall reasonably
request to evidence compliance with this Section. The Borrower agrees to provide
such evidence as the Collateral Agent shall reasonably request as to the
perfection and priority status of each such security interest and Lien.
(b) Within 60 days after the Closing Date, furnish the Collateral
Agent with an as-built survey of each Mortgaged Property, in form and substance
reasonably satisfactory to the Collateral Agent and endorsements to the title
policies insuring each Mortgaged Property providing survey coverage, including,
without limitation, access, ALTA 9 (excluding minor encroachments agreed upon by
the Administrative Agent and the Borrower) and "land same as survey"
endorsements.
(c) Use commercially reasonable efforts to furnish the Collateral
Agent with a copy of the original permanent or temporary certificate of
occupancy, if any, issued upon completion of each Mortgaged Property (or any
amendment issued upon completion of any alteration) by the appropriate
Governmental Authority or appropriate evidence that the use and occupancy of
each Mortgaged Property is authorized.
ARTICLE VI
Negative Covenants
The Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document have been paid in full and all
Letters of Credit have been canceled or have expired (or the Collateral Agent
shall have received cash collateral therefor pursuant to Section 2.22(j)) and
all amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, the Borrower will not, and will not
cause or permit any of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness for borrowed money existing on the date hereof and
set forth in Schedule 6.01;
(b) Indebtedness created hereunder and under the other Loan
Documents;
(c) the Senior Subordinated Notes;
58
(d) Guarantees of Indebtedness permitted under this Section 6.01,
provided that the obligations under such Guarantees are subordinated to
Indebtedness hereunder to the extent, and on the same terms, such primary
Indebtedness is subordinated to Indebtedness hereunder;
(e) intercompany Indebtedness among the Borrower and its
Subsidiaries; provided that the obligations of each obligor of such
Indebtedness shall (i) be subordinated in right of payment to the
Obligations; and (ii) be evidenced by promissory notes, which shall have
been pledged to the Collateral Agent, for the benefit of Lenders, as
security for the Obligations;
(f) Indebtedness not to exceed $10,000,000 in the aggregate at any
time outstanding either (i) secured by Liens described in Section
6.02(c)(excluding any such Indebtedness owed to the seller with respect to
any Permitted Acquisition) or Section 6.02(i), or (ii) in respect of
Capital Lease Obligations;
(g) Indebtedness under the Bond Documents not to exceed
$10,853,094.11 in the aggregate at any one time outstanding.
(h) Indebtedness resulting from endorsement of negotiable
instruments for collection in the ordinary course of business;
(i) Indebtedness arising under indemnity agreements to title
insurers to cause such title insurers to issue to the Collateral Agent
mortgagee title insurance policies;
(j) Indebtedness arising with respect to customary indemnification
and purchase price adjustment obligations incurred in connection with
Asset Sales and Permitted Acquisitions permitted hereunder;
(k) Indebtedness incurred in the ordinary course of business with
respect to surety and appeal bonds, performance and return-of-money bonds
and other similar obligations not exceeding at any time outstanding
$250,000 in aggregate liability;
(l) prior to the Closing Date, Indebtedness arising under the
Redemption Agreement;
(m) Indebtedness incurred in the ordinary course of business with
respect to open account arrangements or accrued expenses in current
account payables;
(n) Indebtedness incurred in connection with Permitted Acquisitions
permitted by Section 6.04(c) in an aggregate amount not exceeding
$250,000;
(o) any extensions, renewals or replacements of Indebtedness
described in paragraph (a), (c), (d) or (h) above to the extent that (i)
the aggregate principal amount of such Indebtedness is not at any time
increased and neither the maturity nor the average life of such
Indebtedness is shortened, (ii) if the Indebtedness being refinanced is
subordinated to the Obligations, the refinancing Indebtedness shall be
subordinated to the same extent and (iii)
59
no material terms applicable to such Indebtedness shall be less favorable
to the Lenders in any material respect than the terms of the Indebtedness
being refinanced;
(p) Indebtedness incurred in connection with Interest Rate
Protection Agreements with any Lender (or any Affiliate thereof) with
respect to the Loans, in each case with the consent of the Administrative
Agent, which shall not be unreasonably withheld; and
(q) Indebtedness not permitted by clauses (a) through (p) above, so
long as all such Indebtedness, in the aggregate at any time outstanding,
does not exceed $250,000.
SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on
any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Borrower and its Subsidiaries
existing on the date hereof and set forth in Schedule 6.02; provided that
such Liens shall secure only those obligations which they secure on the
date hereof or any extensions, renewals or replacements thereof permitted
pursuant to Section 6.01(o);
(b) any Lien created under the Loan Documents;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary; provided that (i)
such Lien is not created in contemplation of or in connection with such
acquisition, (ii) such Lien does not apply to any other property or assets
of the Borrower or any Subsidiary and (iii) such Lien does not (A)
materially interfere with the use, occupancy and operation of any
Mortgaged Property, (B) materially reduce the fair market value of such
Mortgaged Property but for such Lien or (C) result in any material
increase in the cost of operating, occupying or owning or leasing such
Mortgaged Property;
(d) Liens for taxes not yet due or which are being contested in
compliance with Section 5.03;
(e) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
and securing obligations that are not due and payable or which are being
contested in compliance with Section 5.03;
(f) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other
social security laws or regulations;
(g) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases (other than Capital Lease
Obligations), statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary
course of business;
60
(h) zoning restrictions, easements, rights-of-way, restrictions on
use of real property and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, are not substantial
in amount and do not materially detract from the value of the property
subject thereto or interfere with the ordinary conduct of the business of
the Borrower or any of its Subsidiaries;
(i) purchase money security interests in real property, improvements
thereto or equipment hereafter acquired (or, in the case of improvements,
constructed) by the Borrower or any Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by Section 6.01, (ii)
such security interests are incurred, and the Indebtedness secured thereby
is created, within 90 days after such acquisition (or construction), (iii)
the Indebtedness secured thereby does not exceed 85% of the lesser of the
cost or the fair market value of such real property, improvements or
equipment at the time of such acquisition (or construction) and (iv) such
security interests do not apply to any other property or assets of the
Borrower or any Subsidiary;
(j) deposits made in the ordinary course of business to secure
liability to insurance carriers;
(k) any attachment or judgment Lien not constituting an Event of
Default under sub- paragraph (i) of Article VII;
(l) leases or subleases granted to others not interfering in any
material respect with the business of the Borrower or any of its
Subsidiaries;
(m) any interest or title of a lessor or sublessor under any lease;
(n) Liens on goods held for consignment by the Borrower and its
Subsidiaries in the ordinary course of business;
(o) Liens arising from precautionary Uniform Commercial Code
financing statements with respect to assets leased by the Borrower or any
Subsidiary pursuant to operating leases; and
(p) Liens securing obligations under the Existing Letters of Credit.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred (a "Sale and Leaseback")
unless (a) the associated Indebtedness would be permitted by Section 6.01(f) and
(b) the Net Cash Proceeds thereof are used to prepay the Loans to the extent
required pursuant to Section 2.13(b).
61
SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire
any capital stock, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:
(a) investments by the Borrower in the capital stock of the
Subsidiaries that are Guarantors;
(b) Permitted Investments;
(c) the Borrower may make any Permitted Acquisition; provided that
the Borrower complies, and causes any acquired entity to comply, with the
applicable provisions of Section 5.11 and the Security Documents with
respect to the person or assets so acquired.
(d) the Borrower and its Subsidiaries may make intercompany loans
and investments to the extent permitted under Section 6.01(e);
(e) the Borrower and its Subsidiaries may make loans and advances to
employees for moving, entertainment, travel and other similar expenses in
the ordinary course of business not to exceed $500,000 in the aggregate at
any time outstanding;
(f) the Borrower and its Subsidiaries may make and own investments
in Joint Ventures; provided that as of any date, the sum of (i) the
cumulative aggregate amount of such investments plus (ii) the additional
amounts thereafter required to be contributed or paid by the Borrower and
its Subsidiaries in connection therewith minus (iii) the amount in cash
received by the Borrower and the Subsidiaries as returns on equity from
such Joint Ventures does not exceed $2,000,000 over the term of this
Agreement;
(g) Capital Expenditures permitted pursuant to Section 6.11;
(h) cash collateral provided to the Collateral Agent pursuant to the
Loan Documents; and
(i) promissory notes made by any purchaser in connection with any
Asset Sale permitted pursuant to Section 6.05(b).
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.
(a) Merge into or consolidate with any other person, or permit any other person
to merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or any
substantial part of its assets (whether now owned or hereafter acquired) or any
capital stock of any Subsidiary, or purchase, lease or otherwise acquire (in one
transaction or a series of transactions) all or any substantial part of the
assets of any other person, except that (i) the Borrower and any Subsidiary may
purchase and sell inventory in the ordinary course of business, (ii) if at the
time thereof and immediately after giving effect thereto no Event of Default or
Default shall have occurred and be continuing (A) any wholly owned Domestic
Subsidiary may merge into the Borrower in a transaction in which the Borrower is
the surviving corporation, (B) any wholly owned Domestic Subsidiary may merge
into or consolidate with any other wholly owned Domestic Subsidiary in a
62
transaction in which the surviving entity is a wholly owned Subsidiary that is a
Guarantor and no person other than the Borrower or a wholly owned Subsidiary
receives any consideration and (C) in connection with any Permitted Acquisition
pursuant to Section 6.04(c), the Borrower or any wholly owned Subsidiary that is
a Guarantor may merge into or consolidate with any entity acquired pursuant to
such Permitted Acquisition in a transaction in which the surviving entity is the
Borrower or a wholly owned Subsidiary that is a Guarantor and (iii) the Borrower
and its Subsidiaries may make dispositions of obsolete equipment not used or
useful in the business.
(b) Engage in any Asset Sale not otherwise prohibited by Section
6.05(a) unless all of the following conditions are met: (i) the consideration
received is at least equal to the fair market value of such assets; (ii) 90% of
the consideration received is cash; (iii) the Net Cash Proceeds of such Asset
Sale are applied as required by Section 2.13(b); (iv) after giving effect to the
sale or other disposition of the assets included within the Asset Sale and the
repayment of Indebtedness with the proceeds thereof, the Borrower is in
compliance on a pro forma basis with the covenants set forth in Sections 6.12,
6.13 and 6.14 recomputed for the most recently ended fiscal quarter for which
information is available and is in compliance with all other terms and
conditions contained in this Agreement; and (v) no Default or Event of Default
shall result from such sale or other disposition.
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends. (a) Declare or pay, directly or indirectly, any
dividend or make any other distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, with respect to
any shares of its capital stock or directly or indirectly redeem, purchase,
retire or otherwise acquire for value (or permit any Subsidiary to purchase or
acquire) any shares of any class of its capital stock or set aside any amount
for any such purpose; provided, however, that (i) any Subsidiary may declare and
pay dividends or make other distributions to the Borrower; (ii) the Borrower or
any Subsidiary may make payments and distributions pursuant to the Tax Sharing
Agreement to Holdings; (iii) in addition to the payments permitted to be made by
Borrower to Holdings pursuant to clause (ii) above, the Borrower may pay
dividends to Holdings, provided all of the following conditions are satisfied:
(A) at the time of the dividends and after giving effect thereto, no Default or
Event of Default has occurred and is continuing or would arise as a result
thereof; (B) the dividends received by Holdings shall be used solely by Holdings
for redemption of Holdings capital stock from employees, former employees,
directors or former directors of Holdings or any subsidiary of Holdings (or
permitted transferees of such employees, former employees, directors or former
directors), pursuant to the terms of the agreements (including employment
agreements), or plans (or amendments thereto) or other arrangements approved by
the Board of Directors of Holdings under which such individuals purchase or sell
or are granted the option to purchase or sell, shares of such capital stock; (C)
the amount of dividends made pursuant to this clause (iii) during the term of
this Agreement and the amount used by Holdings for redemption of Holdings
capital stock shall not exceed $500,000 in any calendar year; and (D) on a pro
forma basis and after giving effect to such payment as if it were made in the
twelve month period ending on the last day of the month immediately preceding
the month in which the dividend is to be made, the Borrower is in compliance
with Section 6.14; (iv) the Borrower may pay a dividend to Holdings on the
Closing Date in an aggregate amount not exceeding $56,600,000, the proceeds of
which are used by Holdings solely (A) to finance the Recapitalization and (B) to
pay related fees, costs and expenses in connection with the Transactions; (v)
dividends or distributions payable to Holdings solely in common stock of the
Borrower; and (vi) so long as no Default shall have occurred and be continuing,
dividends to Holdings used to pay its operating
63
expenses incurred in the ordinary course of business in an aggregate amount not
exceeding $100,000 in any Fiscal Year.
(b) Permit its subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such subsidiary to (i) pay any dividends or
make any other distributions on its capital stock or any other interest or (ii)
make or repay any loans or advances to the Borrower or the parent of such
subsidiary.
SECTION 6.07. Transactions with Affiliates. Except as set forth on
Schedule 6.07 and except for transactions between Loan Parties, sell or transfer
any property or assets to, or purchase or acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) that the Borrower or any Subsidiary may engage in any of the
foregoing transactions in the ordinary course of business at prices and on terms
and conditions (taken as a whole) not less favorable to the Borrower or such
Subsidiary than could be obtained on an arm's-length basis from unrelated third
parties and (b) the Borrower may enter into the Employment Agreement dated as of
the date hereof, with Xx. Xxxxxxx X. Xxxxxxxx, a copy of which has been provided
to the Lenders.
SECTION 6.08. Management and Other Fees. Except as set forth on Schedule
6.08, pay any management, consulting or similar fees to any Affiliate or to any
director, officer or employee of Holdings or any Loan Party except for customary
fees to directors.
SECTION 6.09. Business of Borrower and Subsidiaries. Engage at any time in
any business or business activity other than the Related Businesses.
SECTION 6.10. Other Indebtedness and Agreements. (a) Permit any waiver,
supplement, modification, amendment, termination or release of (i) the
Recapitalization Agreement or (ii) any instrument or agreement pursuant to which
any preferred stock of the Borrower or any Subsidiary is outstanding with an
aggregate liquidation value in excess of $1,000,000, or modify its charter or
by-laws, in each case to the extent that any such waiver, supplement,
modification, amendment, termination or release would be adverse to the Lenders
in any material respect.
(b) Permit any waiver, supplement, modification, amendment, termination or
release of any indenture, instrument or agreement pursuant to which any
Indebtedness of the Borrower or any Subsidiary in an aggregate principal amount
in excess of $1,000,000 is outstanding if the effect of such waiver, supplement,
modification, amendment, termination or release is to (i) increase the interest
rate on such Indebtedness; (ii) change the dates upon which payments of
principal or interest are due on such Indebtedness; (iii) change any event of
default or add any covenant with respect to such Indebtedness; (iv) change the
prepayment provisions of such Indebtedness; (v) change the subordination
provisions thereof (or the subordination terms of any Guarantee thereof); or
(vi) change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights on
the holder of such Indebtedness in a manner adverse to the Borrower, any
Subsidiary, the Administrative Agent or the Lenders.
(c)(i) Make any distribution, whether in cash, property, securities or a
combination thereof, other than regular scheduled payments of principal and
interest as and when due (to the extent not
64
prohibited by applicable subordination provisions), in respect of, or pay, or
offer or commit to pay, or directly or indirectly redeem, repurchase, retire or
otherwise acquire for consideration, or set apart any sum for the aforesaid
purposes, any Indebtedness for borrowed money of the Borrower or any Subsidiary
in an outstanding principal amount exceeding $1,000,000 or (ii) pay in cash any
amount in respect of such Indebtedness that may at the obligor's option be paid
in kind or in other securities.
SECTION 6.11. Capital Expenditures. Permit the aggregate amount of
Consolidated Capital Expenditures made in cash by the Borrower and the
Subsidiaries, taken as a whole, in any Fiscal Year to exceed the sum of
$7,000,000; provided, however, that the amount of Consolidated Capital
Expenditures in any Fiscal Year permitted to be incurred shall be increased by
an amount equal to the amount of unused Consolidated Capital Expenditures
permitted to be incurred pursuant to this covenant for the immediately preceding
Fiscal Year (without giving effect to this proviso).
SECTION 6.12. Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as of, and for the period of four consecutive fiscal quarters
ending during any period set forth below, commencing with the period ending on
the last day of the second fiscal quarter of the 1998 Fiscal Year, to be in
excess of the ratio set forth below for such period.
Period Ratio
Closing Date through end of
1998 Fiscal Year 5.95 to 1.00
1999 Fiscal Year 5.95 to 1.00
2000 Fiscal Year 5.35 to 1.00
2001 Fiscal Year 4.50 to 1.00
2002 Fiscal Year 3.75 to 1.00
Thereafter 3.25 to 1.00
; provided, however, that for purposes of determining the Consolidated Leverage
Ratio for the four-fiscal-quarter periods ending on the last day of the second
and third quarters of the 1998 Fiscal Year, Consolidated EBITDA shall be deemed
to be (a) in the case of the four-fiscal-quarter period ending on the last day
of the second fiscal quarter of the 1998 Fiscal Year, Consolidated EBITDA for
the first two quarters ending on such date plus $11,950,000 and (b) in the case
of the four-fiscal-quarter period ending on the last day of the third fiscal
quarter of the 1998 Fiscal Year, Consolidated EBITDA for the first three
quarters ending on such date plus $5,975,000.
SECTION 6.13. Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio as of, and for the period of four
consecutive fiscal quarters ending during any period set forth below, commencing
with the period ending on the last day of the second fiscal quarter of the 1998
Fiscal Year, to be less than the ratio set forth below for such period.
Period Ratio
Closing Date through end of
1998 Fiscal Year 1.60 to 1.00
1999 Fiscal Year 1.75 to 1.00
65
2000 Fiscal Year 1.90 to 1.00
2001 Fiscal Year 2.10 to 1.00
2002 Fiscal Year 2.25 to 1.00
Thereafter 2.50 to 1.00
; provided, however, that for purposes of determining the Consolidated Interest
Coverage Ratio for the four-fiscal-quarter periods ending on the last day of the
second, third and fourth quarters of the 1998 Fiscal Year, (a) Consolidated
EBITDA shall be deemed to be (i) in the case of the four-fiscal-quarter period
ending on the last day of the second fiscal quarter of the 1998 Fiscal Year,
Consolidated EBITDA for the first two quarters ending on such date plus
$11,950,000 and (ii) in the case of the four-fiscal-quarter period ending on the
last day of the third fiscal quarter of the 1998 Fiscal Year, Consolidated
EBITDA for the first three quarters ending on such date plus $5,975,000, and (b)
Consolidated Interest Expense shall be deemed to be (i) in the case of the
four-fiscal-quarter period ending on the last day of the second quarter of the
1998 Fiscal Year, Consolidated Interest Expense for the second fiscal quarter
ending on such date multiplied by 4, (ii) in the case of the four-fiscal-quarter
period ending on the last day of the third quarter on the 1998 Fiscal Year,
Consolidated Interest Expense for the second and third fiscal quarters ending on
such date, multiplied by 2 and (iii) in the case of the four-fiscal-quarter
period ending on the last day of the 1998 Fiscal Year, Consolidated Interest
Expense for the second, third and fourth fiscal quarters ending on such date,
multiplied by 1-1/3.
SECTION 6.14. Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio as of, and for the period of four
consecutive fiscal quarters ending during any period set forth below, commencing
with the period ending on the last day of the second fiscal quarter of the 1988
Fiscal Year, to be less than the ratio set forth below for such period.
Period Ratio
Closing Date through end of
1998 Fiscal Year 1.00 to 1.00
1999 Fiscal Year 1.00 to 1.00
2000 Fiscal Year 1.00 to 1.00
2001 Fiscal Year 1.05 to 1.00
2002 Fiscal Year 1.05 to 1.00
Thereafter 1.05 to 1.00
; provided, however, that for purposes of determining the Consolidated Fixed
Charge Coverage Ratio for the four-fiscal-quarter periods ending on the last day
of the second, third and fourth quarters of the 1998 Fiscal Year, (a)
Consolidated EBITDA shall be deemed to be (i) in the case of the
four-fiscal-quarter period ending on the last day of the second fiscal quarter
of the 1998 Fiscal Year, Consolidated EBITDA for the first two quarters ending
on such date plus $11,950,000 and (ii) in the case of the four-fiscal-
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quarter period ending on the last day of the third fiscal quarter of the 1998
Fiscal Year, Consolidated EBITDA for the first three quarters ending on such
date plus $5,975,000, (b) Consolidated Interest Expense shall be deemed to be
(i) in the case of the four-fiscal-quarter period ending on the last day of the
second quarter of the 1998 Fiscal Year, Consolidated Interest Expense for the
second fiscal quarter ending on such date multiplied by 4, (ii) in the case of
the four-fiscal-quarter period ending on the last day of the third quarter on
the 1998 Fiscal Year, Consolidated Interest Expense for the second and third
fiscal quarters ending on such date, multiplied by 2 and (iii) in the case of
the four-fiscal-quarter period ending on the last day of the 1998 Fiscal Year,
Consolidated Interest Expense for the second, third and fourth fiscal quarters
ending on such date, multiplied by 1-1/3; and (c) any provision for (or any
benefit from) income taxes or franchise taxes and Consolidated Capital
Expenditures shall be deemed to be such provision for taxes or such Consolidated
Capital Expenditures from the Closing Date through the last day of such second
quarter, third quarter or fourth quarter, as applicable.
SECTION 6.15. Fiscal Year. Permit the Fiscal Year to end on a day other
than the Saturday closest to March 31.
ARTICLE VII
Events of Default
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made by any Loan
Party in or in connection with any Loan Document or the borrowings or
issuances of Letters of Credit hereunder, or any representation, warranty,
statement or information contained in any report, certificate, financial
statement or other instrument furnished on behalf of any Loan Party in
connection with or pursuant to any Loan Document, shall prove to have been
false or misleading in any material respect when so made, deemed made or
furnished;
(b) default shall be made in the payment of any principal of any
Loan or the reimbursement with respect to any L/C Disbursement when and as
the same shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or by acceleration thereof or
otherwise (other than any failure to make any such payment to the extent,
and during the period, such payment is not required pursuant to Section
2.13(i));
(c) default shall be made in the payment of any interest on any
Loan, interest on any L/C Disbursement or any Fee or any other amount
(other than an amount referred to in (b) above) due under any Loan
Document, when and as the same shall become due and payable, and such
default shall continue unremedied for a period of three Business Days
(other than any failure to make any such payment to the extent, and during
the period, such payment is not required pursuant to Section 2.13(i));
(d) default shall be made in the due observance or performance by
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in Section 5.01(a), 5.05 or 5.08 or in Article VI;
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(e) default shall be made in the due observance or performance by
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in any Loan Document (other than those specified in (b), (c) or
(d) above) and such default shall continue unremedied for a period of 30
days after notice thereof from the Administrative Agent or any Lender to
the Borrower;
(f) Holdings, the Borrower or any Subsidiary shall (i) fail to pay
any principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $2,500,000, when and as
the same shall become due and payable, or (ii) fail to observe or perform
any other term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any such Indebtedness if
the effect of any failure referred to in this clause (ii) is to cause, or
to permit the holder or holders of such Indebtedness or a trustee on its
or their behalf (with or without the giving of notice, or the lapse of
time in the case of any event described in clause (i) of this paragraph,
or following any required lapse of time, in the case of any event
described in clause (ii) of this paragraph) to cause, such Indebtedness to
become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of Holdings, the Borrower or any Subsidiary, or of a
substantial part of the property or assets of Holdings, the Borrower or a
Subsidiary, under Title 11 of the United States Code, as now constituted
or hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for Holdings, the Borrower or any Subsidiary or for a substantial
part of the property or assets of Holdings, the Borrower or a Subsidiary
or (iii) the winding-up or liquidation of Holdings, the Borrower or any
Subsidiary; and such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing
shall be entered;
(h) Holdings, the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11
of the United States Code, as now constituted or hereafter amended, or any
other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or the filing of any
petition described in (g) above, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for Holdings, the Borrower or any Subsidiary or for a
substantial part of the property or assets of Holdings, the Borrower or
any Subsidiary, (iv) file an answer admitting the material allegations of
a petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become
due or (vii) take any action for the purpose of effecting any of the
foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $2,500,000 (to the extent not adequately covered by
insurance as to which the insurance company has acknowledged coverage
pursuant to a writing reasonably satisfactory to the Administrative Agent)
shall be rendered against Holdings, the Borrower, any Subsidiary
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or any combination thereof and the same shall remain undischarged for a
period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of Holdings, the Borrower or
any Subsidiary to enforce any such judgment;
(j) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other such ERISA Events,
could reasonably be expected to result in liability of the Borrower and
its ERISA Affiliates in an aggregate amount exceeding $2,500,000 or
requires payments exceeding $2,500,000;
(k) any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by the Borrower or any
other Loan Party not to be, a valid, perfected, first priority (except as
otherwise expressly provided in this Agreement or such Security Document)
security interest in the securities, assets or properties covered thereby,
except to the extent that any such loss of perfection or priority results
from the failure of the Collateral Agent to maintain possession of
certificates representing securities pledged under the Pledge Agreement
and except to the extent that such loss is covered by a lender's title
insurance policy and the related insurer promptly after such loss shall
have acknowledged in writing that such loss is covered by such title
insurance policy; or
(l) there shall have occurred a Change in Control or
(m) the Borrower shall fail to replace the Existing Letters of
Credit at least 180 days prior to their respective stated expiry dates.
then, and in every such event (other than an event with respect to the
Borrower described in paragraph (g) or (h) above), and at any time
thereafter during the continuance of such event, the Administrative Agent
may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or
different times: (i) terminate forthwith the Commitments and (ii) declare
the Loans then outstanding to be forthwith due and payable in whole or in
part, whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued
Fees and all other liabilities of the Borrower accrued hereunder and under
any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which
are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any
event with respect to the Borrower described in paragraph (g) or (h)
above, the Commitments shall automatically terminate and the principal of
the Loans then outstanding, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued
hereunder and under any other Loan Document, shall automatically become
due and payable, without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by the Borrower,
anything contained herein or in any other Loan Document to the contrary
notwithstanding.
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ARTICLE VIII
The Administrative Agent and the Collateral Agent
In order to expedite the transactions contemplated by this Agreement,
Credit Suisse First Boston is hereby appointed to act as Administrative Agent
and Collateral Agent on behalf of the Lenders and the Issuing Banks (for
purposes of this Article VIII, the Administrative Agent and the Collateral Agent
are referred to collectively as the "Agents"). Each of the Lenders and each
assignee of any such Lender, hereby irrevocably authorizes the Agents to take
such actions on behalf of such Lender or assignee or the Issuing Banks and to
exercise such powers as are specifically delegated to the Agents by the terms
and provisions hereof and of the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders and the Issuing Banks,
without hereby limiting any implied authority, (a) to receive on behalf of the
Lenders and the Issuing Banks all payments of principal of and interest on the
Loans, all payments in respect of L/C Disbursements and all other amounts due to
the Lenders hereunder, and promptly to distribute to each Lender or each Issuing
Bank its proper share of each payment so received; (b) to give notice on behalf
of each of the Lenders to the Borrower of any Event of Default specified in this
Agreement of which the Administrative Agent has actual knowledge acquired in
connection with its agency hereunder; and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered by the
Borrower or any other Loan Party pursuant to this Agreement or the other Loan
Documents as received by the Administrative Agent. Without limiting the
generality of the foregoing, the Agents are hereby expressly authorized to
execute any and all documents (including releases) with respect to the
Collateral and the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents.
Neither the Agents nor any of their respective directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his gross negligence or wilful misconduct, or be
responsible for any statement, warranty or representation herein or the contents
of any document delivered in connection herewith, or be required to ascertain or
to make any inquiry concerning the performance or observance by the Borrower or
any other Loan Party of any of the terms, conditions, covenants or agreements
contained in any Loan Document. The Agents shall not be responsible to the
Lenders for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement or any other Loan Documents, instruments or
agreements. The Agents shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by the
Required Lenders and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on all
the Lenders. Each Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the proper person or
persons. Neither the Agents nor any of their respective directors, officers,
employees or agents shall have any responsibility to the Borrower or any other
Loan Party on account of the failure of or delay in performance or breach by any
Lender or any Issuing Bank of any of its obligations hereunder or to any Lender
or any Issuing Bank on account of the failure of or delay in performance or
breach by any other Lender or any Issuing Bank or the Borrower or any other Loan
Party of any of their respective obligations hereunder or under any other Loan
Document or in connection herewith or therewith. Each of the Agents may execute
any and all duties hereunder by
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or through agents or employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters arising hereunder and
shall not be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.
The Lenders hereby acknowledge that neither Agent shall be under any duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in writing to do so by
the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as provided
below, either Agent may resign at any time by notifying the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent which shall be a bank with
an office in New York , New York, having a combined capital and surplus of at
least $500,000,000 or an Affiliate of any such bank. Upon the acceptance of any
appointment as Agent hereunder by a successor bank, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties and
obligations hereunder. After the Agent's resignation hereunder, the provisions
of this Article and Section 9.05 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent.
With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not an Agent, and
the Agents and their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not an Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in the amount
of its pro rata share (based on its Commitments hereunder) of any expenses
incurred for the benefit of the Lenders by the Agents, including reasonable
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders, that shall not have been reimbursed by the Borrower as
required under this Agreement and (b) to indemnify and hold harmless each Agent
and any of its directors, officers, employees or agents, on demand, in the
amount of such pro rata share, from and against any and all liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against it in its capacity as Agent or any of them
in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by it or any of them under this
Agreement or any other Loan Document, to the extent the same shall not have been
reimbursed by the Borrower or any other Loan Party, provided that no Lender
shall be liable to an Agent or any such other indemnified person for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Agent or any of
its directors, officers, employees or agents. Each Revolving Credit Lender
agrees to reimburse and indemnity each of the Issuing Banks and its directors,
employees and agents, in each case, to the same extent and subject to the same
limitations as provided above for the Agents.
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Each Lender acknowledges that it has, independently and without reliance
upon the Agents or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Agents or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement or any other Loan Docu ment, any related agreement or any
document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 00 Xxxxx Xxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000, Attention of Xx. Xxxxxxx X. Xxxxxxxx (Telecopy No.
(000) 000-0000);
(b) if to the Administrative Agent, to Credit Suisse First Boston,
00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxx XxxXxxxxx
(Telecopy No. (000) 000-0000); and
(c) if to a Lender, to it at its address (or telecopy number) set
forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Banks and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Banks, regardless of any investigation made by the Lenders or the
Issuing Banks or on their behalf, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any Fee or any
other amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not been terminated. The provisions of Sections 2.14, 2.16,
2.20 and 9.05 shall remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the consummation of the
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transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Collateral Agent, any Lender or any Issuing Bank.
SECTION 9.03. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective permitted successors and assigns.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrower, the Administrative Agent, the
Issuing Banks or the Lenders that are contained in this Agreement shall bind and
inure to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate of such Lender, (x) the Borrower and the Administrative Agent (and, in
the case of any assignment of a Revolving Credit Commitment, the Issuing Banks)
must give their prior written consent to such assignment (which consent shall
not be unreasonably withheld) and (y) the amount of the Commitment of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 (or, if less, the entire
remaining amount of such Lender's Commitment), (ii) the parties to each such
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of $3,500 and
(iii) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire and any documents required
pursuant to Section 2.20(e). Upon acceptance and recording pursuant to paragraph
(e) of this Section 9.04, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five Business
Days after the execution thereof, (A) the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement and
(B) the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.14, 2.16, 2.20 and 9.05,
as well as to any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Term Loan Commitment and Revolving Credit Commitment, and the outstanding
balances of its Term
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Loans and Revolving Loans, in each case without giving effect to assignments
thereof which have not become effective, are as set forth in such Assignment and
Acceptance, (ii) except as set forth in (i) above, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto, or the financial condition of
the Borrower or any Subsidiary or the performance or observance by the Borrower
or any Subsidiary of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements referred to in Section 3.05(a) or delivered pursuant to
Section 5.04 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, the Collateral Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (vi) such assignee appoints
and authorizes the Administrative Agent and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent and the Collateral Agent,
respectively, by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive absent manifest error and the Borrower, the Administrative Agent, the
Issuing Banks, the Collateral Agent and the Lenders may treat each person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, any
Issuing Bank, the Collateral Agent and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of the Borrower, the Issuing
Banks and the Administrative Agent to such assignment, the Administrative Agent
shall (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Lenders and the Issuing Banks. No assignment shall be effective unless it has
been recorded in the Register as provided in this paragraph (e).
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(f) Each Lender may without the consent of the Borrower, the Issuing Banks
or the Administrative Agent sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participating
banks or other entities shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.14, 2.16 and 2.20 to the same extent as if
they were Lenders (provided that the Borrower shall not be required to pay an
amount pursuant to this clause (iii) that is greater than the amount that it
would have been required to pay had no participating interest been sold) and
(iv) the Borrower, the Administrative Agent, the Issuing Banks and the Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans or L/C Disbursements and to approve any amendment, modification or waiver
of any provision of this Agreement (other than amendments, modifications or
waivers decreasing any fees payable hereunder or the amount of principal of or
the rate at which interest is payable on the Loans, extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans or
increasing or extending the Commitments).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided that, prior to any such disclosure of
information, each such assignee or participant or proposed assignee or
participant shall execute an agreement whereby such assignee or participant
shall agree (subject to customary exceptions) to preserve the confidentiality of
such confidential information on terms no less restrictive than those applicable
to the Lenders pursuant to Section 9.16.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to a Federal Reserve Bank to secure extensions of credit by
such Federal Reserve Bank to such Lender; provided that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
Bank for such Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, the Borrower shall, at the request of the
assigning Lender, duly execute and deliver to the assigning Lender a promissory
note or notes evidencing the Loans made to the Borrower by the assigning Lender
hereunder.
(i) The Borrower shall not assign or delegate any of its rights or duties
hereunder without the prior written consent of the Administrative Agent, each
Issuing Bank and each Lender, and any attempted assignment without such consent
shall be null and void.
(j) In the event that Standard & Poor's Ratings Group, Xxxxx'x Investors
Service, Inc., and Xxxxxxxx'x BankWatch (or InsuranceWatch Ratings Service, in
the case of Lenders that are insurance companies (or Best's Insurance Reports,
if such insurance company is not rated by InsuranceWatch Ratings Service))
shall, after the date that any Lender becomes a Revolving Credit Lender,
downgrade the long-term certificate deposit ratings of such Lender, and the
resulting ratings shall be below BBB-, Baa3 and C (or BB, in the case of a
Lender that is an insurance company (or B, in the case of an insurance company
not rated by InsuranceWatch Ratings Service)), then each Issuing
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Bank shall have the right, but not the obligation, at its own expense, upon
notice to such Lender and the Administrative Agent, to replace (or to request
the Borrower to use its reasonable efforts to replace) such Lender with an
assignee (in accordance with and subject to the restrictions contained in
paragraph (b) above), and such Lender hereby agrees to transfer and assign
without recourse (in accordance with and subject to the restrictions contained
in paragraph (b) above) all its interests, rights and obligations in respect of
its Revolving Credit Commitment to such assignee; provided, however, that (i) no
such assignment shall conflict with any law, rule and regulation or order of any
Governmental Authority and (ii) such Issuing Bank or such assignee, as the case
may be, shall pay to such Lender in immediately available funds on the date of
such assignment the principal of and interest accrued to the date of payment on
the Loans made by such Lender hereunder and all other amounts accrued for such
Lender's account or owed to it hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent, the
Collateral Agent and the Issuing Banks in connection with the syndication of the
credit facilities provided for herein and the preparation and administration of
this Agreement and the other Loan Documents or in connection with any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions hereby or thereby contemplated shall be
consummated) or incurred by the Administrative Agent, the Collateral Agent, any
Issuing Bank or any Lender in connection with the enforcement or protection of
its rights in connection with this Agreement and the other Loan Documents or in
connection with the Loans made or Letters of Credit issued hereunder, including
the reasonable fees, charges and disbursements of Cravath, Swaine & Xxxxx,
counsel for the Administrative Agent and the Collateral Agent, and, in
connection, with any such enforcement or protection, the reasonable fees,
charges and disbursements of any other counsel for the Administrative Agent, the
Collateral Agent, an Issuing Bank or any Lender.
(b) The Borrower agrees to indemnify the Administrative Agent, the
Collateral Agent, each Lender and each Issuing Bank, each Affiliate of any of
the foregoing persons and each of their respective directors, officers,
employees and agents (each such person being called an "Indemnitee") against,
and to hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable counsel fees, charges and
disbursements, incurred by or asserted against any Indemnitee arising out of, in
any way connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated thereby, (ii) the use of the proceeds of the Loans or issuance of
Letters of Credit, (iii) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnitee is a party
thereto, or (iv) any actual or alleged presence or Release of Hazardous
Materials on any property owned or operated by the Borrower or any of the
Subsidiaries, or any Environmental Claim related in any way to the Borrower or
the Subsidiaries; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 9.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions
76
contemplated hereby, the repayment of any of the Loans, the expiration of the
Commitments, the expiration of any Letter of Credit, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative Agent,
the Collateral Agent, any Lender or any Issuing Bank. All amounts due under this
Section 9.05 shall be payable on written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, except to the extent prohibited by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any and all the obligations of the
Borrower now or hereafter existing under this Agreement and other Loan Documents
held by such Lender, irrespective of whether or not such Lender shall have made
any demand under this Agreement or such other Loan Document and although such
obligations may be unmatured. The rights of each Lender under this Section 9.06
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have. Any Lender that sets off any deposits pursuant to
this Section shall give the Borrower notice of such setoff at the time thereof
or promptly thereafter.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, any Lender or any Issuing Bank in
exercising any power or right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Banks and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agree ment or any other Loan Document or consent to any
departure by the Borrower or any other Loan Party therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders; provided, however, that no such
agreement shall (i) decrease the principal amount
77
of, or extend the maturity of or any scheduled principal payment date or date
for the payment of any interest on any Loan or any date for reimbursement of an
L/C Disbursement, or waive or excuse any such payment or any part thereof, or
decrease the rate of interest on any Loan or L/C Disbursement, without the prior
written consent of each Lender affected thereby, (ii) change or extend the
Commitment or decrease or extend the date for payment of the Commitment Fees or
L/C Participation Fee of any Lender without the prior written consent of such
Lender or (iii) amend or modify the pro rata requirement of Section 2.17, the
provisions of Section 9.04(i), the provisions of this Section, the definition of
the term "Required Lenders" or release any Guarantor or all or any substantial
part of the Collateral, without the prior written consent of each Lender;
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent, the Collateral Agent or any
Issuing Bank hereunder or under any other Loan Document without the prior
written consent of the Administrative Agent, the Collateral Agent or such
Issuing Bank.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and other
amounts which are treated as interest on such Loan or participation in such L/C
Disbursement under applicable law (collectively, the "Charges"), shall exceed
the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan or
participation in accordance with applicable law, the rate of interest payable in
respect of such Loan or participation hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan or participation but were not payable as a result of the operation
of this Section 9.09 shall be cumulated and the interest and Charges payable to
such Lender in respect of other Loans or participations or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and the
other Loan Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any other previous agreement among the parties
with respect to the subject matter hereof is superseded by this Agreement and
the other Loan Documents. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon any party other than
the parties hereto and thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS
78
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) The
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against the Borrower or its properties in the courts of
any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
79
SECTION 9.16. Confidentiality. The Administrative Agent, the Collateral
Agent, each Issuing Bank and each of the Lenders agrees to keep confidential
(and to use its best efforts to cause its respective agents and representatives
to keep confidential) the Information (as defined below) and all copies thereof,
extracts therefrom and analyses or other materials based thereon, except that
the Administrative Agent, the Collateral Agent, any Issuing Bank or any Lender
shall be permitted to disclose Information (a) to such of its respective
officers, directors, employees, agents, affiliates and representatives as need
to know such Information, (b) to the extent requested by any regulatory
authority, (c) to the extent otherwise required by applicable laws and
regulations or by any subpoena or similar legal process, (d) in connection with
any suit, action or proceeding relating to the enforcement of its rights
hereunder or under the other Loan Documents or (e) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 9.16 or (ii) becomes available to the Administrative Agent, any
Issuing Bank, any Lender or the Collateral Agent on a nonconfidential basis from
a source other than the Borrower. For the purposes of this Section,
"Information" shall mean all financial statements, certificates, reports,
agreements and information (including all analyses, compilations and studies
prepared by the Administrative Agent, the Collateral Agent, any Issuing Bank or
any Lender based on any of the foregoing) that are received from the Borrower
and related to the Borrower, any shareholder of the Borrower or any employee,
customer or supplier of the Borrower, other than any of the foregoing that were
available to the Administrative Agent, the Collateral Agent, any Issuing Bank or
any Lender on a nonconfidential basis prior to its disclosure thereto by the
Borrower, and which are in the case of
80
Information provided after the date hereof, clearly identified at the time of
delivery as confidential. The provisions of this Section 9.16 shall remain
operative and in full force and effect regardless of the expiration and term of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ROLLER BEARING COMPANY OF
AMERICA, INC.,
by
/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President and
Chief Financial Officer
CREDIT SUISSE FIRST BOSTON, individually
and as Administrative Agent, Collateral Agent and
Issuing Bank,
by
/s/ Xxxxxxx Xxxxxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Vice President
by
/s/ J. Xxxxx Xxxxx
-----------------------------
Name: J. Xxxxx Xxxxx
Title: Associate
XXXXXX FINANCIAL, INC., individually and as
Issuing Bank,
by
/s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
81
MASS MUTUAL LIFE INSURANCE CO.,
by
/s/ Xxxx X. Xxxxx
-----------------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
CORESTATES BANK, N.A.,
by
/s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
FIRST SOURCE FINANCIAL LLP,
by First Source Financial, Inc.,
its agent/manager
by
/s/ Xxxx X. Xxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK,
by
/s/ X. Xxxxxxx Caner
-----------------------------
Name: X. Xxxxxxx Caner
Title: Vice President
TRANSAMERICA BUSINESS CREDIT
CORPORATION,
by
/s/ Xxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxx
Title: Senior Vice President
00
XXXXX XXXX XX XXXXXXXXXX, N.A.,
by
/s/ Ali Xxxxx Xxxxxxxxx
-----------------------------
Name: Ali Xxxxx Xxxxxxxxx
Title: Vice President
XXXXX FARGO BANK, N.A.,
by
/s/ Xxxxx X. Xxx
-----------------------------
Name: Xxxxx X. Xxx
Title: Vice President
