EXECUTION COPY
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AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
AFTERMARKET TECHNOLOGY CORP.,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
CHASE SECURITIES INC.,
AS GLOBAL ARRANGER
AND
THE CHASE MANHATTAN BANK,
AS AGENT
DATED AS OF MARCH 6, 1998
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TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . . . . . 18
SECTION 2. AMOUNT AND TERMS OF CREDIT COMMITMENTS . . . . . . . . . . . . . . . 19
2.1 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . 19
2.2 Procedure for Revolving Credit Borrowing . . . . . . . . . . . . . . 19
2.3 Termination or Reduction of Revolving Credit Commitments . . . . . . 20
2.4 Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.5 Procedure for Term Loan Borrowing. . . . . . . . . . . . . . . . . . 20
2.6 Swing Line Commitments . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3. LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.1 L/C Commitment.. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.2 Procedure for Issuance of Letters of Credit. . . . . . . . . . . . . 23
3.3 L/C Participations.. . . . . . . . . . . . . . . . . . . . . . . . . 23
3.4 Reimbursement Obligation of the Borrower.. . . . . . . . . . . . . . 24
3.5 Obligations Absolute.. . . . . . . . . . . . . . . . . . . . . . . . 25
3.6 Letter of Credit Payments. . . . . . . . . . . . . . . . . . . . . . 25
3.7 Application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4. GENERAL PROVISIONS APPLICABLE
TO LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . 26
4.1 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.2 Repayment of Loans; Evidence of Debt . . . . . . . . . . . . . . . . 27
4.3 Amortization of Term Loans . . . . . . . . . . . . . . . . . . . . . 28
4.4 Optional and Mandatory Prepayments . . . . . . . . . . . . . . . . . 29
4.5 Conversion and Continuation Options. . . . . . . . . . . . . . . . . 30
4.6 Maximum Number of Tranches . . . . . . . . . . . . . . . . . . . . . 31
4.7 Interest Rates and Payment Dates . . . . . . . . . . . . . . . . . . 31
4.8 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . 31
4.9 Inability to Determine Interest Rate . . . . . . . . . . . . . . . . 32
4.10 Pro Rata Treatment and Payments. . . . . . . . . . . . . . . . . . . 32
4.11 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.12 Requirements of Law. . . . . . . . . . . . . . . . . . . . . . . . . 33
4.13 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.14 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.15 Change of Lending Office . . . . . . . . . . . . . . . . . . . . . . 36
PAGE
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . 36
5.1 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . . 36
5.2 No Change; Solvency. . . . . . . . . . . . . . . . . . . . . . . . . 37
5.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . . . 38
5.4 Corporate Power; Authorization; Enforceable Obligations. . . . . . . 38
5.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . 39
5.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . 39
5.9 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . 39
5.10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.11 Federal Regulations. . . . . . . . . . . . . . . . . . . . . . . . . 39
5.12 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.13 Investment Company Act; Other Regulations. . . . . . . . . . . . . . 40
5.14 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.15 Purpose of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.16 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . 41
5.17 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . 42
5.18 No Material Misstatements. . . . . . . . . . . . . . . . . . . . . . 42
5.19 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.20 Senior Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . 43
6.1 Conditions to Extensions of Credit . . . . . . . . . . . . . . . . . 43
6.2 Conditions to Each Extension of Credit . . . . . . . . . . . . . . . 46
SECTION 7. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 47
7.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 47
7.2 Certificates; Other Information. . . . . . . . . . . . . . . . . . . 47
7.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . 49
7.4 Conduct of Business and Maintenance of Existence . . . . . . . . . . 49
7.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . 49
7.6 Inspection of Property; Books and Records; Discussions . . . . . . . 49
7.7 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.9 Additional Collateral. . . . . . . . . . . . . . . . . . . . . . . . 51
7.10 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.11 Property Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 53
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PAGE
8.1 Financial Condition Covenants. . . . . . . . . . . . . . . . . . . . 53
8.2 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . 54
8.3 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . . 56
8.4 Limitation on Guarantee Obligations. . . . . . . . . . . . . . . . . 57
8.5 Limitation on Fundamental Changes. . . . . . . . . . . . . . . . . . 58
8.6 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . . . 58
8.7 Limitation on Leases . . . . . . . . . . . . . . . . . . . . . . . . 58
8.8 Limitation on Dividends. . . . . . . . . . . . . . . . . . . . . . . 58
8.9 Limitation on Capital Expenditures . . . . . . . . . . . . . . . . . 59
8.10 Limitation on Investments, Loans and Advances. . . . . . . . . . . . 60
8.11 Limitation on Optional Payments and Modifications of Debt
Instruments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.12 Limitation on Transactions with Affiliates . . . . . . . . . . . . . 62
8.13 Limitation on Sales and Leasebacks . . . . . . . . . . . . . . . . . 62
8.14 Limitation on Changes in Fiscal Year . . . . . . . . . . . . . . . . 62
8.15 Limitation on Negative Pledge Clauses. . . . . . . . . . . . . . . . 62
8.16 Limitation on Lines of Business; Creation of Subsidiaries. . . . . . 62
8.17 Limitation on Borrowings . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 10. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . 66
10.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . 66
10.4 Reliance by Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.6 Non-Reliance on Agent and Other Lenders. . . . . . . . . . . . . . . 67
10.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . 68
10.9 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . 69
11.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
11.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . 71
11.4 Survival of Representations and Warranties . . . . . . . . . . . . . 71
11.5 Payment of Expenses and Taxes. . . . . . . . . . . . . . . . . . . . 71
11.6 Successors and Assigns; Participations and Assignments . . . . . . . 72
11.7 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . . . . . . 74
11.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
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PAGE
11.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.10 Integration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.11 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.12 Submission To Jurisdiction; Waivers. . . . . . . . . . . . . . . . . 75
11.13 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.14 WAIVERS OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . 76
SCHEDULES
A Performance Pricing Grid
1.1 Commitments and Addresses of Lenders
5.14 Subsidiaries
5.16 Environmental Matters
8.2 Existing Indebtedness
8.3 Existing Liens
8.10 Existing Investments
EXHIBITS
A-1 Form of Revolving Credit Note
A-2 Form of Term Note
A-3 Form of Swing Line Note
B Form of Guarantee and Collateral Agreement
C-1 Form of Opinion of Borrower's Counsel
C-2 Form of Opinion of Local Counsel
D Form of Borrowing Certificate
E Form of Assignment and Acceptance
F Terms and Conditions of Senior Subordinated Notes
G Form of Exemption Certificate
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 6, 1998,
among AFTERMARKET TECHNOLOGY CORP., a Delaware corporation (the "BORROWER"), the
several banks and other financial institutions from time to time parties to this
Agreement (the "LENDERS"), CHASE SECURITIES INC., as global arranger (the
"Global Arranger") and THE CHASE MANHATTAN BANK, a New York banking corporation,
as agent for the Lenders hereunder (in such capacity, the "Agent").
WHEREAS, the Borrower, Chase and certain financial institutions are
parties to a Revolving Credit Agreement, dated as of February 14, 1997 (as
amended, the "Existing Credit Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the Existing
Credit Agreement as herein provided;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereto agree that the Existing Credit
Agreement shall be and hereby is amended and restated in its entirety as
follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
For purposes hereof: "PRIME RATE" shall mean the rate of interest per
annum publicly announced from time to time by the Agent as its prime rate
in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by the Chase
Manhattan Bank in connection with extensions of credit to debtors); "BASE
CD RATE" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) a fraction, the numerator of which is one and
the denominator of which is one minus the C/D Reserve Percentage and (b)
the C/D Assessment Rate; "C/D ASSESSMENT RATE" shall mean, for any day, the
annual assessment rate in effect on such day which is payable by a member
of the Bank Insurance Fund maintained by the Federal Deposit Insurance
Corporation (the "FDIC") classified as well-
2
capitalized and within supervisory subgroup "B" (or a comparable
successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.3(d) (or any successor provision) to the FDIC (or any
successor) for the FDIC's (or such successor's) insuring time deposits
at offices of such institution in the United States; "C/D RESERVE
PERCENTAGE" shall mean, for any day, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) (the
"BOARD"), for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board) in
respect of new non-personal time deposits in Dollars having a maturity
of 30 days or more; "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 Agent from
three New York City negotiable certificate of deposit dealers of
recognized standing selected by it; and "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 which is a Business Day, the average of
the quotations for the day of such transactions received by the Agent
from three federal funds brokers of recognized standing selected by it.
Any change in the ABR due to a change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate shall be effective
as of the opening of business on the effective day of such change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate, respectively.
"ABR LOANS": Loans the rate of interest applicable to which is based
upon the ABR.
"ACQUISITION": the acquisition by the Borrower, through Acquisition
Corp., of certain assets of Autocraft pursuant to the Purchase Agreement.
"ACQUISITION CORP": the collective reference to any newly created
acquisition vehicles in connection with the Acquisition.
"ADJUSTMENT DATE": each date on or after June 30, 1998, that is the
second Business Day following receipt by the Agent of both (i) the
financial statements required to be delivered pursuant to subsection 7.1(a)
or 7.1(b), as applicable, for the most recently completed four fiscal
quarters and (ii) the related Compliance Certificate required to be
delivered pursuant to subsection 7.2(b) with respect to such four fiscal
quarters.
3
"AFFILIATE": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.
"AGENT": the Chase Manhattan Bank, together with its affiliates, as
the agent for the Lenders under this Agreement and the other Loan
Documents.
"AGENT'S PAYMENT OFFICE": the Agent's office located at Xxx Xxxxx
Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, or such other office as may be
designated by the Agent by written notice to the Borrower and the Lenders.
"AGGREGATE OUTSTANDING EXTENSIONS OF CREDIT": as to any Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of
all Loans made by such Lender then outstanding, (b) such Xxxxxx's
Commitment Percentage of the aggregate unpaid principal amount at such time
of all Swing Line Loans, and (c) such Lender's Commitment Percentage of the
L/C Obligations then outstanding.
"AGREEMENT": this Amended and Restated Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"APPLICABLE MARGIN": initially, 0% in the case of ABR Loans and 1.00%
in the case of Eurodollar Loans; PROVIDED that, such Applicable Margin
will be adjusted on each Adjustment Date to the applicable rate per annum
set forth under the heading "ABR Applicable Margin" or "Eurodollar
Applicable Margin" on Schedule A which corresponds to the Leverage Ratio
determined based on the financial statements and Compliance Certificate
relating to the end of the four fiscal quarters of the Borrower immediately
preceding such Adjustment Date; PROVIDED that, notwithstanding the
foregoing, for the period from the Closing Date until the first Adjustment
Date to occur after December 31, 1998, the Applicable Margin in respect of
Loans shall not be less than the initial Applicable Margin set forth above;
and PROVIDED, FURTHER, that in the event that the financial statements
required to be delivered pursuant to subsection 7.1(a) or 7.1(b), as
applicable, and the related Compliance Certificate required to be delivered
pursuant to subsection 7.2(b), are not delivered when due, then
(a) if such financial statements and Compliance Certificate are
delivered after the date such financial statements and Compliance
Certificate were required to be delivered (without giving effect to
any applicable cure period) and the Applicable Margin increases from
that previously in effect as a result of the delivery of such
financial statements and Compliance Certificate, then the Applicable
Margin in respect of the Loans during the period from the date upon
which such financial statements and Compliance Certificate were
required to be
4
delivered (without giving effect to any applicable cure period) until
the date upon which they actually are delivered shall, except as
otherwise provided in clause (c) below, be the Applicable Margin as
so increased;
(b) if such financial statements and Compliance Certificate are
delivered after the date such financial statements and Compliance
Certificate were required to be delivered and the Applicable Margin
decreases from that previously in effect as a result of the delivery
of such financial statements and Compliance Certificate, then such
decrease in the Applicable Margin shall not become applicable until
the date upon which such financial statements and Compliance
Certificate actually are delivered; and
(c) if such financial statements and Compliance Certificate are
not delivered prior to the expiration of the applicable cure period,
then, effective upon such expiration, for the period from the date
upon which such financial statements and Compliance Certificate were
required to be delivered (after the expiration of the applicable cure
period) until two Business Days following the date upon which such
financial statements and Compliance Certificate actually are
delivered, the Applicable Margin in respect of the Loans shall be
0.25% per annum, in the case of ABR Loans, and 1.25% per annum, in the
case of Eurodollar Loans.
"APPLICATION": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter
of Credit.
"ASSIGNEE": as defined in subsection 11.6(c).
"AUTOCRAFT": Autocraft Industries, Inc., an Oklahoma corporation.
"AVAILABLE REVOLVING CREDIT COMMITMENT": as to any Lender at any
time, an amount equal to the excess, if any, of (a) the amount of such
Xxxxxx's Revolving Credit Commitment over (b) such Xxxxxx's Revolving
Credit Exposure.
"AURORA": Aurora Capital Partners L.P., a California limited
partnership.
"BANK ASSIGNEE": as defined in subsection 11.6(c).
"BORROWING CERTIFICATE": a certificate of the Borrower, substantially
in the form of Exhibit D.
"BORROWING DATE": any Business Day specified in a notice pursuant to
subsection 2.2 or 2.5 as a date on which the Borrower requests the Lenders
to make Loans hereunder.
"BUSINESS": as defined in subsection 5.16.
5
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close; PROVIDED, that with respect to any borrowings, disbursements and
payments in respect of and calculations, interest rates and Interest
Periods pertaining to Eurodollar Loans, such day is also a day on which
dealings are carried on in the relevant interbank Eurodollar market.
"CANADIAN SUBSIDIARIES": Xxxxxx and King-O-Matic.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"CASH EQUIVALENTS": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of
deposit of any Lender, eurodollar deposits, time deposits, overnight bank
deposits, bankers acceptances and repurchase agreements of any commercial
bank which has capital and surplus in excess of $200,000,000 having
maturities of one year or less from the date of acquisition, (c) commercial
paper of an issuer rated at least A-2 by Standard & Poor's Corporation and
P-2 by Xxxxx'x Investors Service, Inc., or carrying an equivalent rating by
a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments having maturities of six
months or less from the date of acquisition, (d) securities with maturities
of one year or less from the date of acquisition issued or fully guaranteed
by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth
or territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least AA by S&P or Aa by
Moody's, (e) securities with maturities of one year or less from the date
of acquisition fully backed by standby letters of credit issued by any
Lender or any commercial bank in each case satisfying the requirements of
clause (b) of this definition and (f) money market accounts or funds which
invest primarily in the types of securities described in (a) through (c)
above.
"CHANGE OF CONTROL": the occurrence of any of the following events:
(i) any sale, transfer or other conveyance, whether direct or indirect, of
all or substantially all of the assets of the Borrower, on a consolidated
basis, in one transaction or a series of related transactions, if,
immediately after giving effect to such transaction, any Person or "group"
(within the meaning of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended) other than any Excluded Person is or becomes the
"beneficial owner," directly or indirectly, of more than 35% of the total
voting power in the aggregate normally entitled to vote in the election of
directors, managers or trustees, as applicable, of the transferee, (ii) any
Person or "group" (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) other than any Excluded Person
is or becomes the "beneficial owner," directly or indirectly, of more than
35% of the total voting power in the aggregate of all classes of Capital
Stock of the Borrower then
6
outstanding normally entitled to vote in elections of directors, unless
the percentage so owned by Excluded Persons is greater or (iii) during
any period of 12 consecutive months after the Closing Date, individuals
who at the beginning of any such 12 month period constituted the Board
of Directors of the Borrower (together with any new directors whose
election by such Board or whose nomination for election by the
shareholders of the Borrower was approved by a vote of a majority of the
directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Borrower then in office.
"CHASE": The Chase Manhattan Bank, a New York banking corporation.
"CLOSING DATE": the date on which the conditions precedent set forth
in subsection 6.1 shall be satisfied or waived.
"CODE": the Internal Revenue Code of 1986, as amended.
"COLLATERAL": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Agreement.
"COMMERCIAL LETTER OF CREDIT": as defined in subsection 3.1(b)(i)(2).
"COMMITMENTS": the collective reference to the Revolving Credit
Commitments and the Term Loan Commitments.
"COMMITMENT PERCENTAGE": as to any Lender at any time, the percentage
which the sum of (i) the unpaid principal amount of the outstanding Term
Loans held by such Lender at such time and (ii) the Revolving Credit
Commitment of such Lender (or, if the Revolving Credit Commitments have
expired or been terminated, the Revolving Credit Exposure of such Lender)
at such time then constitutes of the sum of (x) the aggregate outstanding
principal amount of the Term Loans held by all Lenders and (y) the
aggregate Revolving Credit Commitments of all Lenders (or, if the Revolving
Credit Commitments have expired or been terminated, the aggregate Revolving
Credit Exposures of all Lenders).
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"COMPLIANCE CERTIFICATE": as defined in subsection 7.2(b).
"CONSOLIDATED CAPITAL EXPENDITURES": of any Person for any period,
the amount of expenditures of such Person, determined on a consolidated
basis in accordance with GAAP (whether accrued under Capital Leases or
otherwise), for such period in respect of the purchase or other acquisition
of fixed or capital assets (excluding any such asset
7
acquired in connection with normal replacement and maintenance programs
properly charged to current operations).
"CONSOLIDATED EBITDA": of any Person for any period, Consolidated Net
Income of such Person for such period PLUS, without duplication and to the
extent reflected as a charge in the statement of such Consolidated Net
Income, the sum of (a) provision for income and franchise tax expense, (b)
Consolidated Interest Expense, (c) depreciation and amortization expense,
(d) amortization of intangibles (including, but not limited to, goodwill),
organization costs and deferred financing costs, (e) writeoff of goodwill
and other non cash charges, including, without limitation, interest expense
representing payment in the form of non-cash "payment-in-kind" instruments,
and (f) any extraordinary losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net
Income, losses on the sales of assets outside of the ordinary course of
business), MINUS, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income, any extraordinary
gains (including, whether or not otherwise includable as a separate item in
the statement of such Consolidated Net Income, gains on the sales of assets
outside of the ordinary course of business).
"CONSOLIDATED INTEREST EXPENSE": of any Person for any period the
amount of cash interest expense, determined on a consolidated basis in
accordance with GAAP, for such period on the aggregate principal amount of
its Indebtedness.
"CONSOLIDATED LEASE EXPENSE": for any Person for any period, the
aggregate amount of fixed and contingent rentals payable by such Person
with respect to such period, determined on a consolidated basis in
accordance with GAAP, for such period with respect to operating leases of
real and personal property.
"CONSOLIDATED NET INCOME": of any Person for any period, net income
of such Person for such period, determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED NET WORTH": of any Person, as of the date of
determination, the sum of (i) all items which in conformity with GAAP would
be included under shareholders' equity on a consolidated balance sheet of
such Person at such date PLUS (ii) mandatorily redeemable preferred stock
of the Borrower which by its terms is not mandatorily redeemable or
redeemable at the option of the holder thereof prior to the Termination
Date.
"CONSOLIDATED TOTAL INDEBTEDNESS": of any Person, as of the date of
determination, all Indebtedness of such Person which, in accordance with
GAAP, would be included as Indebtedness on a consolidated balance sheet of
such Person at such date.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
8
"CSI": Chase Securities Inc.
"DEFAULT": any of the events specified in Section 9, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"ELIGIBLE ACCOUNTS": the gross outstanding balance, determined in
accordance with GAAP and stated on a basis consistent with the historical
practices of the Borrower as of the date hereof, of accounts receivable of
the Borrower and its Subsidiaries arising out of sales of goods or services
made by the Borrower and its Subsidiaries in the ordinary course of
business ("ACCOUNTS") that the Borrower, in its reasonable discretion,
shall deem eligible, less all finance charges, late fees and other fees
that are unearned, and less (i) the value of any accrual which has been
recorded by the Borrower with respect to downward price adjustments and
(ii) such other reserves as the Borrower, in its reasonable discretion,
shall deem appropriate.
"ELIGIBLE INVENTORY": all inventory of the Borrower and its
Subsidiaries ("INVENTORY"), valued at the lower of (i) cost determined in
accordance with GAAP and stated on a basis consistent with the historical
practices of the Borrower as of the date hereof or (ii) market value, that
the Borrower, in its reasonable discretion, shall deem eligible, reduced by
(x) the value of reserves which have been recorded by the Borrower with
respect to obsolete, slow-moving or excess Inventory and (y) such other
reserves as the Borrower, in its reasonable discretion, shall deem
appropriate.
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability
or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by the Agent.
"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
rate at which Chase is
9
offered Dollar deposits at or about 10:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its Eurodollar Loans are then
being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to
the amount of its Eurodollar Loan to be outstanding during such Interest
Period.
"EURODOLLAR LOANS": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR TRANCHE": the collective reference to Eurodollar Loans
the then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"EVENT OF DEFAULT": any of the events specified in Section 9,
PROVIDED that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"EXCLUDED PERSON": (a) the Borrower or any wholly-owned Subsidiary
which is a Guarantor, (b) any employee benefit plan of the Borrower or any
wholly owned Subsidiary which is a Guarantor or any trustee or similar
fiduciary holding Capital Stock of the Borrower for or pursuant to the
terms of any such plan and (c) all Related Persons of the Borrower as of
the Closing Date and any Person that becomes a Related Person of such
Related Person thereafter.
"EXISTING CREDIT AGREEMENT": as defined in the recitals hereto.
"EXTENSION OF CREDIT": as to any Lender, (a) the making of a
Revolving Credit Loan, a Term Loan or a Swing Line Loan by such Lender or
(b) the issuance of, or participation in, a Letter of Credit by such
Xxxxxx.
"FINANCING LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
10
"GLOBAL ARRANGER": CSI, as the arranger of the Commitments under this
Agreement and the other Loan Documents.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTEE AND COLLATERAL AGREEMENT": the guarantee and collateral
agreement to be executed and delivered by the Borrower and its domestic
Subsidiaries, substantially in the form of Exhibit B, as the same may be
amended, supplemented or otherwise modified from time to time.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "PRIMARY OBLIGATIONS") of any other third Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; PROVIDED,
HOWEVER, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person as of any date of determination shall be deemed to be the lower of
(a) an amount equal to the then stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made
and (b) the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith.
"GUARANTOR": any Person delivering a guarantee pursuant to the
Guarantee and Collateral Agreement.
"HEDGING AGREEMENT": with respect to any Person, any interest
rate or currency exchange rate swap agreement, interest or currency
exchange rate future, interest or currency exchange rate option,
interest or currency exchange rate cap
11
or other interest or currency rate hedge arrangement, to or under which
such Person is a party or a beneficiary.
"INDEBTEDNESS": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than trade liabilities and accrued expenses
incurred in the ordinary course of business and payable not more than 12
months after the incurrence thereof in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by
a note, bond, debenture or similar instrument, (c) all obligations of such
Person under Financing Leases, (d) all obligations of such Person in
respect of acceptances issued or created for the account of such Person,
(e) all liabilities secured by any Lien on any property owned by such
Person whether or not such Person has not assumed or otherwise become
liable for the payment thereof, (f) unreimbursed drawings under letters of
credit and (g) for the purposes of subsection 8.2 (other than clauses (a)
through (f) and (i) thereof) and 9(e) only, all obligations or liabilities
under Hedging Agreements, PROVIDED that for the purposes of subsection
9(e), the "principal amount" of the obligations of such Person in respect
of any Hedging Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that such Person would be
required to pay if such Hedging Agreement were terminated at such time.
For the purposes of any financial calculation hereunder, the amount of any
Indebtedness at any date shall be the principal or similar primary amount
of such obligation on such date, including capitalized interest (i.e.,
indebtedness issued in lieu of cash payment of interest or interest on
which interest is accruing) and capitalized payment obligations with
respect thereto, in each such case, as of such date.
"INDENTURES": as defined in subsection 5.20.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period and (c) as to
any Eurodollar Loan having an Interest Period longer than three months,
each day which is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest Period.
"INTEREST PERIOD": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three, six or, if available to all Lenders,
nine months thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with
respect thereto; and
12
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three, six or, if available to all Lenders, nine
months thereafter, as selected by the Borrower by irrevocable notice
to the Agent not less than three Business Days prior to the last day
of the then current Interest Period with respect thereto;
PROVIDED that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date; and
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month.
"ISSUING LENDER": Chase or one of its Affiliates or another Lender or
Lenders designated by the Borrower and the Agent.
"KING-O-MATIC": King-O-Matic Industries Limited, a Canadian
subsidiary of the Borrower.
"L/C OBLIGATIONS": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit
which have not then been reimbursed pursuant to subsection 3.4(a).
"L/C PARTICIPANTS": the collective reference to all the Lenders
holding Revolving Credit Commitments other than the Issuing Lender.
"LETTERS OF CREDIT": as defined in subsection 3.1(a).
"LEVERAGE RATIO": as of the end of each fiscal quarter of the
Borrower, with respect to the Borrower and its Subsidiaries on a
consolidated basis, the ratio of Consolidated Total Indebtedness as of such
date to Consolidated EBITDA for the four fiscal quarters of the Borrower
then ended; PROVIDED that for purposes of calculating Consolidated EBITDA
of the Borrower and its Subsidiaries for any period for inclusion in the
Leverage Ratio for the purposes of subsection 8.1(a) only, (i) the
Consolidated
13
EBITDA of any Person acquired by the Borrower or its Subsidiaries during
such period shall be included on a PRO FORMA basis for such period
(assuming the consummation of such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred on the
first day of such period) if the consolidated balance sheet of such
acquired Person and its consolidated Subsidiaries as at the end of the
period preceding the acquisition of such Person and the related
consolidated statements of income and stockholders' equity and of cash
flows for the period in respect of which Consolidated EBITDA is to be
calculated (x) have been previously provided to the Agent and the
Lenders and (y) either (A) have been reported on without a qualification
arising out of the scope of the audit by independent certified public
accountants of nationally recognized standing or (B) have been found
acceptable by the Agent (it being agreed that, for the purposes of
determining such PRO FORMA Consolidated EBITDA in connection with the
Acquisition, the Consolidated EBITDA of the OEM Division shall be deemed
to be $4,375,000 for each fiscal quarter of 1997 and $3,500,000 for the
period from January 1, 1998 through March 6, 1998), and (ii) the
Consolidated EBITDA of any Person (or attributable to assets
constituting a significant business unit) disposed of by the Borrower or
its Subsidiaries during such period shall be excluded on a PRO FORMA
basis for such period (assuming the consummation of such disposition in
connection therewith occurred on the first day of such period).
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever which makes
any property or asset available for the payment or performance of any
liability in priority to the payment or performance of ordinary, unsecured
creditors (including, without limitation, any conditional sale or other
title retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
"LOAN": any loan made by any Lender pursuant to this Agreement.
"LOAN DOCUMENTS": this Agreement, the Notes, the Applications, the
Security Agreements and any Hedging Agreement to which any Lender is a
party in respect of any Loans made hereunder.
"LOAN PARTIES": the Borrower and each Subsidiary which is a party to
a Loan Document.
"MASCOT": Mascot Truck Parts Inc., a Canadian subsidiary of the
Borrower.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement, any of the Notes or any Application or
any of the other Loan Documents or the material rights or remedies of the
Agent or the Lenders hereunder or thereunder.
14
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NEW LENDING OFFICE": as defined in subsection 4.13(b).
"NET PROCEEDS": with respect to any sale, transfer or other
disposition of any property or asset of the Borrower or any of its
Subsidiaries, the net amount equal to the aggregate amount received in cash
(including any cash received by way of deferred payment pursuant to a note
receivable, other non-cash consideration or otherwise, but only as and when
such cash is so received) in connection with such asset sale MINUS the sum
of (i) the principal amount of Indebtedness which is secured by any such
asset (other than Indebtedness assumed by the purchaser of such asset) and
which is required to be, and is, repaid in connection with the sale or
disposition thereof (other than Indebtedness outstanding hereunder), (ii)
the reasonable fees (including, without limitation, reasonable attorneys'
fees), commissions and other out-of-pocket expenses (as evidenced by
supporting documentation provided to the Agent and as reasonably approved
by the Agent) incurred by the Borrower in connection with such asset sale
and (iii) federal, state and local taxes incurred by the Borrower in
connection with such sale, whether payable at such time or thereafter.
"1994 SENIOR SUBORDINATED NOTES": the senior subordinated notes due
2004, in aggregate principal amount at any time outstanding not exceeding
$90,000,000, issued by the Borrower pursuant to the Indenture dated as of
August 2, 1994.
"1995 SENIOR SUBORDINATED NOTES": the senior subordinated notes due
2004, in aggregate principal amount at any time outstanding not exceeding
$30,000,000, issued by the Borrower pursuant to the Indenture dated as of
June 1, 1995.
"NON-EXCLUDED TAXES": as defined in subsection 4.13(a).
"NON-U.S. LENDER": as defined in subsection 4.13(b).
"NOTES": the collective reference to the Revolving Credit Notes, the
Term Notes and the Swing Line Note.
"OEM DIVISION": the collective reference to the assets acquired
pursuant to the Acquisition.
"PARTICIPANT": as defined in subsection 11.6(b).
15
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"PERSON": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PROHIBITED TRANSACTION": a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under
Section 4975 of the Code or Section 408 of ERISA, respectively.
"PROPERTIES": as defined in subsection 5.16.
"PURCHASE AGREEMENT": the Purchase Agreement, dated as of February
10, 1998, between Acquisition Corp. and Autocraft.
"REGISTER": as defined in subsection 11.6(d).
"REGULATION U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"REIMBURSEMENT OBLIGATION": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to subsection 3.4(a) for amounts
drawn under Letters of Credit.
"RELATED PERSON": (a) any Person who controls, is controlled by or
under common control with such Excluded Person; PROVIDED, HOWEVER, that for
purposes of this definition "control" means the beneficial ownership of
more than 50% of the total voting power of a Person normally entitled to
vote in the election of directors, managers or trustees, as applicable of a
Person, (b) as to any natural person, (i) such person's spouse, parents and
descendants (whether by blood or adoption, and including stepchildren) and
the spouses of any of such natural persons and (ii) any corporation,
partnership, trust or other Person in which no one has any interest
(directly or indirectly) except for any of such natural person, such
spouse, parents and descendants (whether by blood or adoption, and
including stepchildren) and the spouses of any of such natural persons and
(c) Aurora and any investment funds controlled by Xxxxxx.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under
16
subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section 4043.
"REQUIRED LENDERS": at any time, Lenders holding more than 50% of the
sum of (i) the aggregate unpaid principal amount of the Term Loans and (ii)
the aggregate Revolving Credit Commitments or, if the Revolving Credit
Commitments have been terminated, the aggregate Revolving Credit Exposures
of all Lenders.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, the president,
the treasurer or the chief financial officer of the Borrower.
"REVOLVING CREDIT COMMITMENT": as to any Lender, the obligation of
such Lender to make Revolving Credit Loans to and/or issue or participate
in Letters of Credit on behalf of the Borrower in a principal amount not to
exceed the amount set forth opposite such Xxxxxx's name on Schedule 1.1, as
such amount may be reduced from time to time in accordance with the
provisions of this Agreement.
"REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any Lender at any
time, the percentage which such Xxxxxx's Revolving Credit Commitment then
constitutes of the aggregate Revolving Credit Commitments (or, at any time
after the Revolving Credit Commitments shall have expired or been
terminated, the percentage which the aggregate principal amount of such
Xxxxxx's Revolving Credit Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Credit Loans then outstanding).
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and including
the Closing Date to but not including the Termination Date or such earlier
date on which the Revolving Credit Commitments shall terminate as provided
herein.
"REVOLVING CREDIT EXPOSURE" shall mean with respect to any Lender, at
any time, the sum of (a) the aggregate outstanding principal amount of such
Xxxxxx's Revolving Credit Loans at such time, plus (b) such Xxxxxx's
Revolving Credit Commitment Percentage of the L/C Obligations, plus (c)
such Lender's Revolving Credit Commitment Percentage of the Swing Line
Loans outstanding at such time; PROVIDED that, for purposes of calculating
Available Revolving Credit Commitments for the purposes of subsection
4.1(a), the amount of Swing Line Loans shall be deemed to be zero.
"REVOLVING CREDIT LENDER": a Lender with a Revolving Credit
Commitment or an outstanding Revolving Credit Loan.
"REVOLVING CREDIT LOANS": as defined in subsection 2.1(a).
17
"REVOLVING CREDIT NOTES": as defined in subsection 4.2(e).
"SECURITY AGREEMENTS": the collective reference to the Guarantee and
Collateral Agreement, any mortgages and all other security documents
hereafter delivered to the Agent granting a Lien on any asset or assets of
any Person to secure the obligations and liabilities of the Borrower
hereunder or under any of the other Loan Documents or to secure any
guarantee of any such obligations and liabilities.
"SENIOR SUBORDINATED NOTES": the collective reference to the 1994
Senior Subordinated Notes and the 1995 Senior Subordinated Notes.
"SENIOR SUBORDINATED NOTE INDENTURE": each of the respective
Indentures described in the definitions of "1994 Senior Subordinated Notes"
and "1995 Senior Subordinated Notes".
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"SOLVENT" and "SOLVENCY": with respect to any Person on a particular
date, the condition that on such date, (a) the fair value of the property
of such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature, and (d)
such Person is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which such Person's property
would constitute an unreasonably small amount of capital.
"SPECIFIED PREFERRED STOCK": any preferred stock of the Borrower (as
designated in the Borrower's charter documents in effect on the date
hereof) issued to common stockholders from time to time (i) compliance with
the terms of which would not violate or be inconsistent with any of the
provisions of this Agreement and (ii) which does not have any mandatory
payment, dividend, redemption or similar covenants.
"STANDBY LETTER OF CREDIT": as defined in paragraph 3.1(b)(i)(1).
"SUBSIDIARY": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower and,
in any case, shall include Acquisition Corp. after
18
giving effect to the Acquisition.
"SWING LINE COMMITMENT": the Swing Line Lender's obligation to make
Swing Line Loans pursuant to subsection 2.6(a).
"SWING LINE LENDER": Chase in its capacity as provider of the Swing
Line Loans.
"SWING LINE LOANS": as defined in subsection 2.6(a).
"SWING LINE NOTE": as defined in subsection 2.6(b).
"TERM LOAN COMMITMENT": with respect to each Lender, the commitment,
if any, of such Lender to make a Term Loan hereunder on the Closing Date in
a principal amount not to exceed the amount set forth opposite such
Xxxxxx's name on Schedule 1.1.
"TERM LOAN LENDER": a Lender with a Term Loan Commitment or an
outstanding Term Loan.
"TERM LOANS": as defined in subsection 2.4.
"TERM NOTE": as defined in subsection 4.2(e).
"TERMINATION DATE": December 31, 2003.
"TRANSFEREE": as defined in subsection 11.6(f).
"TYPE": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"UNIFORM CUSTOMS": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"U.K. SUBSIDIARIES": U.K. Holdings and Automotive Developments, Ltd.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in the Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this
19
Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF CREDIT COMMITMENTS
2.1 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans (each a "REVOLVING CREDIT LOAN", collectively, "REVOLVING
CREDIT LOANS") to the Borrower from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Revolving Credit Xxxxxx's Revolving Credit Commitment
Percentage of the then outstanding L/C Obligations and Swing Line Loans (after
giving effect to any repayment of Swing Line Loans at the time of the making of
such Revolving Credit Loans), does not exceed the amount of such Revolving
Credit Xxxxxx's Revolving Credit Commitment.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by the Borrower and notified to the Agent in accordance with subsections 2.2 or
4.5, as applicable, PROVIDED that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the Termination Date.
During the Revolving Credit Commitment Period the Borrower may use the Revolving
Credit Commitments by borrowing, prepaying the Revolving Credit Loans in whole
or in part, and reborrowing, all in accordance with the terms and conditions
hereof.
2.2 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, PROVIDED that the Borrower shall give the
Agent, except as expressly set forth in subsections 3.4 and 4.9, irrevocable
notice (which notice must be received by the Agent prior to 12:00 noon, New York
City time, (a) three Business Days prior to the requested Borrowing Date, if all
or any part of the requested Loans are to be initially Eurodollar Loans or (b)
on the day of the requested Borrowing Date, otherwise), specifying (i) the
amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the
borrowing is to be of Eurodollar Loans, ABR Loans or a combination thereof and
(iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Periods therefor. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to $1,000,000 or a whole multiple of
$500,000 in excess thereof (or, if the then aggregate Available Revolving Credit
Commitments are less than $500,000, such lesser amount). Upon receipt of any
such notice from the Borrower, the Agent shall promptly notify each Revolving
Credit Lender thereof. Each Revolving Credit Lender will make the amount of its
pro rata share of each borrowing available to the Agent for the account of the
Borrower at the office of the Agent specified in subsection 11.2 prior to 1:00
P.M., New York City time, on the Borrowing Date requested by the Borrower in
funds immediately available to the Agent, PROVIDED that, the Borrower shall give
the Agent and the Revolving Credit Lenders irrevocable notice by 11:00 A.M. New
York City time one Business Day before the requested Borrowing
20
Date, if the Closing Date is a Borrowing Date, and on such date each
Revolving Credit Lender shall make such funds available to the Agent prior to
10:00 A.M., New York City time. Such borrowing will then be made available
to the Borrower by the Agent crediting the account of the Borrower on the
books of such office with the aggregate of the amounts made available to the
Agent by the Revolving Credit Lenders and in like funds as received by the
Agent.
2.3 TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS. The
Borrower shall have the right, upon not less than five Business Days' notice to
the Agent, to terminate the Revolving Credit Commitments or, from time to time,
to reduce the amount of the Revolving Credit Commitments. Any such reduction
shall be in an amount equal to $1,000,000 or a whole multiple of $1,000,000 in
excess thereof and shall reduce permanently the applicable Revolving Credit
Commitments then in effect, PROVIDED that no such termination or reduction shall
be permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans and Swing Line Loans made on the effective date thereof,
the aggregate principal amount of the Revolving Credit Loans then outstanding,
when added to the then outstanding L/C Obligations and the then outstanding
Swing Line Loans, would exceed the Revolving Credit Commitments then in effect.
2.4 TERM LOANS. Subject to the terms and conditions hereof each Term
Loan Lender severally agrees to make a term loan (a "TERM LOAN") to the Borrower
on the Closing Date in an amount not to exceed the amount of such Xxxxxx's Term
Loan Commitment. The Term Loans may be (a) Eurodollar Loans, (b) ABR Loans or
(c) a combination thereof, as determined by the Borrower and notified to the
Agent in accordance with subsections 2.5 and 4.5.
2.5 PROCEDURE FOR TERM LOAN BORROWING. The Borrower shall give the
Agent irrevocable telephonic notice (promptly confirmed in writing), which
notice must be received by the Agent prior to 11:00 A.M., New York time, one
Business Day prior to the anticipated Closing Date, requesting that the Term
Loan Lenders make the Term Loans on the Closing Date and specifying the amount
to be borrowed. The Term Loans made on the Closing Date shall initially be ABR
Loans and no Term Loan may be converted into or continued as a Eurodollar Loan
having an Interest Period in excess of one month until the date that is 90 days
after the Closing Date. Upon receipt of such notice the Agent shall promptly
notify each Term Loan Lender thereof. Not later than 10:00 A.M., New York time,
on the Closing Date, each Term Loan Lender shall make available to the Agent at
the Agent's Payment Office an amount in immediately available funds equal to the
Term Loan or Term Loans to be made by such Lender. The Agent shall credit the
account of the Borrower on the books of such office of the Agent with the
aggregate of the amounts made available to the Agent by the Term Loan Lenders in
immediately available funds (or, in the event that the Borrower specifies in the
notice a different account to which such amounts should be transferred, the
Agent shall transfer, by wire transfer, to such account the aggregate amount
made available to the Agent by the Term Loan Lenders in immediately available
funds).
2.6 SWING LINE COMMITMENTS. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make swing line loans (individually, a
"SWING LINE LOAN"; collectively, the "SWING LINE LOANS") to the Borrower from
time to time during the Revolving
21
Credit Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed $5,000,000, PROVIDED that at no time may the sum of
the then outstanding Swing Line Loans, Revolving Credit Loans and L/C
Obligations exceed the Revolving Credit Commitments then in effect. Amounts
borrowed by the Borrower under this subsection 2.6 may be repaid and, through
but excluding the Termination Date, reborrowed. All Swing Line Loans shall
be made as ABR Loans and shall not be entitled to be converted into
Eurodollar Loans. The Borrower shall give the Swing Line Lender irrevocable
notice (which notice must be received by the Swing Line Lender prior to 3:00
p.m., New York City time) on the requested Borrowing Date specifying the
amount of the requested Swing Line Loan which shall be in an amount equal to
$250,000 or a whole multiple of $50,000 in excess thereof. The proceeds of
the Swing Line Loan will be made available by the Swing Line Lender to the
Borrower at the office of the Swing Line Lender by crediting the account of
the Borrower at such office with such proceeds in Dollars.
(b) The Borrower agrees that, upon the request to the Agent by the
Swing Line Lender made on or prior to the Closing Date or in connection with any
assignment pursuant to subsection 11.6, to evidence the Swing Line Loans the
Borrower will execute and deliver to the Swing Line Lender a promissory note
substantially in the form of Exhibit A-3, with appropriate insertions (as the
same may be amended, supplemented, replaced or otherwise modified from time to
time, the "SWING LINE NOTE"), payable to the order of the Swing Line Lender and
representing the obligation of the Borrower to pay the amount of the Swing Line
Commitment or, if less, the unpaid principal amount of the Swing Line Loans made
to the Borrower, with interest thereon as prescribed in subsection 4.7. The
Swing Line Note shall (a) be dated the Closing Date, (b) be stated to mature on
the Termination Date and (c) provide for the payment of interest in accordance
with subsection 4.7.
(c) The Swing Line Lender, at any time in its sole and absolute
discretion may, and, at any time as there shall be a Swing Line Loan outstanding
for more than seven Business Days, the Swing Line Lender shall, on behalf of the
Borrower (which hereby irrevocably directs and authorizes the Swing Line Lender
to act on its behalf), request each Revolving Credit Lender, including the Swing
Line Lender, to make a Revolving Credit Loan as an ABR Loan in an amount equal
to such Revolving Credit Lender's Revolving Credit Commitment Percentage of the
principal amount of all of the Swing Line Loans (the "REFUNDED SWING LINE
LOANS") outstanding on the date such notice is given; PROVIDED that the
provisions of this subsection shall not affect the obligations of the Borrower
to prepay Swing Line Loans in accordance with the provisions of subsection 4.4.
Unless the Commitments shall have expired or terminated for any reason,
including but not limited to, the occurrence of any of the events described in
paragraph (f) of Section 9 hereof with respect to the Borrower (in which event
the procedures of paragraph (d) of this subsection 2.6 shall apply), each Lender
will make the proceeds of its Revolving Credit Loan available to the Agent for
the account of the Swing Line Lender at the office of the Agent prior to 12:00
Noon, New York City time, in funds immediately available on the Business Day
next succeeding the date such notice is given. The proceeds of such Revolving
Credit Loans shall be immediately applied to repay the Refunded Swing Line
Loans.
(d) If the Revolving Credit Commitments shall expire or terminate (for
any reason, including but not limited to the occurrence of any of the events
described in paragraph (f) of Section 9 hereof with respect to the Borrower) at
any time while Swing Line Loans are
22
outstanding, each Revolving Credit Lender shall, at the option of the Swing
Line Lender, either (i) notwithstanding the expiration or termination of the
Revolving Credit Commitments, make a Revolving Credit Loan as an ABR Loan
(which Revolving Credit Loan shall be deemed a "Revolving Credit Loan" for
all purposes of this Agreement and the other Loan Documents) or (ii) purchase
an undivided participating interest in such Swing Line Loans, in either case
in an amount equal to such Xxxxxx's Revolving Credit Commitment Percentage
determined on the date of, and immediately prior to, expiration or
termination of the Revolving Credit Commitments of the aggregate principal
amount of such Swing Line Loans. Each Lender will make the proceeds of any
Revolving Credit Loan made pursuant to the immediately preceding sentence
available to the Agent for the account of the Swing Line Lender at the office
of the Agent prior to 12:00 Noon, New York City time, in funds immediately
available on the Business Day next succeeding the date on which the Revolving
Credit Commitments expire or terminate. The proceeds of such Revolving
Credit Loans shall be immediately applied to repay the Swing Line Loans
outstanding on the date of termination or expiration of the Revolving Credit
Commitments. In the event that the Lenders purchase undivided participating
interests pursuant to the first sentence of this paragraph (d), each Lender
shall immediately transfer to the Swing Line Lender, in immediately available
funds, the amount of its participation.
(e) Whenever, at any time after the Swing Line Lender has received
from any Lender such Lender's participating interest in a Swing Line Loan and
the Swing Line Lender receives any payment on account thereof, the Swing Line
Lender will distribute to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded); PROVIDED, HOWEVER, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Lender will return to the
Swing Line Lender any portion thereof previously distributed by the Swing Line
Lender to it.
(f) Notwithstanding anything herein to the contrary, the Swing Line
Lender shall not be obligated to make any Swing Line Loan if the conditions set
forth in subsection 6.2 have not been satisfied.
SECTION 3. LETTERS OF CREDIT
3.1 L/C COMMITMENT. (a) Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Lenders set forth
in subsection 3.3(a), agrees to issue letters of credit ("LETTERS OF CREDIT")
for the account of the Borrower on any Business Day during the Revolving Credit
Commitment Period in such form as may be approved from time to time by the
Issuing Lender; PROVIDED that the Issuing Lender shall have no obligation to
issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed $10,000,000 or (ii) the aggregate Available Revolving
Credit Commitments of all Lenders would be less than zero.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be either (1) a
23
standby letter of credit issued to support obligations of the Borrower
and its Subsidiaries, contingent or otherwise, incurred in the
ordinary course of its business (a "STANDBY LETTER OF CREDIT"), or (2)
a commercial letter of credit issued to provide a primary means of
payment in respect of the purchase of goods or services by the
Borrower and its Subsidiaries in the ordinary course of business (a
"COMMERCIAL LETTER OF CREDIT"); and
(ii) expire no later than the earlier of (x) the date that
is 12 months after the date of its issuance and (y) the fifth Business
Day prior to the Termination Date.
(c) Each Letter of Credit shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of New York.
(d) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
(e) As of the Closing Date, any and all letters of credit issued and
outstanding under the Existing Credit Agreement shall be deemed to have been
issued hereunder and be deemed Letters of Credit for all purposes hereof.
3.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may reasonably request. Upon receipt of any Application, the
Issuing Lender will process such Application and the certificates, documents and
other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall issue the Letter of Credit
requested thereby not later than four Business Days (or such later date as the
Borrower shall request) after its receipt of the Application therefor and all
such other certificates, documents and other papers and information relating
thereto as the Issuing Lender may reasonably request (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower promptly
following the issuance thereof.
3.3 L/C PARTICIPATIONS. (a) The Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Commitment Percentage in the Issuing Lender's
obligations and rights under each Letter of Credit issued hereunder and the
amount of each draft paid by the Issuing Lender
24
thereunder. Each L/C Participant unconditionally and irrevocably agrees with
the Issuing Lender that, if a draft is paid under any Letter of Credit for
which the Issuing Lender is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such L/C Participant shall pay
to the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Revolving Credit
Commitment Percentage of the amount of such draft, or any part thereof, which
is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to subsection 3.3(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii)the daily average
Federal Funds Effective Rate (as defined in the definition of ABR in subsection
1.1) during the period from and including the date such payment is required to
be made to the date on which such payment is made available to the Issuing
Lender, times (iii) a fraction the numerator of which is the number of days that
elapse during such period and the denominator of which is 360. If any such
amount required to be paid by any L/C Participant pursuant to subsection 3.3(a)
is not in fact made available to the Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, the Issuing
Lender shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per annum
applicable to ABR Loans hereunder. A certificate of the Issuing Lender
submitted to any L/C Participant with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with subsection 3.3(a), the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by the Issuing Lender), or any payment of interest on account thereof, the
Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; PROVIDED, HOWEVER, that in the event that any such payment received by
the Issuing Lender shall be required to be returned by the Issuing Lender, such
L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
3.4 REIMBURSEMENT OBLIGATION OF THE BORROWER. (a) The Borrower agrees
to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Lender for the amount of (i) such draft
so paid and (ii) any taxes, fees, charges or other costs or expenses incurred by
the Issuing Lender in connection with such payment. Each such payment shall be
made to the Issuing Lender at its address for notices specified herein in
Dollars and in immediately available funds.
(b) Interest shall be payable on any and all amounts remaining unpaid
by the Borrower under this subsection from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the rate which would be payable on any outstanding ABR Loans which were then
overdue.
25
(c) Each drawing under any Letter of Credit shall constitute a request
by the Borrower to the Agent for a borrowing pursuant to subsection 2.2 of ABR
Loans in the amount of such drawing. The requirement of one Business Day's
prior notice for an ABR Loan set forth in subsection 2.2 shall not apply to any
borrowing under this subsection 3.4 in respect of a drawing under any Letter of
Credit. The Borrowing Date with respect to such borrowing shall be the date of
such drawing.
3.5 OBLIGATIONS ABSOLUTE. (a) To the fullest extent permitted by
applicable law, the Borrower agrees that the Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender or any beneficiary of a
Letter of Credit.
(b) To the fullest extent permitted by applicable law, the Borrower
also agrees with the Issuing Lender that the Issuing Lender shall not be
responsible for, and the Borrower's Reimbursement Obligations under subsection
3.4(a) shall not be affected by (i) the validity or genuineness of documents or
of any endorsements thereon, even though such documents shall in fact prove to
be invalid, fraudulent or forged, or (ii) any dispute between or among the
Borrower and any beneficiary of any Letter of Credit or any other party to which
such Letter of Credit may be transferred or (iii) any claims whatsoever of the
Borrower against any beneficiary of such Letter of Credit or any such
transferee.
(c) To the fullest extent permitted by applicable law, the Borrower
agrees that the Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Xxxxxx's gross negligence or willful
misconduct.
(d) To the fullest extent permitted by applicable law, the Borrower
agrees that any action taken or omitted by the Issuing Lender under or in
connection with any Letter of Credit or the related drafts or documents, if done
in the absence of gross negligence or willful misconduct and in accordance with
the standards of care specified in the Uniform Commercial Code of the State of
New York, shall be binding on the Borrower and shall not result in any liability
of the Issuing Lender to the Borrower.
3.6 LETTER OF CREDIT PAYMENTS. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower and each L/C Participant of the date and amount thereof. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
3.7 APPLICATION. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this
26
Section 3 shall apply.
SECTION 4. GENERAL PROVISIONS APPLICABLE
TO LOANS AND LETTERS OF CREDIT
4.1 FEES. (a) The Borrower agrees to pay to the Agent for the account
of each Revolving Credit Lender a fee for the period from and including the
Closing Date to the Termination Date, at the rate indicated on Schedule A hereto
corresponding to the Leverage Ratio in effect from time to time (as adjusted in
a manner corresponding to the adjustments to Applicable Margin set forth in the
definition thereof) on the average daily Available Revolving Credit Commitment
of such Revolving Credit Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June, September and
December and on the Termination Date, PROVIDED that for the period from the
Closing Date to the first Adjustment Date to occur after December 31, 1998, the
commitment fee rate shall be .375%.
(b) The Borrower shall pay to the Agent, for the account of the
Issuing Lender a fronting fee with respect to each Letter of Credit computed at
a rate per annum equal to 1/8 of 1% on the daily average undrawn amount of such
Letter of Credit. Such fronting fee shall be payable quarterly in arrears on
the last day of each March, June, September and December and on the Termination
Date and shall be nonrefundable.
(c) The Borrower shall pay to the Agent, for the account of the
Issuing Lender and the L/C Participants, a letter of credit commission with
respect to each Letter of Credit on the daily average undrawn amount of such
Letter of Credit, computed at a rate per annum equal to the Applicable Margin
for Loans which are Eurodollar Loans. Such fee shall be payable to the L/C
Participants and the Issuing Lender to be shared ratably among them in
accordance with their respective Revolving Credit Commitment Percentages. Such
commissions shall be payable quarterly in arrears on the last day of each March,
June, September and December and on the Termination Date and shall be
nonrefundable.
(d) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
(e) The Borrower agrees to pay to Chase the amounts set forth in the
Fee Letter dated February 6, 1998, among Chase, CSI and the Borrower, in the
amounts and on the dates set forth therein.
4.2 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower hereby
unconditionally promises to pay (i) to the Agent for the account of each
Revolving Credit Lender the then unpaid principal amount of each Revolving
Credit Loan of such Revolving Credit Lender, on the Termination Date (or such
earlier date on which the Revolving Credit Loans become due and payable pursuant
to Section 9) and (ii) to the Agent for the account of each Term Loan Lender the
then unpaid principal amount of each Term Loan of such Term Loan
27
Lender as provided in subsection 4.3. The Borrower hereby further agrees to
pay interest on the unpaid principal amount of the Loans made to it from time
to time outstanding from the date hereof until payment in full thereof at the
rates per annum, and on the dates, set forth in subsection 4.7.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Agent, acting for this purpose as an agent of the Borrower,
shall maintain the Register pursuant to subsection 11.6(d) and a subaccount
therein for each Lender, in which shall be recorded (i) the amount of each Loan
made hereunder, the Type thereof and, in the case of Eurodollar Loans, each
Interest Period applicable thereto, (ii) each continuation thereof and each
conversion of all or a portion thereof to another Type, (iii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iv) both the amount of any sum received
by the Agent hereunder from the Borrower and each Xxxxxx's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 4.2(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, HOWEVER, that the
failure of any Lender or the Agent to maintain the Register or any such account,
as the case may be, or any error therein, shall not in any manner affect any of
the obligations of the Borrower hereunder, including, without limitation, the
obligation to repay (with applicable interest) the Loans made to the Borrower by
such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon request to the Agent by any
Lender, the Borrower will execute and deliver to such Lender (i) a promissory
note of the Borrower evidencing the Revolving Credit Loans of such Lender,
substantially in the form of Exhibit A-1, with appropriate insertions as to date
and principal amount (a "REVOLVING CREDIT NOTE") and/or (ii) a promissory note
of the Borrower evidencing the Term Loan of such Lender, substantially in the
form of Exhibit A-2, with appropriate insertions as to date and principal amount
(a "TERM NOTE"), payable to the order of such Lender and representing the
obligation of the Borrower to pay a principal amount equal to the aggregate
unpaid principal amount of all Revolving Credit Loans and/or Term Loans of such
Lender, with interest on the unpaid principal amount thereof from time to time
outstanding under such Note(s) as set forth in subsection 4.7. A Note and the
obligations evidenced thereby may be assigned or otherwise transferred in whole
or in part only by registration of such assignment or transfer of such Note and
the obligations evidenced thereby in the Register (and each Note shall expressly
so provide). Any assignment or transfer of all or part of the obligations
evidenced by a Note shall be registered in the Register only upon surrender for
registration of assignment or transfer of the Note evidencing such obligations,
accompanied by an Assignment and Acceptance substantially in the form of Exhibit
E duly executed by the Assignor thereof, and thereupon one or more new Notes
shall be issued to the designated Assignee and the old Note shall be returned by
the Agent to the Borrower marked
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"cancelled." No assignment of a Note and the obligations evidenced thereby
shall be effective unless it shall have been recorded in the Register by the
Agent as provided in this subsection 4.2(e). Each Lender is hereby authorized
to record the date, Type and amount of each Loan made by such Lender, each
continuation thereof, each conversion of all or a portion thereof to another
Type, the date and amount of each payment or repayment of principal thereof
and, in the case of Eurodollar Loans, the length of each Interest Period with
respect thereto, on the schedule annexed to and constituting a part of any
Note requested by it to evidence such Loan, and any such recordation shall
constitute PRIMA FACIE evidence of the accuracy of the information so
recorded, PROVIDED that the failure by any Lender to make any such
recordation or any error in any such recordation shall not in any manner
affect any of the obligations of the Borrower hereunder, including, without
limitation, the obligation to repay (with applicable interest) the Loans made
to the Borrower by such Lender in accordance with the terms of this Agreement.
4.3 AMORTIZATION OF TERM LOANS. (a) Subject to adjustment pursuant to
clause (c) of this subsection, the Borrower shall repay Term Loans on each date
set forth below in the aggregate principal amount of Dollars set forth opposite
such date:
DATE AMOUNT
---- ------
September 30, 1998 $5,000,000
December 31, 1998 $5,000,000
March 31, 1999 $3,750,000
June 30, 1999 $3,750,000
September 30, 1999 $3,750,000
December 31, 1999 $3,750,000
March 31, 2000 $5,000,000
June 30, 2000 $5,000,000
September 30, 2000 $5,000,000
December 31, 2000 $5,000,000
March 31, 2001 $6,250,000
June 30, 2001 $6,250,000
September 30, 2001 $6,250,000
December 31, 2001 $6,250,000
March 31, 2002 $6,250,000
June 30, 2002 $6,250,000
September 30, 2002 $6,250,000
December 31, 2002 $6,250,000
March 31, 2003 $6,250,000
June 30, 2003 $6,250,000
September 30, 2003 $6,250,000
December 31, 2003 $6,250,000
(b) To the extent not previously paid, all Term Loans shall be due and
payable on the Termination Date (or on such earlier date on which the Term Loans
become due and payable pursuant to Section 9).
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(c) Any prepayment of a Term Loan pursuant to subsection 4.4 shall be
applied to reduce the subsequent scheduled repayments of the Term Loans to be
made by the Borrower pursuant to this subsection as set forth in subsection 4.4.
(d) Each repayment or prepayment of a Term Loan shall be applied
ratably to the Term Loans of each Lender included in the repaid Term Loan.
4.4 OPTIONAL AND MANDATORY PREPAYMENTS. (a) The Borrower may at any
time and from time to time prepay the Loans made to it, in whole or in part,
without premium or penalty, upon at least three Business Days' in the case of
Eurodollar Loans, or same day Business Day's in the case of ABR Loans (including
Swing Line Loans), irrevocable notice to the Agent, specifying whether the
prepayment is (i) of Revolving Credit Loans, Term Loans or Swing Line Loans, or
a combination thereof, and in each case if a combination thereof, the amount
allocable to each, (ii) the date and amount of prepayment of such Loan(s) and
(iii) whether the prepayment is of Eurodollar Loans, ABR Loans or a combination
thereof, and, if of a combination thereof, the amount allocable to each. Upon
receipt of any such notice the Agent shall promptly notify each affected Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with any amounts
payable pursuant to subsection 4.14 and, in the case of prepayments of the Term
Loans only, accrued interest to such date on the amount prepaid. Partial
optional prepayments of the Term Loans shall be applied to the remaining
installments of principal thereof ratably based on the remaining amounts
thereof. Partial voluntary prepayments shall be in an aggregate principal
amount of $500,000 or a whole multiple of $500,000 in excess thereof.
(b) If at any time the sum of the Revolving Credit Loans, the Swing
Line Loans and the L/C Obligations exceeds the Revolving Credit Commitments, the
Borrower shall make a payment in the amount of such excess which payment shall
be applied FIRST, to the payment of the Swing Line Loans then outstanding,
SECOND, to the payment of any Revolving Credit Loans then outstanding, THIRD, to
payment of any Reimbursement Obligations then outstanding and LAST, to cash
collateralize any outstanding Letters of Credit on terms reasonably satisfactory
to the Required Lenders. The application of prepayments of Loans referred to in
the preceding sentence shall be made first to ABR Loans and second to Eurodollar
Loans.
(c) If, subsequent to the Closing Date, the Borrower or any of its
Subsidiaries shall receive Net Proceeds from any asset sale or other disposition
(including as a result of condemnation or casualty) permitted by subsection
8.6(b), then 100% of such Net Proceeds shall, on the first Business Day after
receipt thereof, be applied toward the prepayment of the Term Loans and, after
all Term Loans have been repaid, to the permanent reduction of the Revolving
Credit Commitments by an amount equal thereto and, to the extent required by
subsection 4.4(b), to the payment of Loans and cash collateralization of Letters
of Credit as set forth therein; PROVIDED that such Net Proceeds shall not be
required to be so applied to the extent the Borrower delivers to the Agent a
certificate that it intends to use such Net Proceeds to acquire fixed or capital
assets for the Borrower or any of its Subsidiaries within 330 days of receipt of
such Net Proceeds, it being expressly agreed that any Net Proceeds not so
reinvested shall be applied to prepay the Loans and permanently reduce the
Commitments on the date 330 days after the receipt thereof; and PROVIDED FURTHER
that such Net Proceeds shall not be required to be so applied
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until such Net Proceeds not applied hereunder exceed $2,500,000 in the
aggregate, at which time all of such unapplied Net Proceeds shall be applied
as set forth herein. Any Net Proceeds applied toward the prepayment of the
Term Loans pursuant to this subsection 4.4(c) shall be applied ratably to the
remaining installments outstanding of principal thereof.
(d) In the event of a Change of Control, not later than five days
thereafter, (A) the Revolving Credit Commitments shall be terminated, (B) the
Borrower shall prepay in full all Loans then outstanding together with interest
accrued to the date of such prepayment and any amounts payable under subsection
4.14, (C) the Borrower shall repay any Reimbursement Obligations then
outstanding and (D) the Borrower shall cash collateralize any outstanding L/C
Obligations on terms reasonably satisfactory to the Required Lenders.
4.5 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the Agent
at least one Business Day's prior irrevocable notice of such election, PROVIDED
that any such conversion may only be made on the last day of an Interest Period
with respect thereto. The Borrower may elect from time to time to convert ABR
Loans to Eurodollar Loans by giving the Agent at least three Business Days'
prior irrevocable notice of such election. Any such notice of conversion to
Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Agent shall
promptly notify each affected Lender thereof. All or any part of outstanding
Eurodollar Loans and ABR Loans may be converted as provided herein, PROVIDED
that (i) no Loan may be converted into a Eurodollar Loan when any Event of
Default has occurred and is continuing and the Agent has or the Required Lenders
have determined that such a conversion is not appropriate and (ii) no Loan may
be converted into a Eurodollar Loan after the date that is one month prior to
the Termination Date (in the case of conversions of Revolving Credit Loans) or
the date of the final installment of principal of the Term Loans.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in subsection 1.1, of the length of the next
Interest Period to be applicable to such Loans; PROVIDED that no Eurodollar Loan
may be continued as such (i) when any Event of Default has occurred and is
continuing and the Agent has or the Required Lenders have determined that such a
continuation is not appropriate or (ii) after the date that is one month prior
to, respectively, the Termination Date (in the case of continuations of
Revolving Credit Loans) or the date of the final installment of principal of the
Term Loans and PROVIDED, FURTHER, that if the Borrower shall fail to give such
notice or if such continuation is not permitted such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period.
4.6 MAXIMUM NUMBER OF TRANCHES. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be made pursuant to such elections so that, after giving effect
thereto, the aggregate number of Eurodollar Tranches outstanding at any time
shall not exceed twelve.
4.7 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan shall
bear
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interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest for each day at a rate per annum
equal to the ABR for such day plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any Loan or
Reimbursement Obligation, (ii) any interest payable thereon or (iii) any
commitment fee or (iv) any other amount payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum which is (x) in the case of
overdue principal, the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this subsection plus 2% or (y) in the case of
overdue interest, commitment fee or other amount, the rate described in
paragraph (b) of this subsection plus 2%, in each case from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
4.8 COMPUTATION OF INTEREST AND FEES. (a) Commitment fees, Letter of
Credit fees and, whenever it is calculated on the basis of the Prime Rate
component of the ABR, interest shall be calculated on the basis of a 365- (or
366-, as the case may be) day year for the actual days elapsed; and, otherwise,
interest shall be calculated on the basis of a 360-day year for the actual days
elapsed. The Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Agent shall as soon as practicable
notify the Borrower and the Lenders of the effective date and the amount of each
such change in interest rate.
(b) To the fullest extent permitted by applicable law, each
determination of an interest rate by the Agent pursuant to any provision of this
Agreement shall be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error. The Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the Agent in
determining any interest rate pursuant to subsection 4.7(a), (b) or (c).
4.9 INABILITY TO DETERMINE INTEREST RATE. If prior to the first day
of any Interest Period, (i) the Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or (ii)
the Agent shall have received notice from the Required Lenders that the
Eurodollar Rate determined for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such Interest
Period, the Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans,
32
(y) any Loans that were to have been converted on the first day of such
Interest Period to Eurodollar Loans shall be converted to or continued as ABR
Loans and (z) any outstanding Eurodollar Loans with respect to which the
Interest Period shall have expired shall be converted, on the first day of
such Interest Period, to ABR Loans. Until such notice has been withdrawn by
the Agent, no further Eurodollar Loans shall be made or continued as such,
nor shall the Borrower have the right to convert ABR Loans to Eurodollar
Loans.
4.10 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee hereunder and any reduction of the Revolving Credit
Commitments of the Lenders shall be made (in each case, other than in respect of
the Swing Line Loans) pro rata according to the respective Revolving Credit
Commitment Percentages of the Lenders. Each payment (including each prepayment)
by the Borrower on account of principal of and interest on the Loans (other than
the Swing Line Loans) shall be made pro rata according to the respective
outstanding principal amounts of the Loans then held by the Lenders. All
payments (including prepayments) to be made by the Borrower hereunder, whether
on account of principal, interest, fees or otherwise, shall be made without set
off or counterclaim and shall be made prior to 12:00 Noon, New York City time,
on the due date thereof to the Agent, for the account of the Lenders, at the
Agent's office specified in subsection 11.2, in Dollars and in immediately
available funds. The Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received. If any payment hereunder
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day, and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate
during such extension.
(b) Unless the Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make the amount that would
constitute its Revolving Credit Commitment Percentage of such borrowing
available to the Agent, the Agent may assume that such Lender is making such
amount available to the Agent, and the Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
amount is not made available to the Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Agent. A certificate of the Agent submitted to any Lender with respect to
any amounts owing under this subsection shall be conclusive in the absence of
manifest error. If such Xxxxxx's Revolving Credit Commitment Percentage of such
borrowing is not made available to the Agent by such Lender within three
Business Days of such Borrowing Date, the Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans hereunder, on demand, from the Borrower.
4.11 ILLEGALITY. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law (other than a requirement of
the Certificate of Incorporation, By-Laws or other organizational or governing
documents of the relevant Lender) or in the interpretation or application
thereof (except as aforesaid) shall make it unlawful for any Lender to make or
maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment
of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as
such and convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and
(b) such
33
Xxxxxx's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to ABR Loans on the respective last days of the then
current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs
on a day which is not the last day of the then current Interest Period with
respect thereto, the Borrower agrees to pay to such Lender such amounts, if any,
as may be required pursuant to subsection 4.14.
4.12 REQUIREMENTS OF LAW. (a) If the adoption of or any change in any
Requirement of Law (other than a requirement of the Certificate of
Incorporation, By-Laws or other organizational or governing documents of the
relevant Lender) or in the interpretation or application thereof (except as
aforesaid) or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority having jurisdiction over such Lender made subsequent to the date
hereof (or, in the case of any Lender that becomes a party hereto after the
Closing Date, subsequent to the date on which such party becomes a Lender):
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded Taxes
covered by subsection 4.13 and changes in the rate of tax on the overall
net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender, on
an after-tax basis, for such increased cost or reduced amount receivable.
(b) If any Lender shall have determined in good faith that the
adoption of or any change in any Requirement of Law (other than a requirement of
the Certificate of Incorporation, By-Laws or other organizational or governing
documents of the relevant Lender) regarding capital adequacy or in the
interpretation or application thereof (except as aforesaid) or compliance by
such Lender or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of law)
from any Governmental Authority made subsequent to the date hereof (or, in the
case of any Lender that becomes a party hereto after the Closing Date,
subsequent to the date on which such party becomes a Lender) shall have the
effect of reducing the rate of return on such Xxxxxx's or such
34
corporation's capital as a consequence of its obligations hereunder or under
any Letter of Credit to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be
material, then the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender, on an after-tax basis, for such
reduction, PROVIDED that the Borrower shall be not be obligated to compensate
any Lender pursuant to this subsection 4.12 for amounts accruing prior to the
date which is 90 days before the Borrower is notified of such event, it being
understood that such notice need not include a computation of amounts in
respect thereof.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Borrower, through the
Agent, of the event by reason of which it has become so entitled. A certificate
as to any additional amounts payable pursuant to this subsection 4.12 submitted
by such Lender, through the Agent, to the Borrower shall, to the fullest extent
permitted by applicable law, be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
4.13 TAXES. (a) All payments made by the Borrower under this
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Agent or any Lender as a result of a
present or former connection between the Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or the Notes). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings ("NON-EXCLUDED TAXES") are
required to be withheld from any amounts payable to the Agent or any Lender
hereunder or under the Notes, the amounts so payable to the Agent or such Lender
shall be increased to the extent necessary to yield to the Agent or such Lender
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement and
the Notes, PROVIDED, HOWEVER, that the Borrower shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this subsection. Whenever any
Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the Lenders for
any incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. The agreements in this
subsection shall survive the termination of this Agreement and the payment of
the Notes and all other amounts payable hereunder.
35
(b) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation or partnership created or organized
under the laws of the United States of America, or any estate that is subject to
Federal income taxation regardless of the source of its income or any trust
which is subject to the supervision of a court within the United States and the
control of a United States fiduciary as described in section 7701(a)(30) of the
Code (a "NON-U.S. LENDER") shall deliver to the Borrower and the Agent two
copies of either U.S. Internal Revenue Service Form 1001 or Form 4224, or, in
the case of a Non-U.S. Lender claiming exemption from U.S. Federal withholding
tax under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest", a 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 in the form of Exhibit G, representing that such Non-U.S. Lender is
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 U.S.
Federal withholding tax on all payments by the Borrower under this Agreement and
the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender
on or before the date it becomes a party to this Agreement (or, in the case of 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 subsection 4.13(b), a Non-U.S.
Lender that has previously complied with this subsection 4.13(b) shall not be
required to deliver any Form 1001 or Form 4224 pursuant to this subsection
4.13(b) that such Non-U.S. Lender is not legally able to deliver.
4.14 INDEMNITY. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may
reasonably sustain or incur as a consequence of (a) default by the Borrower in
making a borrowing of, conversion into or continuation of Eurodollar Loans after
the Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement or (b) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification shall be an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. In the event that the Borrower defaults in making any prepayment after
the Borrower has given a notice thereof in accordance with the provisions of
this Agreement, any Eurodollar Loans in respect of which such notice has been
given shall be converted automatically
36
to ABR Loans on the date such prepayment would have been made pursuant to
such notice. This covenant shall survive the termination of this Agreement
and the payment of the Notes and all other amounts payable hereunder until
the second anniversary of such termination and payment.
4.15 CHANGE OF LENDING OFFICE. Each Lender agrees that if it makes
any demand for payment under subsection 4.12 or 4.13(a), it shall use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, as
determined in its sole discretion) to designate a different lending office if
the making of such a designation would reduce or obviate the need for the
Borrower to make payments under subsection 4.12 or 4.13(a).
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Agent and each Lender to enter into this Agreement and
to make the Extensions of Credit requested to be made by it (including the
initial Extension of Credit requested to be made by it on the Closing Date), the
Borrower hereby represents and warrants, on the Closing Date and on every
Borrowing Date thereafter, to the Agent and each Lender that:
5.1 FINANCIAL CONDITION. (a) (i) the consolidated balance sheets of
the Borrower and its consolidated Subsidiaries as of December 31, 1995 and
December 31, 1996 and the related consolidated statements of income and of cash
flows for the fiscal years ended on such dates, reported on by Xxxxx & Xxxxx,
copies of which have heretofore been furnished to each Lender, are complete and
correct and present fairly the consolidated financial condition of the Borrower
and its consolidated Subsidiaries as at such dates, and the consolidated results
of their operations and their consolidated cash flows for the fiscal years then
ended, (ii) the consolidated balance sheet of the OEM Division as of June 30,
1997 and the related consolidated statements of income and of cash flows for the
fiscal year ended on such date, copies of which have heretofore been furnished
to each Lender, are complete and correct and present fairly the consolidated
financial condition of the OEM Division as at such date, and the consolidated
results of its operations and its consolidated cash flows for the fiscal year
then ended, (iii) the unaudited consolidated balance sheets of the Borrower and
its consolidated Subsidiaries as at September 30, 1997 and the related unaudited
consolidated statements of income and of cash flows for the nine-month period
ended on such date, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the nine-month period then ended (subject
to normal year-end audit adjustments) and (iv) the unaudited balance sheet of
the OEM Division as at December 31, 1997 and the related unaudited consolidated
statement of income and of cash flows for the six-month period ended on such
date, certified by a Responsible Officer, copies of which have heretofore been
furnished to each Lender, are complete and correct and present fairly the
financial condition of the OEM Division as at such date, and the results of its
operations and its cash flows for the six-month period then ended (subject to
normal year-end audit adjustments). All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved by
such accountants or
37
Responsible Officer, as the case may be, and as disclosed therein). Neither
the Borrower nor any of its consolidated Subsidiaries had, at the date of the
most recent balance sheet referred to above, any material Guarantee
Obligation, contingent liability or liability for taxes, or any long-term
lease or other material agreement or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in the foregoing statements or
in the notes thereto. During the period from December 31, 1996 to and
including the Closing Date there has been no sale, transfer or other
disposition by the Borrower or any of its consolidated Subsidiaries of any
material part of its business or property and, no purchase or other
acquisition of any business or property (including any capital stock of any
other Person) material in relation to the consolidated financial condition of
the Borrower and its consolidated Subsidiaries at December 31, 1996 of which
the Agent and the Lenders have not been made aware in writing by the Borrower.
(b) The PRO FORMA balance sheet of the Borrower and its consolidated
Subsidiaries (the "PRO FORMA BALANCE SHEET"), copies of which have heretofore
been furnished to each Lender, is the balance sheet of the Borrower and its
consolidated Subsidiaries as of December 31, 1997 (the "PRO FORMA DATE"),
adjusted to give effect (as if such events had occurred on such date) to (i) the
repayment in full of all loans under, and all other amounts due in respect of,
the Existing Credit Agreement, (ii) the consummation of the Acquisition and
(iii) the making of the Loans and other extensions of credit hereunder to be
made on the Closing Date and the application of the proceeds thereof as
contemplated hereby.
5.2 NO CHANGE; SOLVENCY. Since December 31, 1996, there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect. As of the Closing Date, the Borrower and its
Subsidiaries are Solvent, on a consolidated basis and on an individual basis.
5.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Borrower
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law (other than Requirements of Law with respect to which representations as to
compliance are made in subsections 5.13 and 5.16) except to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
5.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and in the case of
the Borrower, to borrow hereunder and the Borrower has taken all necessary
corporate action to authorize the borrowings on the terms and conditions of this
Agreement, the Applications and the Notes, and each Loan Party has authorized
the execution, delivery and performance of the Loan Documents to which it is a
party. No consent or authorization of, filing with, notice to or other act by
or in respect of, any
38
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity
or enforceability of the Loan Documents to which any Loan Party is a party
(other than the filing of UCC financing statements, which have, to the extent
then necessary to perfect the Liens provided for in the Security Agreements,
been duly filed). This Agreement has been duly executed and delivered on
behalf of the Borrower, and each other Loan Document will be duly executed
and delivered on behalf of each Loan Party thereto. This Agreement
constitutes, and each other Loan Document to which the Borrower or any other
Loan Party is a party, when executed and delivered, will constitute, a legal,
valid and binding obligation of the Borrower and such other Loan Party
enforceable against the Borrower and such other Loan Party in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally (including, without limitation,
laws respecting fraudulent transfers and preferential transfers) and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
5.5 NO LEGAL BAR. The execution, delivery and performance of the Loan
Documents to which any Loan Party is a party, the borrowings hereunder and the
use of the proceeds thereof will not violate any Requirement of Law or any
material provision of any material Contractual Obligation or, to the knowledge
of the Borrower, any other provision of any Contractual Obligation of the
Borrower or of any of its Subsidiaries, in each such case the effect of which
would be to cause a Material Adverse Effect and will not result in, or require,
the creation or imposition of any Lien on any of its or their respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation (other than pursuant to the Loan Documents).
5.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby or (b) which could reasonably be
expected to have a Material Adverse Effect.
5.7 NO DEFAULT. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
5.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its
Subsidiaries has good record and valid title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by subsection 8.3.
5.9 INTELLECTUAL PROPERTY. The Borrower and each of its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the
39
"INTELLECTUAL PROPERTY"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property
or the validity or effectiveness of any such Intellectual Property, nor does
the Borrower know of any valid basis for any such claim that could reasonably
be expected to have a Material Adverse Effect. The Borrower has no
knowledge, nor any reason to know, that the use of such Intellectual Property
by the Borrower and its Subsidiaries infringes on the rights of any Person,
except for such claims and infringements that, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
5.10 TAXES. Each of the Borrower and its Subsidiaries has filed or
caused to be filed all Federal and material other tax returns which, to the
knowledge of the Borrower, are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than any (i) the amount
or validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the Borrower or its Subsidiaries, as the case may be or
(ii) imposed by any Governmental Authority other than the Federal Government the
non-payment of which could not reasonably be expected to give rise to any
Material Adverse Effect); no tax Lien has been filed, and, to the knowledge of
the Borrower, no claim is being asserted, with respect to any such tax, fee or
other charge other than any such Lien or claim by any Governmental Authority
which could not reasonably be expected to have a Material Adverse Effect.
5.11 FEDERAL REGULATIONS. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation G or Regulation U of the
Board (as such term is defined herein in the definition of "ABR") as now and
from time to time hereafter in effect or for any purpose which violates the
provisions of the Regulations of such Board. If requested by any Lender or the
Agent, the Borrower will furnish to the Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-1 or FR Form
U-1 referred to in said Regulation G or Regulation U, as the case may be.
5.12 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied with the applicable provisions of ERISA and the Code where the
failure to so comply could reasonably be expected to have a Material Adverse
Effect. No termination of a Single Employer Plan has occurred so as to subject,
directly or indirectly, any asset of the Borrower or any Commonly Controlled
Entity to any liability, contingent or otherwise, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period. The present value of
the accrued benefit obligations under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefit
obligations. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither the
Borrower nor any Commonly Controlled Entity
40
would become subject to any liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent. The present value (determined using actuarial
and other assumptions which are reasonable in respect of the benefits
provided and the employees participating) of the liability of the Borrower
and each Commonly Controlled Entity for post retirement benefits to be
provided to their current and former employees under Plans which are welfare
benefit plans (as defined in Section 3(1) of ERISA) does not, in the
aggregate, exceed the assets under all such Plans allocable to such benefits.
5.13 INVESTMENT COMPANY ACT; OTHER REGULATIONS. The Borrower is not
an "investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
5.14 SUBSIDIARIES. The Subsidiaries listed on Schedule 5.14 hereto
constitute all the Subsidiaries of the Borrower on the Closing Date.
5.15 PURPOSE OF LOANS. The proceeds of the Revolving Credit Loans
shall be used by the Borrower to (i) refinance indebtedness under the Existing
Credit Agreement and (ii) finance the continuing working capital requirements
and general corporate purposes of the Borrower and its Subsidiaries in the
ordinary course of business, including permitted acquisitions permitted pursuant
to subsection 8.10 hereof. The proceeds of the Term Loans shall be used by the
Borrower to finance the Acquisition, to refinance certain existing indebtedness
in connection therewith and to pay fees and expenses related thereto. None of
the proceeds of the Revolving Credit Loans or the Term Loans shall be used to
finance the acquisition of any company the shares of which are traded on a
public exchange unless, prior to or concurrently with the consummation of such
acquisition, the board of directors, or equivalent governing body, of the
company to be so acquired has approved such acquisition.
5.16 ENVIRONMENTAL MATTERS. Except as disclosed on Schedule 5.16
hereto, (a) the facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "PROPERTIES") do not contain, and have
not previously contained, any Materials of Environmental Concern in amounts or
concentrations (i) which constitute or constituted a violation of, or could
reasonably be expected to give rise to liability under, any Environmental Law
and (ii) which could reasonably be expected to have a Material Adverse Effect.
(b) The Properties and all operations at the Properties are in
compliance, and have been in compliance, in all material respects, with all
applicable Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any Environmental Law with respect to the
Properties or the business operated by the Borrower or any of its Subsidiaries
(the "BUSINESS") which could reasonably be expected to have a Material Adverse
Effect.
(c) Neither the Borrower nor any of its Subsidiaries has received any
notice of
41
violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental
Laws with regard to any of the Properties or the Business that could
reasonably be expected to have a Material Adverse Effect, nor does the
Borrower have knowledge or reason to believe that any such notice will be
received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
which could reasonably be expected to give rise to liability under, any
Environmental Law and that could reasonably be expected to have a Material
Adverse Effect, nor have any Materials of Environmental Concern been generated,
treated, stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that could reasonably be expected to give rise to
liability under, any applicable Environmental Law and that could reasonably be
expected to have a Material Adverse Effect.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named as
a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business and that could
reasonably be expected to have a Material Adverse Effect.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation of or in
amounts or in a manner that could reasonably be expected to give rise to
liability under Environmental Laws and that could reasonably be expected to have
a Material Adverse Effect.
5.17 NO BURDENSOME RESTRICTIONS. No Requirement of Law or Contractual
Obligation of the Borrower or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
5.18 NO MATERIAL MISSTATEMENTS. The written information, reports,
financial statements, exhibits and schedules furnished by or on behalf of the
Borrower and each other Loan Party to the Agent and the Lenders in connection
with the negotiation of any Loan Document or included therein or delivered
pursuant thereto do not contain, and will not contain as of the Closing Date,
any material misstatement of fact and do not, taken as a whole, omit, and will
not, taken as a whole, omit as of the Closing Date, to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not materially misleading.
5.19 COLLATERAL. The provisions of each of the Security Agreements,
when executed and delivered, will constitute in favor of the Agent for the
ratable benefit of the Lenders, a legal, valid and enforceable security interest
in all right, title, and interest of the Borrower and any of the other Loan
Parties which is a party to such Security Agreement, as the
42
case may be, in the Collateral described in such Security Agreement. As of
the Closing Date, all Equipment and Inventory (as each of such terms is
defined in the Guarantee and Collateral Agreement) of the Borrower and each
of its Subsidiaries will be kept at, or will be in transit to, the locations
listed on Schedule 5.19, and when financing statements have been filed in the
offices in the jurisdictions listed in Schedule 3 to the Guarantee and
Collateral Agreement, when appropriate filings have been made in the U.S.
Patent and Trademark Office and the U.S. Copyright Office, and when such
other actions as are described in each of the Security Agreements have been
taken in accordance with the Security Agreements, each of the Security
Agreements shall constitute a perfected security interest in all right, title
and interest of the Borrower or such other Loan Parties, as the case may be,
in the Collateral described therein, and except for Liens existing on the
Closing Date which are permitted by subsection 8.3 and whose priority cannot
be superseded by the provisions hereof or of any Security Agreement and the
filings hereunder or thereunder, a perfected first lien on, and security
interest in, all right, title and interest of the Borrower or such other Loan
Parties, as the case may be, in the Collateral described in each Security
Agreement.
5.20 SENIOR DEBT. The unpaid principal of and interest on the Loans
and the Reimbursement Obligations and all other obligations and liabilities of
each of the Borrower and the other Loan Parties pursuant to this Agreement and
the other Loan Documents shall constitute "Senior Debt" of the Borrower under
the Senior Subordinated Notes and the indentures related thereto (the
"INDENTURES") and this Agreement and the other Loan Documents shall collectively
constitute the "Credit Agreement" as such term is defined in such indentures.
SECTION 6. CONDITIONS PRECEDENT
6.1 CONDITIONS TO EXTENSIONS OF CREDIT. This Agreement, including,
without limitation, the agreement of each Lender to make the Extensions of
Credit requested to be made by it hereunder, shall become effective on the date
on which the following conditions precedent shall have been satisfied or waived:
(a) LOAN DOCUMENTS. The Agent shall have received (i) this Agreement,
executed and delivered by a duly authorized officer of the Borrower, with a
counterpart for each Lender, (ii) the Guarantee and Collateral Agreement,
executed and delivered by a duly authorized officer of each party thereto,
with a counterpart or a conformed copy for each Lender and (iii) for the
account of each of the Lenders which has requested a Note, a Revolving
Credit Note, Term Note or a Swing Line Note, as the case may be, each
conforming to the requirements hereof and executed and delivered by a duly
authorized officer of the Borrower.
(b) REPAYMENT OF INDEBTEDNESS. All outstanding indebtedness and other
obligations of the Borrower and its Subsidiaries under the Existing Credit
Agreement shall have been paid in full, including, without limitation, all
interest and fees owing with respect to such indebtedness.
(c) FINANCIAL STATEMENTS. The Agent shall have received, with a copy
for each
43
Lender, (i) the financial statements referred to in subsection 5.1(a) and
(ii) the PRO FORMA balance sheet of the Borrower and its Subsidiaries
referred to in subsection 5.1(b), which shall be in form and substance
satisfactory to the Lenders.
(d) SOLVENCY CERTIFICATE. The Agent shall have received a certificate
reasonably satisfactory in form and substance to it from the Borrower's
Chief Financial Officer which shall document the solvency of the Borrower
and its Subsidiaries on a combined basis taken as a single entity after
giving effect to the consummation of the transactions (including the
Acquisition) and the financings contemplated hereby.
(e) FEES. The Agent shall have received the fees to be received on
the Closing Date referred to in subsection 4.1.
(f) LEGAL OPINIONS. The Agent shall have received, with a counterpart
for each Lender, the following executed legal opinions:
(i) the executed legal opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP
counsel to the Borrower and the other Loan Parties, substantially in
the form of Exhibit C-1;
(ii) the executed legal opinion of special local counsel of the
Borrower, in such jurisdictions as the Agent shall request,
substantially in the form of Exhibit C-2; and
(iii) the executed legal opinion of counsel to Xxxxxxxxx, if any,
delivered in connection with the Acquisition, accompanied by reliance
letters in favor of the Lenders.
(g) ACQUISITION. The Acquisition shall have been consummated for an
aggregate purchase price not exceeding $125,000,000 pursuant to
documentation reasonably satisfactory to the Agent in all material
respects, and no provision thereof shall have been waived, amended,
supplemented or otherwise modified in any material respect.
(h) FEES AND EXPENSES. The Agent shall have received satisfactory
evidence that the fees and expenses incurred, and to be incurred, in
connection with the Acquisition shall not exceed $7,000,000 in the
aggregate.
(i) APPROVALS. All governmental and third party approvals (including
landlords' and other consents) necessary or, in the discretion of the
Agent, advisable in connection with the Acquisition, the financing
contemplated hereby and the continuing operations of the Borrower and its
Subsidiaries shall have been obtained and be in full force and effect, and
all applicable waiting periods shall have expired without any action being
taken or threatened by any competent authority which would restrain,
prevent or otherwise impose adverse conditions on the Acquisition or the
financing thereof.
(j) ENVIRONMENTAL ASSESSMENT. The Agent shall have received a
satisfactory environmental assessment with respect to the real property
owned or leased by Xxxxxxxxx
44
and its Subsidiaries from a firm satisfactory to the Agent.
(k) ACTIONS TO PERFECT LIENS. The Agent shall have received evidence
in form and substance satisfactory to it that all filings, recordings,
registrations and other actions, including, without limitation, the
delivery of original stock certificates together with undated stock powers
executed in blank and the filing of duly executed financing statements on
form UCC-1, necessary or, in the opinion of the Agent, desirable to perfect
the Liens created by the Security Agreements delivered on the Closing Date
shall have been completed.
(l) LIEN SEARCHES. The Agent shall have received the results of a
recent search in each relevant jurisdiction, with respect to the Borrower,
Autocraft and their respective Subsidiaries, of the Uniform Commercial Code
filings which may have been filed with respect to the Borrower, Autocraft
or their respective Subsidiaries, and such search shall reveal no liens on
any of the assets of the Borrower, Autocraft or their respective
Subsidiaries except for liens permitted by subsection 8.3 or liens to be
discharged on or prior to the Closing Date pursuant to documentation
satisfactory to the Agent.
(m) BORROWING CERTIFICATE. The Agent shall have received, with a
counterpart for each Lender, a Borrowing Certificate dated the Closing
Date, with appropriate insertions and attachments satisfactory in form and
substance to the Agent, executed by a Responsible Officer of the Borrower.
(n) CORPORATE PROCEEDINGS OF THE LOAN PARTIES. The Agent shall have
received, with a counterpart for each Lender, a copy of the resolutions, in
form and substance satisfactory to the Agent, of the Board of Directors of
each Loan Party authorizing (i) the execution, delivery and performance of
this Agreement, the Notes and the other Loan Documents delivered on the
Closing Date to which it is or will be a party, (ii) the borrowings
contemplated hereunder and (iii) the granting by it of the Liens created
pursuant to the Security Agreements delivered on the Closing Date to which
it is or will be a party, certified by the Secretary or an Assistant
Secretary of such Loan Party as of the Closing Date, which certificate
shall be in form and substance satisfactory to the Agent and shall state
that the resolutions thereby certified have not been amended, modified,
revoked or rescinded.
(o) LOAN PARTY INCUMBENCY CERTIFICATES. The Agent shall have
received, with a counterpart for each Lender, a Certificate of each Loan
Party, dated the Closing Date, as to the incumbency and signature of the
officers of such Loan Party executing any Loan Document delivered on the
Closing Date satisfactory in form and substance to the Agent, executed by
the President or any Vice President and the Secretary or any Assistant
Secretary of such Loan Party.
(p) CORPORATE DOCUMENTS. The Agent shall have received, with a
counterpart for each Lender, true and complete copies of the certificate of
incorporation and by-laws of each Loan Party to any Loan Document delivered
on the Closing Date, certified as of the Closing Date as complete and
correct copies thereof by the Secretary or an Assistant
45
Secretary of the such Loan Party.
(q) INSURANCE. The Agent shall have received evidence in form and
substance satisfactory to it that all of the requirements of subsection 7.5
hereof shall have been satisfied.
(r) ADDITIONAL MATTERS. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents
shall be reasonably satisfactory in form and substance to the Agent, and
the Agent shall have received such other documents and legal opinions in
respect of any aspect or consequence of the transactions contemplated
hereby or thereby as it shall reasonably request.
6.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any Extension of Credit requested to be made by it on any date
(including, without limitation, the initial Extension of Credit) is subject to
the satisfaction or waiver of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Borrower and each of its Subsidiaries in or pursuant
to the Loan Documents shall be true and correct in all material respects on
and as of such date as if made on and as of such date (except to the extent
that such representations and warranties were expressly made only as of a
specific date).
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
(c) LETTER OF CREDIT APPLICATIONS. With respect to the issuance of
any Letter of Credit, the Issuing Lender shall have received an
Application, completed to its reasonable satisfaction and duly executed by
a Responsible Officer.
(d) BORROWING CERTIFICATE. The Agent shall have received, with a
counterpart for each Lender, a borrowing certificate dated the requested
Borrowing Date, with appropriate insertions and attachments satisfactory in
form and substance to the Agent, executed by a Responsible Officer.
(e) DEBT INCURRENCE COMPLIANCE CERTIFICATE. If, on any requested
Borrowing Date, the sum of (i) the aggregate unpaid principal amount of the
Term Loans and (ii) the aggregate Revolving Credit Exposures of all
Lenders, after giving effect to the Extensions of Credit requested to be
made on such Borrowing Date, exceeds 90% of the Borrowing Base (as such
term is defined in the Indentures) as determined in the most recent
calculation thereof delivered pursuant to subsection 7.2(f), the Agent
shall have received a calculation of the Borrowing Base as at such
requested Borrowing Date, together with a certificate of a Responsible
Officer of the Borrower, dated the requested Borrowing Date, demonstrating
that the aggregate Extensions of Credit after giving effect
46
to the Revolving Credit Loans requested to be made on such Borrowing
Date will not exceed the Borrowing Base calculated as at such date,
PROVIDED that if the foregoing would not be sufficient to demonstrate
that such Extensions of Credit can be made in compliance with the
applicable terms of the Indentures, such Borrowing Base calculation and
certificate shall not be so required, so long as either (x) the total
amount of such requested Extensions of Credit, when added to the total
amount of any other Extensions of Credit and the total amount of
Indebtedness and Disqualified Capital Stock (each as defined in the
Indenture) incurred after the date of the latest calculation of the
Total Incurrence Amount (as defined in subsection 7.2(f)), does not
exceed 90% of such Total Incurrence Amount or (y) the Agent shall have
received a certificate of a Responsible Officer of the Borrower, dated
the requested Borrowing Date, demonstrating that the applicable
Consolidated Coverage Ratio (as such term is defined in the Indentures)
of the Borrower after giving effect to such Extensions of Credit as set
forth in the Indentures satisfies the relevant terms thereof.
Each borrowing by and each issuance of a Letter of Credit on behalf of the
Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such Loan or issuance that the conditions contained
in this subsection 6.2 have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Loan or Letter of Credit remains outstanding and unpaid or any other
amount is owing to any Lender or the Agent hereunder, it shall and (except in
the case of delivery of financial information, reports and notices) shall cause
each of its Subsidiaries to:
7.1 FINANCIAL STATEMENTS. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of
such year and the related consolidated and consolidating statements of
income and retained earnings and of cash flows for such year, setting forth
in each case in comparative form the figures for the previous year,
reported on without a "going concern" or like qualification or exception,
or qualification arising out of the scope of the audit, by Xxxxx & Young or
other independent certified public accountants of nationally recognized
standing not unacceptable to the Required Lenders; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and retained
earnings and of cash flows of the Borrower and its consolidated
Subsidiaries for such quarter and the portion of the fiscal year through
the end of such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by a
47
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments)
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein and except that the financial statements delivered
pursuant to subsection 7.1(b) may not include notes thereto).
7.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statement referred
to in subsections 7.1(a) and (b), a certificate of a Responsible Officer
("COMPLIANCE CERTIFICATE") stating that, to the best of such officer's
knowledge, during such period (i) no Subsidiary has been formed or acquired
(or, if any such Subsidiary has been formed or acquired, the Borrower has
complied with the requirements of subsection 7.9 with respect thereto),
(ii) neither the Borrower nor any of its Subsidiaries has changed its name,
its principal place of business, its chief executive office or the location
of any material item of tangible Collateral without either giving prompt
written notice of such event to the Agent or complying with the
requirements of this Agreement and the Security Agreements with respect
thereto, (iii) the Borrower has observed or performed all of its covenants
and other agreements, and satisfied every condition, contained in this
Agreement and the other Loan Documents to be observed, performed or
satisfied by it other than with respect to those matters which have been
cured within the grace periods specified herein or expressly waived by the
Lenders or the Required Lenders, as appropriate, and (iv) the Borrower has
set forth in reasonable detail any and all calculations necessary to show
compliance with all of the financial condition covenants set forth in
subsections 8.1, 8.7, 8.8 and 8.9, including, without limitation,
calculations and reconciliations, if any, necessary to show compliance with
such financial condition covenants on the basis of generally accepted
accounting principles in the United States of America consistent with those
utilized in preparing the audited financial statements referred to in
subsection 5.1, and that such Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate;
(c) not later than 60 days after the end of each fiscal year of the
Borrower, a copy of the projections of the operating budget and cash flow
budget of the Borrower and its Subsidiaries for the succeeding fiscal year,
such projections to be accompanied by a certificate of a Responsible
Officer to the effect that such projections have been prepared on the basis
of sound financial planning practice and that such Officer has no reason to
believe they are incorrect or misleading in any material respect;
48
(d) as soon as practicable after the same are sent, copies of all
financial statements and reports which the Borrower or any of its
Subsidiaries sends to its stockholders in their capacities as such, and as
soon as practicable after the same are filed, copies of all financial
statements and reports which the Borrower or any of its Subsidiaries may
make to, or file with, the Securities and Exchange Commission or any
successor or analogous Governmental Authority;
(e) promptly upon receipt thereof, copies of all final reports
submitted to the Borrower or any of its Subsidiaries by independent
certified public accountants in connection with each annual, interim or
special financial audit of the books of the Borrower or any of its
Subsidiaries made by such accountants, including, without limitation, any
final comment letter submitted by such accountants to management in
connection with their annual audit PROVIDED, in each case, that such final
report or letter, as the case may be, concerns an event or events which
could reasonably be expected to have a Material Adverse Effect;
(f)concurrently with the delivery of the financial statements referred
to in subsections 7.1(a) and (b), a certificate of a Responsible Officer
demonstrating, in reasonable detail, (i) the Borrowing Base (as such term
is defined in the Indentures) as of such date and (ii) the Consolidated
Coverage Ratio (as such term is defined in the Indentures), along with a
calculation of the maximum amount (the "TOTAL INCURRENCE AMOUNT") of
Indebtedness that could be incurred on such date under Section 4.11(a) of
the Indentures as a result thereof based upon such Consolidated Coverage
Ratio and assuming (for purposes of giving effect on a pro forma basis),
that none of the proceeds of such Total Incurrence Amount are used to
refinance or retire other Indebtedness or to make an Acquisition (as
defined in the Indentures); and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
7.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent in accordance with current
business practice, as the case may be, all its material obligations of whatever
nature, except where the amount or validity thereof is currently being contested
in good faith by appropriate proceedings and reserves in conformity with GAAP
with respect thereto have been provided on the books of the Borrower or any of
its Subsidiaries, as the case may be.
7.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue to
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as otherwise permitted
pursuant to subsection 8.5; and comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
7.5 MAINTENANCE OF PROPERTY; INSURANCE. Keep (except as permitted by
subsection
49
8.6) all property that is useful and necessary in the then current conduct of
its business in good working order and condition (ordinary wear and tear
excepted); maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least
such risks (but including in any event public liability, product liability
and business interruption) as are usually insured against in the same general
area by companies engaged in the same or a similar business; and furnish to
the Agent, upon written request, full information as to the insurance carried.
7.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper books of records and account in which proper entries in conformity with
GAAP and all Requirements of Law shall be made of all dealings and transactions
in relation to its business and activities; and permit representatives of the
Agent and any Lender to visit and inspect any of its properties and examine and
make abstracts from any of its books and records at any reasonable time and as
often as may reasonably be desired following reasonable notice (including topics
for discussion), and to discuss the business, operations, properties and
financial and other condition of the Borrower and the its Subsidiaries with
officers of the Borrower and its Subsidiaries and with its independent certified
public accountants.
7.7 NOTICES. Promptly give notice to the Agent and each Lender of:
(a) any Responsible Officer becoming aware of the occurrence of any
Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, which
in either case, if not cured or if adversely determined, as the case may
be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $1,000,000 or more and not
covered by insurance or in which injunctive or similar relief is sought if
the granting of such injunctive or other relief could reasonably be
expected to have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence (or the reasonable expectation of the occurrence) of any
Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a
Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or any
Multiemployer Plan to effect a termination or Reorganization of any
Multiemployer Plan or any Single Employer Plan or (iii) the termination or
partial termination of any Single Employer Plan by the Borrower or any
Commonly Controlled Entity;
(e) (i) any release or discharge by the Borrower or any of its
Subsidiaries of any
50
Material of Environmental Concern required to be reported under
Environmental Laws to any Governmental Authority; (ii) any condition,
circumstance, occurrence or event that could result in a material
liability under Environmental Laws or could result in the imposition of
any Lien or other restriction on the title, ownership or transferability
of any material Property; and (iii) any proposed action to be taken by
the Borrower or any of its Subsidiaries that could reasonably be
expected to subject the Borrower or any of its Subsidiaries to any
material additional or different requirements or liabilities under
Environmental Law;
(f) any development or event which could reasonably be expected to
have a Material Adverse Effect; and
(g) promptly upon the occurrence thereof, the occurrence of a Change
of Control or a "Change of Control" (as defined in the Senior Subordinated
Note Indenture).
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower or such Subsidiary proposes to take with
respect thereto.
7.8 ENVIRONMENTAL LAWS. (a) Comply in all material respects with, and
make reasonable efforts to ensure compliance in all material respects by all
tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with, and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required by Governmental
Authorities under Environmental Laws and promptly comply with all lawful orders
and directives of all Governmental Authorities regarding Environmental Laws
other than such orders and directives as to which an appeal or other challenge
has been timely and properly taken in good faith and the pendency of any and all
such appeals and other challenges does not give rise to a Material Adverse
Effect.
7.9 ADDITIONAL COLLATERAL. (a) With respect to any assets (or any
interest therein) acquired after the Closing Date by the Borrower or any of its
Subsidiaries that are intended to be subject to the Lien created by any of the
Security Agreements but which are not so subject promptly (and in any event
within 60 days after the acquisition thereof): (i) execute and deliver to the
Agent such amendments to the relevant Security Agreements or such other
documents as the Agent shall deem necessary or advisable to grant to the Agent,
for the benefit of the Lenders, a Lien on such assets (or such interest
therein), (ii) take all actions necessary or advisable to cause such Lien to be
duly perfected in accordance with all applicable Requirements of Law, including,
without limitation, the filing of financing statements and the recording of
leasehold mortgages in such jurisdictions as may be requested by the Agent,
(iii) if requested by the Agent, deliver to the Agent legal opinions relating to
the matters described in clauses (i) and (ii) immediately preceding, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Agent, and (iv) if requested by the Agent, deliver to the
Agent
51
surveys, title insurance and flood insurance reasonably satisfactory to the
Agent.
(b) With respect to any Person that, subsequent to the Closing Date,
becomes a domestic Subsidiary, promptly upon the request of the Agent: (i)
execute and deliver to the Agent, for the benefit of the Lenders, a new pledge
agreement, or such amendments to the Guarantee and Collateral Agreement as the
Agent shall deem necessary or advisable to grant to the Agent, for the benefit
of the Lenders, a Lien on the Capital Stock of such Subsidiary which is owned by
the Borrower or any of its Subsidiaries, (ii) deliver to the Agent the
certificates representing such Capital Stock, together with undated stock powers
executed and delivered in blank by a duly authorized officer of the Borrower or
such Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to
become a party to the Guarantee and Collateral Agreement or to a new security
agreement in each case pursuant to an annex to the Guarantee and Collateral
Agreement which is in form and substance satisfactory to the Agent, and (B) to
take all actions necessary or advisable to cause the Lien created by the
Guarantee and Collateral Agreement or such security agreement, to be duly
perfected in accordance with all applicable Requirements of Law, including,
without limitation, the filing of financing statements in such jurisdictions as
may be requested by the Agent and (iv) if requested by the Agent, deliver to the
Agent legal opinions relating to the matters described in clauses (i), (ii) and
(iii) immediately preceding, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Agent.
(c) With respect to any Person that subsequent to the Closing Date
becomes a foreign Subsidiary (other than a foreign Subsidiary owned by another
foreign Subsidiary), promptly upon the request of the Agent: (i) execute and
deliver to the Agent a foreign stock pledge agreement relating to the pledge of
the shares of such foreign Subsidiary executed and delivered by a duly
authorized officer of the Borrower or its domestic Subsidiary, as the case may
be, with a counterpart or a conformed copy for each Lender, (ii) deliver to the
Agent the certificate[s] representing 65% of
52
the Capital Stock of such foreign Subsidiary, together with, if required by
such foreign stock pledge agreement, undated stock powers for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof, (iii) complete such other actions as are necessary or, in the
opinion of the Agent, desirable to perfect the Liens created by such foreign
stock pledge agreement and (iv) cause the delivery of the executed legal
opinion of special foreign counsel with respect to such foreign stock pledge
agreement, in form and substance reasonably satisfactory to the Agent.
7.10 FURTHER ASSURANCES. Upon the request of the Agent, promptly
perform or cause to be performed any and all acts and execute or cause to be
executed any and all documents (including, without limitation, financing
statements and continuation statements) for filing under the provisions of the
Uniform Commercial Code or any other Requirement of Law which are necessary or
advisable to maintain in favor of the Agent, for the benefit of the Lenders,
Liens on the Collateral that are duly perfected in accordance with all
applicable Requirements of Law.
7.11 PROPERTY MATTERS. With respect to any real property owned or
leased by the Borrower or its Subsidiaries and not subject to a fee or leasehold
mortgage constituting a Security Document, as applicable, to the extent
reasonably requested by the Agent, no later than 60 days following the Closing
Date, at its own expense (a) deliver to the Agent, for the benefit of the
Lenders, a mortgage on such real property as to which a landlord consent to such
mortgage is not required, (b) with respect to such real property as to which a
landlord consent to such mortgage is required, request and use reasonable best
efforts to obtain a landlord waiver and
53
consent with respect thereto and leasehold mortgage, each in form and
substance reasonably satisfactory to the Agent, from each of the landlords of
such facilities as the Agent may reasonably designate, (c) with respect to
each leased property to be subject to a leasehold mortgage, use reasonable
best efforts to obtain a landlord waiver and consent in form and substance
reasonably satisfactory to the Agent and (d) take all actions necessary or,
in the opinion of the Agent, desirable to cause any liens created by any such
mortgage to be duly perfected in accordance with all applicable Requirements
of Law, including, without limitation, the recording of such leasehold
mortgages in such jurisdictions as may be requested by the Agent.
SECTION 8. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Revolving Credit
Commitments remain in effect, any Loan or Letter of Credit remains outstanding
and unpaid or any other amount is owing to any Lender or the Agent hereunder, it
shall not, and (except with respect to subsection 8.1) shall not permit any of
its Subsidiaries to, directly or indirectly:
8.1 FINANCIAL CONDITION COVENANTS. (a) TOTAL INDEBTEDNESS TO EBITDA.
Permit the Leverage Ratio on the last day of any fiscal quarter of the Borrower
to be greater than the ratio set forth below opposite the last day of such
fiscal quarter:
Date Ratio
---- -----
March 31, 1998 4.00 to 1.0
June 30, 1998 4.00 to 1.0
September 30, 1998 4.00 to 1.0
December 31, 1998 4.00 to 1.0
March 31, 1999 3.50 to 1.0
June 30, 1999 3.50 to 1.0
September 30, 1999 3.50 to 1.0
December 31, 1999 3.50 to 1.0
March 31, 2000 3.25 to 1.0
June 30, 2000 3.25 to 1.0
September 30, 2000 3.25 to 1.0
December 31, 2000 3.25 to 1.0
March 31, 2001 3.00 to 1.0
June 30, 2001 3.00 to 1.0
September 30, 2001 3.00 to 1.0
December 31, 2001 3.00 to 1.0
March 31, 2002 3.00 to 1.0
June 30, 2002 3.00 to 1.0
September 30, 2002 3.00 to 1.0
December 31, 2002 3.00 to 1.0
March 31, 2003 3.00 to 1.0
June 30, 2003 3.00 to 1.0
54
September 30, 2003 3.00 to 1.0
December 31, 2003 3.00 to 1.0
(b) INTEREST COVERAGE. Permit for any period of four consecutive
fiscal quarters ending on any date set forth below the ratio of (A) the
difference of Consolidated EBITDA of the Borrower for such period minus
Consolidated Capital Expenditures of the Borrower for such period to (B)
Consolidated Interest Expense of the Borrower for such period to be less
than the ratio set forth below opposite the date on which the last of such
fiscal quarters ends:
Date Ratio
---- -----
March 31, 1998 2.00 to 1.0
June 30, 1998 2.00 to 1.0
September 30, 1998 2.00 to 1.0
December 31, 1998 2.00 to 1.0
March 31, 1999 2.25 to 1.0
June 30, 1999 2.25 to 1.0
September 30, 1999 2.25 to 1.0
December 31, 1999 2.25 to 1.0
March 31, 2000 2.50 to 1.0
June 30, 2000 2.50 to 1.0
September 30, 2000 2.50 to 1.0
December 31, 2000 2.50 to 1.0
March 31, 2001 3.00 to 1.0
June 30, 2001 3.00 to 1.0
September 30, 2001 3.00 to 1.0
December 31, 2001 3.00 to 1.0
March 31, 2002 3.00 to 1.0
June 30, 2002 3.00 to 1.0
September 30, 2002 3.00 to 1.0
December 31, 2002 3.00 to 1.0
March 31, 2003 3.00 to 1.0
June 30, 2003 3.00 to 1.0
September 30, 2003 3.00 to 1.0
December 31, 2003 3.00 to 1.0
(c) MAINTENANCE OF NET WORTH. Permit the Consolidated Net Worth of
the Borrower at any time to be less than the sum of $140,000,000 plus 50%
of the cumulative sum of Consolidated Net Income for each fiscal quarter
(if positive) beginning after the Closing Date and ended at or prior to
such time.
8.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement;
55
(b) Indebtedness of (i) the Borrower to any Subsidiary and (ii) any
Subsidiary which is a party to the Guarantee and Collateral Agreement to
the Borrower; PROVIDED that the Borrower hereby agrees that all such
Indebtedness of any such Subsidiary to the Borrower permitted pursuant to
clause (ii) above is subordinated to the payment in full of the obligations
of such Subsidiary under the Guarantee and Collateral Agreement or another
subsidiary guarantee to which it is a party, and any payment received by
the Borrower in respect thereof while an Event of Default shall have
occurred and be continuing shall be held by the Borrower in trust for the
Agent and paid over to the Agent, for the benefit of the Lenders, in the
event of any demand in respect of the Guarantee and Collateral Agreement or
such subsidiary guarantee;
(c) Indebtedness of the Borrower and any of its Subsidiaries incurred
not later than 180 days after the acquisition of fixed or capital assets to
finance the acquisition of such fixed or capital assets (whether pursuant
to a loan, a Financing Lease or otherwise), in an initial amount not less
than 75%, and not more than 100%, of the original purchase price of such
property at the time it was acquired, and any renewals, extensions,
refundings or refinancings of such indebtedness; PROVIDED that the terms of
such Indebtedness shall not prohibit or limit the ability of any Subsidiary
to declare or pay any dividend or make any payment or other distribution
(other than a distribution of the assets financed by such Indebtedness),
either directly or indirectly, to or for the account of the Borrower or any
Subsidiary of the Borrower;
(d) Indebtedness outstanding on the date hereof and listed on Schedule
8.2, not to exceed an aggregate outstanding principal amount of $250,000 on
the Closing Date, and any renewals, extensions, refundings or refinancings
of such Indebtedness, provided the amount thereof is not increased, the
maturity of any installment of principal thereof is not shortened and the
subordination provisions thereof are not amended or modified except on
terms and conditions satisfactory to the Required Lenders;
(e) (i) Indebtedness under the 1994 Senior Subordinated Notes
(including any 1994 Senior Subordinated Notes exchanged for other 1994
Senior Subordinated Notes) and (ii) Indebtedness under the 1995 Senior
Subordinated Notes (including any 1995 Senior Subordinated Notes exchanged
for other 1995 Senior Subordinated Notes);
(f) Indebtedness of the Canadian Subsidiaries and U.K. Subsidiaries at
any time not exceeding an aggregate principal amount outstanding equivalent
at such time to $10,000,000 (U.S. Dollars equivalent);
(g) Indebtedness constituting the defined purchase price "earn-out"
liabilities under (i) the Asset Purchase Agreement, dated as of July 31,
1997, among Automatic Transmission Shops Inc., X.X. Xxxxx, ATS
Remanufacturing, Inc., and the Borrower in an aggregate amount not to
exceed $13,600,000 and (ii) the Acquisition in an aggregate amount not to
exceed $12,500,000;
(h) Indebtedness in respect of (i) Hedging Agreements not involving
more than
56
$50,000,000 in aggregate notional amount at any one time outstanding or
(ii) rate caps, collars or similar agreements in respect of interest or
currency rate fluctuations that require payment by the Borrower only of
fixed fees determined at or prior to the effectiveness thereof and not
termination payments or other payments or liabilities that change in
amount based on changes in underlying rates; provided that in each case
such Hedging Agreements are entered into for legitimate hedging purposes
related to the business of the Borrower and its Subsidiaries and not for
speculative purposes; and
(i) additional Indebtedness of the Borrower in aggregate principal
amount outstanding at any time not exceeding $10,000,000.
8.3 LIMITATION ON LIENS. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes, assessments or other governmental charges not yet
overdue or which are being contested in good faith by appropriate
proceedings, PROVIDED that adequate reserves with respect thereto are
maintained on the books of the Borrower or its Subsidiaries, as the case
may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(e) easements, rights-of-way, building, zoning and other similar
restrictions, utility agreements, covenants, reservations and encroachments
and other similar encumbrances or title defects incurred, or leases or
subleases granted to others in the ordinary course of business which, in
the aggregate, do not materially detract from the aggregate value of the
properties of the Borrower and its Subsidiaries, taken as a whole, or in
the aggregate materially interfere with the ordinary conduct of the
business of the Borrower and its Subsidiaries, taken as a whole;
(f) Liens in existence on the date hereof listed on Schedule 8.3,
securing Indebtedness permitted by subsection 8.2(d), PROVIDED that no such
Lien is spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower and its Subsidiaries
permitted by
57
subsection 8.2(c) incurred to finance the acquisition of fixed or
capital assets, PROVIDED that (i) such Liens shall be created not later
than 180 days after the acquisition of such fixed or capital assets,
(ii) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness, (iii) the principal amount of
Indebtedness secured thereby is not increased and (iv) the principal
amount of Indebtedness secured by any such Lien shall at no time exceed
100% of the original purchase price of such property at the time it was
acquired;
(h) Liens on property other than the Collateral (not otherwise
permitted hereunder) which secure obligations not exceeding (as to the
Borrower and all Subsidiaries) $5,000,000 in an aggregate amount at any
time outstanding;
(i) Liens created pursuant to the Loan Documents;
(j) Liens on assets of corporations which become Subsidiaries of the
Company after the date hereof existing on the date of such acquisition,
PROVIDED that (i) such Liens do not at any time encumber any property other
than the property financed by such Indebtedness, (ii) the principal amount
of Indebtedness secured thereby is not increased and (iv) such Lien or
indebtedness is not created or incurred in connection with or contemplation
of such acquisition; and
(k) Liens on assets of the Canadian Subsidiaries and the U.K.
Subsidiaries of the Borrower securing Indebtedness permitted by subsection
8.2(f).
(l) Liens in respect of security interests in inventory and any
proceeds thereof, granted in the ordinary course of business for the
benefit of any supplier of such inventory bearing the trade or service mark
of such supplier, provided such liens do not extend to assets other than
parts supplied from time to time by such supplier in the ordinary course of
business.
8.4 LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof not to
exceed $100,000 in the aggregate;
(b) Guarantee Obligations in respect of the Senior Subordinated Notes;
PROVIDED that such Guarantee Obligations are subordinated and junior in all
respects to the obligations of the Loan Parties under the Loan Documents;
(c) Guarantee Obligations incurred after the date hereof in an
aggregate amount not to exceed $5,000,000 at any one time outstanding;
(d) the Guarantee and Collateral Agreement and any other subsidiary
guarantee entered into from time to time pursuant to the terms of this
Agreement;
58
(e) Guarantee Obligations in respect of Letters of Credit;
(f) Guarantee Obligations in respect of letters of credit issued for
the account of the Borrower or any of its Subsidiaries in the ordinary
course of business in an aggregate face amount not to exceed $2,000,000 at
any time.
(g) guarantees made by the Borrower or any Subsidiary of Indebtedness
of any Subsidiary which is a Guarantor or of the Borrower, which
Indebtedness is otherwise permitted under this Agreement; and
(h) guarantees made in the ordinary course of its business by the
Borrower or any Subsidiary of obligations of any Subsidiary which is a
Guarantor or of the Borrower, which obligations are otherwise permitted
under this Agreement.
8.5 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its lines of business,
except that (i) any Subsidiary of the Borrower may be merged or consolidated
with or into, or may sell, lease, transfer or otherwise dispose of any of its
assets to, the Borrower (PROVIDED that the Borrower shall be the continuing,
surviving, or acquiring corporation) or with, into or to any one or more
wholly-owned Subsidiaries of the Borrower which is a Guarantor (PROVIDED that
the wholly-owned Subsidiary or Subsidiaries, which is a Guarantor, shall be
the continuing, surviving or acquiring corporation) and (ii) any Subsidiary
of the Borrower formed solely for the purpose of effecting an acquisition of
assets permitted hereunder may be merged or consolidated with any other
Person (PROVIDED that the continuing or surviving corporation of such merger
or consolidation shall be a Subsidiary of the Borrower).
8.6 LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Borrower or any wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out property in
the ordinary course of business;
(b) the sale or other disposition of any property (other than
inventory or obsolete or worn out property in the ordinary course of
business) in the ordinary course of business PROVIDED that the aggregate
consideration received in any fiscal year shall not exceed 20% of the
Consolidated EBITDA of the Borrower for such fiscal year;
(c) the sale or return of inventory in the ordinary course of
business;
(d) the sublease of real or personal property on commercially
reasonable terms to the extent that the Borrower determines that such
property is no longer necessary in the
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conduct of the business of the Borrower and its Subsidiaries; and
(e) as permitted by subsection 8.5(i).
8.7 LIMITATION ON LEASES. Permit Consolidated Lease Expense for any
fiscal year of the Borrower to exceed an amount equal to $11,000,000 for the
fiscal year ending December 31, 1998, $14,000,000 for the fiscal year ending
December 31, 1999 and $10,000,000 for each fiscal year thereafter.
8.8 LIMITATION ON DIVIDENDS. (a) Declare or pay any dividend (other
than dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of the Borrower or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
any Subsidiary (such declarations, payments, setting apart, purchases,
redemptions, defeasance, retirements, acquisitions and distributions being
herein called "RESTRICTED PAYMENTS"); PROVIDED THAT so long as no Default or
Event of Default has occurred and is continuing, the Borrower and its
Subsidiaries may (i) make Restricted Payments in any fiscal year not to exceed
$1,000,000 in the aggregate, (ii) make Restricted Payments not to exceed
$3,000,000 in the aggregate in any fiscal year or $6,000,000 in the aggregate on
a cumulative basis after the Closing Date to permit the Borrower to repurchase
shares of its common stock or rights, options or units thereof in respect of any
management subscription or similar employment agreement and (iii) make
Restricted Payments consisting of Specified Preferred Stock.
(b) Permit the terms of any Contractual Obligation of any Subsidiary
to prohibit or limit the ability of any Subsidiary to declare or pay any
dividend or make any payment or other distribution, either directly or
indirectly, to or for the account of the Borrower or any other wholly-owned
Subsidiary of the Borrower provided that this subsection 8.8(b) shall not apply
to (i) purchase money obligations or Financing Leases (or refinancings thereof
that impose no more restrictive restrictions ) for property acquired in the
ordinary course of business that impose restrictions solely on the property so
acquired, (ii) restrictions with respect to a Subsidiary imposed pursuant to a
binding agreement which has been entered into for the sale or disposition
(including by merger or consolidation) of all or substantially all of the
Capital Stock or assets of such Subsidiary, provided that such restrictions
apply solely to such Capital Stock or asset of such Subsidiary and such sale or
disposition is otherwise permitted pursuant to this Agreement and (iii)
restrictions arising by reason of customary non-assignment or no-subletting
clauses in leases or other contracts entered into in the ordinary course of
business.
8.9 LIMITATION ON CAPITAL EXPENDITURES. Make any expenditure in
respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations and any expenditure
from the proceeds of casualty insurance used to repair or replace the assets
affected by such casualty loss) except for expenditures in the ordinary course
of business not exceeding, in the aggregate for the Borrower and its
Subsidiaries (i) during any of
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the fiscal years of the Borrower set forth below, the amount set forth
opposite such fiscal year below:
FISCAL YEAR AMOUNT
----------- ------
1998 $24,000,000
1999 $24,000,000
2000 $28,000,000
2001 $30,000,000
2002 $30,000,000
2003 $30,000,000
PROVIDED, that in the event that the amount set forth above for any fiscal year
set forth (before giving effect to any carry-over amount pursuant to this
proviso) above exceeds the actual amount of all capital expenditures for such
fiscal year determined in accordance with GAAP, the entire amount of such excess
may be carried over for expenditure in that portion of the fiscal year
immediately following such fiscal year which follows delivery of the financial
statements delivered pursuant to subsection 7.1(a) with respect to such fiscal
year.
8.10 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person, except:
(a) the Acquisition;
(b) extensions of trade credit in the ordinary course of business;
(c) investments in Cash Equivalents;
(d) loans or advances to officers or employees to pay relocation costs
of such officers or employees in connection with their employment by the
Borrower or any of its Subsidiaries;
(e) any notes, securities or other instruments received as
consideration for any sale of assets permitted hereunder in an aggregate
amount not to exceed $500,000 in any fiscal year of the Borrower;
(f) any notes, securities or other instruments received as part of the
settlement of litigation or in satisfaction of extensions of credit to any
Person otherwise permitted hereunder pursuant to the reorganization,
bankruptcy or liquidation of such Person;
(g) (i) investments by the Borrower in its Subsidiaries which are
parties to the Guarantee and Collateral Agreement and the Capital Stock of
which is pledged to the Agent to secure the Borrower's obligations
hereunder and under the other Loan Documents, (ii) investments by
Subsidiaries of the Borrower which are not parties to the
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Guarantee and Collateral Agreement in other Subsidiaries of the
Borrower, (iii) investments by Subsidiaries of the Borrower which are
parties to the Guarantee and Collateral Agreement in the Borrower and in
other Subsidiaries of the Borrower which are parties to the Guarantee
and Collateral Agreement and (iv) investments by the Borrower or
Subsidiaries of the Borrower which are parties to the Guarantee and
Collateral Agreement in Canadian Subsidiaries or U.K. Subsidiaries in an
aggregate amount not to exceed $10,000,000 at any time outstanding
(determined on a cumulative basis from and after the Closing Date, but
giving effect to reductions of amounts outstanding by the amount of
capital in respect thereof returned in cash to the Borrower or the
applicable Subsidiary from time to time); PROVIDED that no such
investments shall be permitted in connection with an acquisition not
otherwise permitted under subsection 8.10(j);
(h) payroll advances in the ordinary course of business;
(i) travel and entertainment advances and other loans to officers and
employees, PROVIDED that the aggregate principal amount of all such loans
and advances outstanding at any one time shall not exceed $100,000;
(j) acquisitions by the Borrower and its Subsidiaries, of assets or
Capital Stock of one or more corporations or other Persons so long as (i)
each such acquisition and all transactions related thereto shall be
consummated in accordance with applicable Requirements of Law; (ii) each
such acquisition, in the case of an acquisition of Capital Stock, shall
result in such corporation or Person becoming a Subsidiary; (iii) after
giving effect to any such acquisition, no Default or Event of Default shall
have occurred and be continuing; (iv) the Borrower shall have delivered to
the Agent a certificate demonstrating that the requirements of subsection
8.1 would be satisfied on a pro forma basis as at the end of the most
recently ended fiscal quarter of the Borrower with respect to which
financial statements have been delivered pursuant to subsection 7.1 if each
such acquisition (including the Indebtedness incurred in connection
therewith) had occurred on the first day of the four fiscal quarter period
ended with such most recently ended fiscal quarter; and (v) in the case of
any acquisition by the Borrower and its Subsidiaries, for cash or other
consideration exceeding $30,000,000 in the aggregate, such acquisition
shall be subject to the prior written consent of the Required Lenders;
(k) investments existing on the Closing Date and set forth on Schedule
8.10; and
(l) investments not permitted by the foregoing clauses of this
subsection 8.10 by the Borrower or its Subsidiaries in a Person which the
Borrower and/or its Subsidiaries owns, or immediately after giving effect
to such investment will own, more than 20% of such Person's outstanding
voting Capital Stock (but which Person is not, and will not be, after
giving effect to such investment, a Subsidiary) in an aggregate amount not
to exceed $15,000,000 outstanding at any time (determined on a cumulative
basis from and after the Closing Date, but giving effect to reductions of
amounts outstanding by the amount of capital in respect thereof returned in
cash to the Borrower or the applicable Subsidiary from time to time).
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8.11 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS. (a) Make any optional payment or prepayment on or redemption of
any Senior Subordinated Notes other than such payments in an aggregate amount
not to exceed $10,000,000 after the date hereof or (b) amend, modify or change,
or consent or agree to any amendment, modification or change to any of the terms
of the Senior Subordinated Notes (other than any such amendment, modification or
change which would extend the maturity or reduce the amount of any payment of
principal thereof or which would reduce the rate or extend the date for payment
of interest thereon or make changes relieving the Borrower from compliance with
the terms thereof) PROVIDED that the Borrower and its Subsidiaries may use the
proceeds of any equity offering to pay, prepay or redeem any Senior Subordinated
Notes if the requirements of subsection 8.1 would be satisfied on a pro forma
basis as at the end of the most recently ended fiscal quarter of the Borrower
with respect to which financial statements have been delivered pursuant to
subsection 7.1 if each such payment, prepayment or redemption had occurred on
the first day of the four fiscal quarter period ended with such most recently
ended fiscal quarter.
8.12 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate (other
than leases of property from Affiliates existing on the date hereof and
employment agreements, directors' fee arrangements, indemnification of
directors, officers and employees and loans to employees permitted hereunder in
the ordinary course of business) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of the Borrower's or
such Subsidiary's business and (c) upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary, as the case may be, than it would
obtain in a comparable arm's length transaction with a Person which is not an
Affiliate; PROVIDED that notwithstanding the foregoing, such prohibited
transactions with Affiliates shall not include (a) payments of reasonable and
customary directors' fees and indemnities of directors, officers and employees
(b) payments to Aurora under any management services agreement as in effect on
the Closing Date, (c) transfers of inventory among the Loan Parties in the
ordinary course of business and (d) loans or advances to officers or employees
of the Borrower or any of its Subsidiaries to pay business related travel
expenses or reasonable relocation costs of such officers or employees in
connection with their employment by the Borrower or any of its Subsidiaries.
8.13 LIMITATION ON SALES AND LEASEBACKS. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or such Subsidiary.
8.14 LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal year of
the Borrower to end on a day other than December 31.
8.15 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into with any
Person any agreement, other than (a) this Agreement, (b) the Senior Subordinated
Note Indenture and (c) any
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purchase money mortgages or Financing Leases permitted by this Agreement (in
which cases, any prohibition or limitation shall only be effective against
the assets financed thereby), which prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now
owned or hereafter acquired other than any Lien granted under this Agreement
or to secure purchase money mortgages of Financing Leases.
8.16 LIMITATION ON LINES OF BUSINESS; CREATION OF SUBSIDIARIES. (a)
Enter into any business, either directly or through any Subsidiary, except for
businesses which are of the same general type, and reasonably related to, those
in which the Borrower and its Subsidiaries are engaged on the date of this
Agreement.
(b) Create any new Subsidiaries of the Borrower other than any
Subsidiaries that shall execute and become party to the Guarantee and Collateral
Agreement.
8.17 LIMITATION ON BORROWINGS. Incur any obligations under this
Agreement and the other Loan Documents in an aggregate outstanding amount at any
time in excess of the Borrowing Base (as defined in the Indentures) if such
incurrence would result in a default under any provision of the Indentures.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan when due
in accordance with the terms thereof or hereof; or the Borrower shall fail
to pay any Reimbursement Obligation within two days after such amount
becomes due in accordance with the terms thereof or hereof; or the Borrower
shall fail to pay any interest on any Note, or any other amount payable
hereunder, within five days after any such interest or other amount becomes
due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower
or any other Loan Party herein or in any other Loan Document or which is
contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or
any such other Loan Document shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in subsection 7.7(a),
7.11 or Section 8 of this Agreement; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue
unremedied for a period of 30 days; or
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(e) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest of any Indebtedness (other than the
Notes) or in the payment of any Guarantee Obligation, in either case in an
outstanding principal amount in excess of $2,500,000, beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Guarantee
Obligation or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event shall occur or condition exist, in
each case beyond the cure or grace period applicable thereto (not to exceed
30 days), if any, provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created, the effect of which
default or other event or condition (and such passage of the cure or grace
period, if applicable) is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or
such Guarantee Obligation to become payable; or
(f) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
the Borrower or any of its Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Borrower or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Borrower or any of its Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan
65
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or
conditions, if any, could reasonably be expected to have a Material
Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $1,000,000 or more at any one
time, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof; or
(i) (i) Any material provision of the Security Agreements shall cease,
for any reason, to be in full force and effect, or the Borrower or any
other Loan Party which is a party to any of the Security Agreements shall
so assert or (ii) the Lien created by any of the Security Agreements shall
cease to be enforceable and of the same effect and priority purported to be
created thereby; or
(j) Any guarantee under the Guarantee and Collateral Agreement shall
cease, for any reason, to be in full force and effect or any Guarantor
shall so assert, except in the event of a merger of Subsidiaries permitted
hereunder if the surviving or continuing Subsidiary is a Guarantor or the
Borrower; or
(k) Any of the subordination provisions in any Senior Subordinated
Note shall cease, for any reason, to be in full force and effect, or the
Borrower or any other party to the Senior Subordinated Note or any holder
of the notes thereunder shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (f) above with respect to the Borrower, automatically the
Commitments shall immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement (including,
without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) and the Notes shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both of
the following actions may be taken: (i) with the consent of the Required
Lenders, the Agent may, or upon the request of the Required Lenders, the Agent
shall, by notice to the Borrower declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Agent may, or upon the request of the
Required Lenders, the Agent
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shall, by notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement
(including, without limitation, all amounts of L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) and the Notes to be due and
payable forthwith, whereupon the same shall immediately become due and
payable. With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Agent an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. The
Borrower hereby grants to the Agent, for the benefit of the Issuing Lender
and the L/C Participants, a security interest in such cash collateral to
secure all obligations of the Borrower under this Agreement and the other
Loan Documents. Amounts held in such cash collateral account shall be applied
by the Agent to the payment of drafts drawn under such Letters of Credit, and
the unused portion thereof after all such Letters of Credit shall have
expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the Notes. After all such
Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations
of the Borrower hereunder and under the Notes shall have been paid in full,
the balance, if any, in such cash collateral account shall be returned to the
Borrower. The Borrower shall execute and deliver to the Agent, for the
account of the Issuing Lender and the L/C Participants, such further
documents and instruments as the Agent may request to evidence the creation
and perfection of the within security interest in such cash collateral
account.
Except as expressly provided above in this Section 9, presentment,
demand, protest and all other notices of any kind are hereby expressly waived to
the fullest extent permitted by applicable law.
SECTION 10. THE AGENT
10.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
10.2 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
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10.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the Notes or any other Loan
Document or for any failure of the Borrower to perform its obligations hereunder
or thereunder. The Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
10.4 RELIANCE BY AGENT. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the Notes and the
other Loan Documents in accordance with a request of the Required Lenders, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Notes.
10.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the Lenders. The
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; PROVIDED that unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
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10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents
to the Agent that it has, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
10.7 INDEMNIFICATION. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which indemnification
is sought under this subsection (or, if indemnification is sought after the date
upon which the Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with their Commitment Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Agent in any way relating to
or arising out of, the Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; PROVIDED that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from the Agent's gross
negligence or willful misconduct. The agreements in this subsection shall
survive the payment of the Notes and all other amounts payable hereunder.
10.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower as though the Agent were not the Agent hereunder and
under the other Loan Documents. With respect to its Loans made or renewed by it
and any Note issued to it, the Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and
69
may exercise the same as though it were not the Agent, and the terms "Lender"
and "Lenders" shall include the Agent in its individual capacity.
10.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 30 days'
notice to the Lenders. If the Agent shall resign as Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, subject to the approval by the
Borrower (which approval shall not be unreasonably withheld), whereupon such
successor agent shall succeed to the rights, powers and duties of the Agent, and
the term "Agent" shall mean such successor agent effective upon such appointment
and approval, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement or any holders of the Notes.
After any retiring Agent's resignation as Agent, the provisions of this Section
10 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement and the other Loan Documents.
SECTION 11. MISCELLANEOUS
11.1 AMENDMENTS AND WAIVERS. Neither this Agreement, any Note or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Lenders may, or, with the written consent of the
Required Lenders, the Agent may, from time to time, (a) enter into with the
Borrower written amendments, supplements or modifications hereto and to the
Notes and the other Loan Documents for the purpose of adding any provisions to
this Agreement, the Notes or the other Loan Documents or changing in any manner
the rights of the Lenders or of the Borrower or any of its Subsidiaries
hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders or the Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement, the Notes or the other
Loan Documents or any Default or Event of Default and its consequences;
PROVIDED, HOWEVER, that no such waiver and no such amendment, supplement or
modification shall (i) reduce the amount or extend the scheduled date of
maturity of any Loan or Reimbursement Obligation or of any installment thereof,
or reduce the stated rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Lender's Commitments, in each case without the consent of
each affected Lender, or (ii) amend, modify or waive any provision of this
subsection or reduce the percentage specified in the definition of Required
Lenders, or consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents or
release all or substantially all of the Collateral, in each case without the
written consent of all the Lenders, or (iii) amend, modify or waive any
provision of Section 10 without the written consent of the then Agent or (iv)
amend, modify or waive any provision of Section 3 without the written consent of
the then Issuing Lender. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the Lenders, the Agent and all future holders of the Notes.
In the case of any waiver, the Borrower, the Lenders and the Agent shall be
restored to their former position and rights hereunder and under the outstanding
Notes and any other Loan Documents, and any Default or Event of Default
70
waived shall be deemed to be cured and not continuing; but no such waiver
shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
11.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three days after being deposited
in the mail, postage prepaid, return receipt requested or, in the case of
telecopy notice, when received, addressed as follows in the case of the Borrower
and the Agent, and as set forth in Schedule 1.1 in the case of the other parties
hereto, or to such other address as may be hereafter notified by the respective
parties hereto and any future holders of the Notes:
The Borrower: Aftermarket Technology Corp.
000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to: Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
The Agent: The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx
Telecopy: 000-000-0000
with a copy to: The Chase Manhattan Bank
Xxx Xxxxx Xxxxxxxxx Xxxxx
8th Floor
Agent Bank Service Group
New York, New York 10081
Attention: Xxxxx Xxxxxx
Telecopy: 000-000-0000
The Issuing Bank: The Chase Manhattan Bank Delaware
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Corp. Banking Dept.
Telecopy: 000-000-0000
PROVIDED that any notice, request or demand to or upon the Agent or the Lenders
pursuant to subsection 2.2, 2.3, 2.5, 4.4 or 4.5 shall not be effective until
received.
11.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege
71
hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
11.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans hereunder.
11.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay
or reimburse the Agent for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this
Agreement, the Notes and the other Loan Documents and any other documents
prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby,
including, without limitation, the reasonable fees and disbursements of
counsel to the Agent in connection with the foregoing, (b) to pay or
reimburse each Lender and the Agent for all its reasonable out-of-pocket
costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Notes, the other Loan
Documents and any such other documents, including, without limitation, the
reasonable fees and disbursements of counsel to each Lender and of counsel to
the Agent in connection with the foregoing, (c) to pay, indemnify, and hold
each Lender and the Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay
in paying, stamp, excise and other similar taxes (other than withholding
taxes), if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect
of, this Agreement, the Notes, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the Agent
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
Notes, the other Loan Documents, and any such other documents, including,
without limitation, any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to
the operations of the Borrower, any of its Subsidiaries or any of the
Properties (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"), PROVIDED, that the Borrower shall have no
obligation hereunder to the Agent or any Lender with respect to indemnified
liabilities arising from (i) the gross negligence or willful misconduct of
the Agent or any such Lender or (ii) legal proceedings commenced against the
Agent or any such Lender by any security holder or creditor thereof arising
out of and based upon rights afforded any such security holder or creditor
solely in its capacity as such. The agreements in this subsection 11.5 shall
survive repayment of the Notes and all other amounts payable hereunder.
11.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a) This
72
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Agent and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its business or
investment activities and in accordance with applicable law, at any time sell
(with the consent of the Borrower, which shall not be unreasonably withheld or
delayed) to one or more banks or other entities ("PARTICIPANTS") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. No Lender shall
be entitled to create in favor of any Participant, in the participation
agreement pursuant to which such Participant's participating interest shall be
created or otherwise, any right to vote on, consent to or approve any matter
relating to this Agreement or any other Loan Document except for those matters
specified in clauses (i) and (ii) of the proviso to subsection 11.1. The
Borrower agrees that if amounts outstanding under this Agreement are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, PROVIDED that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in subsection 11.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of subsections 4.12, 4.13 and 4.14
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; PROVIDED that, in the case of
subsection 4.13, such Participant shall have complied with the requirements of
said subsection and PROVIDED, FURTHER that no Participant shall be entitled to
receive any greater amount pursuant to any such subsection than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender may, in the ordinary course of its business or
investment activities and in accordance with applicable law, at any time and
from time to time assign to any Lender or any branch or affiliate thereof or,
with the consent of the Borrower and the Agent (which in each case shall not be
unreasonably withheld or delayed), to an additional bank or financial
institution (an "ASSIGNEE") all or any part of its rights and obligations under
this Agreement and the other Loan Documents pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit E, executed by such Assignee
and such assigning Lender (and, in the case of an Assignee that is not then a
Lender or a branch or an affiliate thereof, by the Borrower and the Agent) and
delivered to the Agent for its acceptance and recording in the
73
Register, PROVIDED that, in the case of any such assignment to an additional
bank or financial institution, if such assignment is of less than all of the
rights and obligations of the assigning Lender, the sum of the aggregate
principal amount of the Loans, the aggregate amount of the L/C Obligations
and the aggregate amount of the Available Revolving Credit Commitment being
assigned shall not be less than $5,000,000 (or such lesser amount as may be
agreed to by the Borrower and the Agent). Upon such execution, delivery,
acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder with a
Commitment as set forth therein, and (y) the assigning Lender thereunder
shall, to the extent provided in such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such assigning Lender shall
cease to be a party hereto but shall nonetheless continue to be entitled to
the benefits of subsections 4.12, 4.13, 4.14 and 11.5). Notwithstanding any
provision of this paragraph (c) and paragraph (e) of this subsection, the
consent of the Borrower shall not be required, and, unless requested by the
Assignee and/or the assigning Lender, new Notes shall not be required to be
executed and delivered by the Borrower, for any assignment which occurs at
any time when any of the Events of Default described in subsection 9(f) shall
have occurred and be continuing.
(d) The Agent on behalf of the Borrower shall maintain at its address
referred to in subsection 11.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "REGISTER") for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time and the registered owners of the
Obligation(s) evidenced by the Note(s). Notes and the obligations evidenced
thereby may be assigned or otherwise transferred in whole or in part only by
registration of such assignment or transfer on the Register (and each Note shall
expressly so provide). Any assignment or transfer of all or part of such
obligation(s) and the Note(s) evidencing the same shall be registered on the
Register only upon surrender for registration of assignment or transfer of the
Note(s) evidencing such Obligation(s), duly endorsed by (or accompanied by a
written instrument of assignment or transfer duly executed by) the Noteholder
thereof, and thereupon one or more new Note(s) in the same aggregate principal
amount shall be issued to the designated Assignee(s) and the old Note(s) shall
be returned by the Agent to the Borrower marked "cancelled". No assignment of
any Note or obligations shall be effective unless it has been recorded in the
Register as provided in this subsection 11.6(d). The entries in the Register
shall be conclusive and the Borrower, the Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loan or the
obligation evidenced by a Note recorded therein for the purpose of receiving all
payments thereon and for all other purposes of this Agreement, notwithstanding
any notice to the contrary. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Agent) together with payment to
the Agent of a registration and processing fee of $3,500, the Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the
74
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower. No assignment shall be effective unless it has
been recorded in the Register as provided in this subsection 11.6(e).
(f) Each Xxxxxx agrees to use reasonable efforts to protect the
confidentiality of any confidential information with respect to the Borrower and
its Subsidiaries and Affiliates thereof. Notwithstanding the foregoing, the
Borrower authorizes each Lender to disclose to any Participant or Assignee
(each, a "TRANSFEREE") and any prospective Transferee any and all financial
information in such Xxxxxx's possession concerning the Borrower and its
Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Xxxxxx's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement.
(g) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Bank in accordance with applicable
law.
11.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITTED LENDER")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in subsection 9(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
PROVIDED, HOWEVER, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder or under the Notes (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Agent after any such set-off and
application made by such Lender, PROVIDED that the failure to give such notice
shall not affect the validity of such set-off and application.
11.8 COUNTERPARTS. This Agreement may be executed by one or more of
the
75
parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the Agent.
11.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrower, any Guarantor, the Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Borrower, the Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents. Each of the parties hereto agrees that,
with the consent of the Agent, names of Lenders on the signature pages hereto
may be added, and the information regarding the Commitments of Lenders set forth
on Schedule 1.1 may be changed, without affecting the validity of the signature
for any party hereto, and such new Lender shall be a Lender hereunder and
Schedule 1.1 shall be replaced with a new Schedule 1.1 reflecting such changes,
PROVIDED that the aggregate amount of the Commitments set forth in Schedule 1.1
hereto may not be changed.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
11.12 SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in
76
subsection 11.2 or at such other address of which the Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this subsection any special, exemplary, punitive or consequential
damages.
11.13 ACKNOWLEDGEMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Notes and the other Loan Documents;
(b) neither the Agent nor any Xxxxxx has any fiduciary relationship
with or duty to the Borrower arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between
Agent and Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of creditor and debtor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower and the Lenders.
11.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
AFTERMARKET TECHNOLOGY CORP.
By:
Name:
Title:
THE CHASE MANHATTAN BANK, as Agent and
as a Lender
By:
Name:
Title:
78
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, D/B/A SEAFIRST BANK
By:
---------------------------------
Name:
Title:
79
BANK OF NOVA SCOTIA
By:
---------------------------------
Name:
Title:
80
THE FIRST NATIONAL BANK OF CHICAGO
By:
---------------------------------
Name:
Title:
81
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By:
---------------------------------
Name:
Title:
82
XXXXXX TRUST & SAVINGS
By:
---------------------------------
Name:
Title:
83
LASALLE NATIONAL BANK
By:
---------------------------------
Name:
Title:
84
NATIONAL CITY BANK
By:
---------------------------------
Name:
Title:
85
BANK OF NEW YORK
By:
---------------------------------
Name:
Title:
86
CREDIT AGRICOLE INDOSUEZ
By:
---------------------------------
Name:
Title:
Schedule A
Pricing Grid
Commitment Eurodollar ABR
Leverage Ratio Fee Rate Applicable Margin Applicable Margin
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Greater than 3.50:1.0 .375% 1.25% 0.25%
-----------------------------------------------------------------------------------
Less than or equal to .375% 1.00% 0%
3.50:1.00, and greater than
2.50:1.00
-----------------------------------------------------------------------------------
Less than or equal to .300% .875% 0%
2.50:1.00, and greater than
2.00:1.00
-----------------------------------------------------------------------------------
Less than or equal to .250% .750% 0%
2.00:1.00
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
SCHEDULE 1.1
Revolving Credit Commitments and Addresses of Lenders
Revolving
Credit
Lender Commitment
------ ----------
The Chase Manhattan Bank $ 11,818,181.81
Bank of America National Trust and Savings Association $ 10,909,090.91
Bank of Nova Scotia $ 10,909,090.91
The First National Bank of Chicago $ 10,909,090.91
First Union National Bank of North Carolina $ 10,909,090.91
Xxxxxx Trust & Savings $ 10,909,090.91
LaSalle National Bank $ 10,909,090.91
National City Bank $ 9,090,909.09
Bank of New York $ 6,818,181.82
Credit Agricole Indosuez $ 6,818,181.82
TOTAL REVOLVING CREDIT COMMITMENT $100,000,000
------------
SCHEDULE 1.2
Term Loan Commitments of Lenders
Lender Term Loan Commitment
------ --------------------
The Chase Manhattan Bank $ 14,181,818.19
Bank of America National Trust and Savings Association $ 13,090,909.09
Bank of Nova Scotia $ 13,090,909.09
The First National Bank of Chicago $ 13,090,909.09
First Union National Bank of North Carolina $ 13,090,909.09
Xxxxxx Trust & Savings (Chicago) $ 13,090,909.09
LaSalle National Bank $ 13,090,909.09
National City Bank $ 10,909,090.91
Bank of New York $ 8,181,818.18
Credit Agricole Indosuez $ 8,181,818.18
TOTAL TERM LOAN COMMITMENT $120,000,000
------------
SCHEDULE 5.14
SUBSIDIARIES
At the Closing Date, the Subsidiaries of the Borrower, the
jurisdictions of their incorporation and the direct or indirect ownership
interest of the Borrower therein will be as follows:
Name Jurisdiction of Percentage Type of
---- Incorporation Interest Ownership
--------------- ---------- ---------
Xxxxx's Automotive Products, Inc. Delaware 100 direct
ACI Electronics Holding Corp. Delaware 100 direct
ACI Electronics Investment Corp. Delaware 100 direct
ACI Electronics, L.P. Delaware 100 indirect
ATC Distribution Group, Inc. Delaware 100 direct
ATS Remanufacturing, Inc. Delaware 100 indirect
Component Remanufacturing New Jersey 100 indirect
Specialists, Inc.
CRS Holdings Corp. New Jersey 100 direct
GM Remanufacturing Corp. Delaware 100 indirect
King-O-Matic Industries, Limited Ontario, Canada 100 indirect
Mascot Truck Parts, Inc. Ontario, Canada 100 direct
Metran Automatic Transmission Parts Corp. New York 000 xxxxxxxx
Xxxxxx Xxxx Acquisition Corp. Delaware 100 direct
Partes Remanufacturadas de Mexico Mexico 100 indirect
RPM Merit, Inc. Delaware 100 indirect
TranShop Management Systems, Inc. Alabama 100 indirect
SCHEDULE 5.16
ENVIRONMENTAL MATTERS
Reference is xxxxxx made to the second, third, fourth and fifth
paragraphs under the Section entitled "Business - Environmental" of the
Borrower's Prospectus, dated October 22, 1997, with respect to the offering of
3,500,000 shares of common stock. The Borrower does not believe, or have reason
to believe, that any of the matters disclosed in such sections could reasonably
be expected to have a Material Adverse Effect.
SCHEDULE 8.2
EXISTING INDEBTEDNESS
SCHEDULE 8.3
EXISTING LIENS
None.
SCHEDULE 8.10
EXISTING INVESTMENTS
