EXHIBIT 10.1
EXECUTION COPY
CREDIT AGREEMENT
among
RBS GLOBAL, INC.,
REXNORD CORPORATION,
VARIOUS LENDERS,
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Documentation Agents,
and
DEUTSCHE BANK SECURITIES INC.
and
CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch,
as JOINT LEAD ARRANGERS and JOINT BOOK RUNNERS
--------------------------------
Dated as of November 25, 2002
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit.........................................................................1
1.01 Commitments.........................................................................................1
1.02 Minimum Borrowing Amounts, etc......................................................................3
1.03 Notice of Borrowing.................................................................................3
1.04 Disbursement of Funds...............................................................................4
1.05 Notes...............................................................................................5
1.06 Conversions.........................................................................................6
1.07 Pro Rata Borrowings.................................................................................7
1.08 Interest............................................................................................7
1.09 Interest Periods....................................................................................8
1.10 Increased Costs, Illegality, etc....................................................................9
1.11 Compensation.......................................................................................11
1.12 Change of Lending Office...........................................................................11
1.13 Replacement of Lenders.............................................................................12
SECTION 2. Letters of Credit.................................................................................13
2.01 Letters of Credit..................................................................................13
2.02 Letter of Credit Requests; Notices of Issuance.....................................................13
2.03 Agreement to Repay Letter of Credit Drawings.......................................................14
2.04 Letter of Credit Participations....................................................................14
2.05 Increased Costs....................................................................................17
SECTION 3. Fees; Commitments.................................................................................17
3.01 Fees...............................................................................................17
3.02 Voluntary Reduction of Commitments.................................................................18
3.03 Mandatory Reductions of Commitments, etc...........................................................19
SECTION 4. Payments..........................................................................................19
4.01 Voluntary Prepayments..............................................................................19
4.02 Mandatory Prepayments..............................................................................21
4.03 Method and Place of Payment........................................................................24
4.04 Net Payments.......................................................................................24
SECTION 5. Conditions Precedent..............................................................................26
5.01 Conditions Precedent to the Initial Borrowing Date.................................................26
5.02 Conditions Precedent to All Credit Events..........................................................31
SECTION 6. Representations, Warranties and Agreements........................................................32
6.01 Corporate Status...................................................................................32
6.02 Corporate Power and Authority......................................................................32
(i)
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6.03 No Violation.......................................................................................32
6.04 Litigation.........................................................................................33
6.05 Use of Proceeds; Margin Regulations................................................................33
6.06 Governmental Approvals.............................................................................33
6.07 Investment Company Act.............................................................................33
6.08 Public Utility Holding Company Act.................................................................34
6.09 True and Complete Disclosure.......................................................................34
6.10 Financial Condition; Financial Statements..........................................................34
6.11 Security Interests.................................................................................35
6.12 Consummation of Certain Transactions...............................................................36
6.13 Tax Returns and Payments...........................................................................36
6.14 Compliance with ERISA..............................................................................36
6.15 Subsidiaries.......................................................................................38
6.16 Intellectual Property..............................................................................38
6.17 Environmental Matters..............................................................................38
6.18 Properties.........................................................................................39
6.19 Labor Relations....................................................................................39
6.20 Compliance with Statutes, etc......................................................................39
6.21 Subordination......................................................................................39
6.22 Capitalization.....................................................................................40
6.23 Legal Names; Type of Organization (and Whether a Registered Organization); Jurisdiction of
Organization; etc...............................................................................40
SECTION 7. Affirmative Covenants.............................................................................40
7.01 Information Covenants..............................................................................40
7.02 Books, Records and Inspections.....................................................................43
7.03 Insurance..........................................................................................43
7.04 Payment of Taxes...................................................................................43
7.05 Corporate Franchises...............................................................................44
7.06 Compliance with Statutes, etc......................................................................44
7.07 ERISA..............................................................................................44
7.08 Good Repair........................................................................................45
7.09 End of Fiscal Years; Fiscal Quarters...............................................................45
7.10 Additional Security; Further Assurances............................................................46
7.11 Compliance with Environmental Laws.................................................................47
7.12 Permitted Acquisitions.............................................................................48
SECTION 8. Negative Covenants................................................................................50
8.01 Changes in Business................................................................................50
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc.............................................50
8.03 Liens..............................................................................................52
8.04 Indebtedness.......................................................................................54
8.05 Consolidated Capital Expenditures..................................................................56
8.06 Advances, Investments and Loans....................................................................57
8.07 Limitation on Creation of Subsidiaries.............................................................59
8.08 Modifications; Prepayments; etc....................................................................60
(ii)
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8.09 Dividends, etc.....................................................................................61
8.10 Transactions with Affiliates.......................................................................62
8.11 Consolidated Interest Coverage Ratio...............................................................63
8.12 Consolidated Leverage Ratio........................................................................64
8.13 Limitation On Issuance of Stock....................................................................65
8.14 Change of Legal Names; Type of Organization (and Whether a Registered Organization); Jurisdiction
of Organization; etc............................................................................65
8.15 No Designation of Other Indebtedness as "Designated Senior Indebtedness"...........................66
8.16 Limitations on Restrictions Affecting Subsidiaries.................................................66
SECTION 9. Events of Default.................................................................................66
9.01 Payments...........................................................................................66
9.02 Representations, etc...............................................................................66
9.03 Covenants..........................................................................................67
9.04 Default Under Other Agreements.....................................................................67
9.05 Bankruptcy, etc....................................................................................67
9.06 ERISA..............................................................................................68
9.07 Security Documents.................................................................................68
9.08 Guaranty...........................................................................................68
9.09 Judgments..........................................................................................69
9.10 Change of Control..................................................................................69
SECTION 10. Definitions and Accounting Terms.................................................................69
10.01 Defined Terms.....................................................................................69
10.02 Certain Pro Forma Calculations...................................................................100
SECTION 11. The Agents......................................................................................102
11.01 Appointment......................................................................................102
11.02 Nature of Duties.................................................................................102
11.03 Lack of Reliance on the Agents...................................................................102
11.04 Certain Rights of the Agents.....................................................................103
11.05 Reliance.........................................................................................103
11.06 Indemnification..................................................................................103
11.07 The Agents in Their Individual Capacity..........................................................103
11.08 Holders..........................................................................................104
11.09 Resignation......................................................................................104
11.10 Releases in Connection With Grants of Certain Liens, etc.........................................105
SECTION 12. Miscellaneous...................................................................................105
12.01 Payment of Expenses, etc.........................................................................105
12.02 Right of Setoff..................................................................................106
12.03 Notices..........................................................................................106
12.04 Benefit of Agreement; Assignments; Participations................................................107
12.05 No Waiver; Remedies Cumulative...................................................................109
12.06 Payments Pro Rata................................................................................109
(iii)
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12.07 Calculations; Computations.......................................................................110
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL...........................111
12.09 Counterparts.....................................................................................112
12.10 Effectiveness....................................................................................112
12.11 Headings Descriptive.............................................................................112
12.12 Amendment or Waiver, etc.........................................................................112
12.13 Survival.........................................................................................114
12.14 Domicile of Loans................................................................................114
12.15 Confidentiality..................................................................................114
12.16 Lender Register..................................................................................115
12.17 Acquisition of Changzhou Xxxxxx Jianglang Transmissions Co. Ltd and Xxxxx Xxxxxx S.A.............115
12.18 Limitation on Certain Enforcement Actions........................................................116
SECTION 13. Holdings Guaranty...............................................................................116
13.01 The Guaranty.....................................................................................116
13.02 Bankruptcy.......................................................................................117
13.03 Nature of Liability..............................................................................117
13.04 Independent Obligation...........................................................................117
13.05 Authorization....................................................................................118
13.06 Reliance.........................................................................................118
13.07 Subordination....................................................................................118
13.08 Waiver...........................................................................................119
13.09 Enforcement......................................................................................119
SCHEDULE I -- Commitments
SCHEDULE II -- Lender Addresses
SCHEDULE III -- Real Properties
SCHEDULE IV -- Existing Indebtedness
SCHEDULE V -- ERISA
SCHEDULE VI -- Subsidiaries
SCHEDULE VII -- Legal Names, Type of Organization, Jurisdiction of
Organization
SCHEDULE VIII -- Existing Liens
SCHEDULE IX -- Existing Investments and Other Investments in Connection
with the Acquisition
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B-1 -- Form of Term Note
EXHIBIT B-2 -- Form of Revolving Note
EXHIBIT B-3 -- Form of Swingline Note
EXHIBIT C -- Form of Letter of Credit Request
EXHIBIT D -- Form of Section 4.04 Certificate
EXHIBIT E -- Form of Opinion of Xxxxxx & Xxxxxxx
EXHIBIT F -- Form of Officers' Certificate
(iv)
EXHIBIT G -- Form of Pledge Agreement
EXHIBIT H -- Form of Security Agreement
EXHIBIT I -- Form of Solvency Certificate
EXHIBIT J -- Form of Subsidiaries Guaranty
EXHIBIT K -- Form of Subordination Agreement
EXHIBIT L -- Form of Joinder Agreement
EXHIBIT M -- Form of Assignment Agreement
(v)
CREDIT AGREEMENT, dated as of November 25, 2002, among RBS GLOBAL,
INC., a Delaware corporation ("Holdings"), REXNORD CORPORATION, a Delaware
corporation (the "Borrower"), the Lenders party hereto from time to time,
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent (in such capacity,
the "Administrative Agent"), GENERAL ELECTRIC CAPITAL CORPORATION and WACHOVIA
BANK, NATIONAL ASSOCIATION, as Co-Documentation Agents, and DEUTSCHE BANK
SECURITIES INC. and CREDIT SUISSE FIRST BOSTON, acting through its Cayman
Islands Branch, as Joint Lead Arrangers and Joint Book Runners (in such
capacities, the "Joint Lead Arrangers" and, each, a "Joint Lead Arranger") (all
capitalized terms used herein and defined in Section 10 are used herein as
therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Lenders are willing to make available to the Borrower the credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 COMMITMENTS. Subject to and upon the terms and conditions herein
set forth, each Lender severally agrees to make a loan or loans (each, a "Loan"
and, collectively, the "Loans") to the Borrower, which Loans shall be drawn, to
the extent such Lender has a Commitment under such Facility, under the Term
Facility and the Revolving Facility, as set forth below:
(a) Loans under the Term Facility (each, a "Term Loan" and,
collectively, the "Term Loans") (i) shall be made only pursuant to one drawing
on the Initial Borrowing Date, (ii) except as hereinafter provided, may, at the
option of the Borrower, be incurred and maintained as, and/or converted into,
Base Rate Loans or Eurodollar Loans, provided that (A) all Term Loans made as
part of the same Borrowing shall, unless specifically provided herein, consist
of Term Loans of the same Type and (B) unless either the Administrative Agent
and each Joint Lead Arranger otherwise agrees in their sole discretion or the
Syndication Date has occurred (at which time this clause (B) shall no longer be
applicable), prior to the 60th day following the Initial Borrowing Date, Term
Loans may only be incurred and maintained as, and/or converted into, Eurodollar
Loans so long as all such outstanding Eurodollar Loans, together with all
outstanding Revolving Loans that are maintained as Eurodollar Loans, are subject
to a single Interest Period (which, unless the Administrative Agent otherwise
agrees in its sole discretion, may not begin prior to the third Business Day
after the Initial Borrowing Date) of one week, two weeks or one month which, in
any such case, begins and ends on the same day, and (iv) shall not exceed in
aggregate principal amount for any Lender at the time of incurrence thereof the
Term Commitment, if any, of such Lender as in effect on such date. Once repaid,
Term Loans may not be reborrowed.
(b) Loans under the Revolving Facility (each, a "Revolving Loan"
and, collectively, the "Revolving Loans") (i) shall be made at any time and from
time to time on and after the Initial Borrowing Date and prior to the RF
Maturity Date, (ii) except as hereinafter
provided, may, at the option of the Borrower, be incurred and maintained as,
and/or converted into, Base Rate Loans or Eurodollar Loans, provided that (A)
all Revolving Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Revolving Loans of the same Type and
(B) unless either the Administrative Agent and each Joint Lead Arranger
otherwise agrees in their sole discretion or the Syndication Date has occurred
(at which time this clause (B) shall no longer be applicable), prior to the 60th
day following the Initial Borrowing Date, Revolving Loans may only be incurred
and maintained as, and/or converted into, Eurodollar Loans so long as all such
outstanding Eurodollar Loans, together with all outstanding Term Loans that are
maintained as Eurodollar Loans, are subject to a single Interest Period (which,
unless the Administrative Agent otherwise agrees in its sole discretion, may not
begin prior to the third Business Day after the Initial Borrowing Date) of one
week, two weeks or one month which, in any such case, begins and ends on the
same day, (iii) may be repaid and reborrowed in accordance with the provisions
hereof and (iv) shall not exceed (giving effect to any incurrence thereof and
the use of the proceeds of such incurrence) for any Lender in aggregate
principal amount at any time outstanding that amount which, when combined with
such Lender's Adjusted RF Percentage of the sum of (x) the Letter of Credit
Outstandings at such time and (y) the outstanding principal amount of Swingline
Loans at such time, equals the Revolving Commitment of such Lender.
(c) Subject to and upon the terms and conditions herein set forth,
the Swingline Lender agrees to make at any time and from time to time on and
after the Initial Borrowing Date and prior to the Swingline Expiry Date, a loan
or loans to the Borrower (each, a "Swingline Loan," and, collectively, the
"Swingline Loans"), which Swingline Loans (i) shall be made and maintained as
Base Rate Loans, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed (giving effect to any incurrence
thereof and the use of the proceeds of such incurrence) in aggregate principal
amount at any time outstanding that amount which, when combined with the
aggregate principal amount of all Revolving Loans made by Non-Defaulting Lenders
then outstanding and the Letter of Credit Outstandings at such time, equals the
Adjusted Total Revolving Commitment then in effect (after giving effect to any
changes on such date) and (iv) shall not exceed in aggregate principal amount at
any time outstanding the Maximum Swingline Amount. Notwithstanding anything to
the contrary contained in this Section 1.01(c), the Swingline Lender shall not
make any Swingline Loan after it has received written notice from the Required
Lenders stating that one or more of the applicable conditions to Credit Events
specified in Section 5 are not then satisfied until such time as all such
conditions are satisfied.
(d) On any Business Day, the Swingline Lender may, in its sole
discretion, give notice to the RF Lenders that its outstanding Swingline Loans
shall be funded with a Borrowing of Revolving Loans (PROVIDED that each such
notice shall be deemed to have been automatically given upon the occurrence of
an Event of Default under Section 9.05 or upon the exercise of any of the
remedies provided in the last paragraph of Section 9), in which case a Borrowing
of Revolving Loans constituting Base Rate Loans (each such Borrowing, a
"Mandatory Borrowing") shall be made on the immediately succeeding Business Day
by all RF Lenders PRO RATA based on each RF Lender's Adjusted RF Percentage, and
the proceeds thereof shall be applied directly to repay the Swingline Lender for
such outstanding Swingline Loans. Each RF Lender hereby irrevocably agrees to
make Base Rate Loans upon one Business Day's prior notice pursuant to each
Mandatory Borrowing in the amount and in the manner specified in the
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preceding sentence and on the date specified in writing by the Swingline Lender
notwithstanding: (i) that the amount of the Mandatory Borrowing may not comply
with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any
conditions specified in Section 5.02 are then satisfied, (iii) whether a Default
or an Event of Default has occurred and is continuing, (iv) the date of such
Mandatory Borrowing and (v) the amount of the Total Revolving Commitment at such
time. In the event that any Mandatory Borrowing cannot for any reason be made on
the date otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code in respect of the
Borrower), each RF Lender hereby agrees that it shall forthwith purchase from
the Swingline Lender (without recourse or warranty) such assignment of the
outstanding Swingline Loans as shall be necessary to cause the RF Lenders to
share in such Swingline Loans ratably based upon their respective Adjusted RF
Percentages, PROVIDED that all interest payable on the Swingline Loans shall be
for the account of the Swingline Lender until the date the respective assignment
is purchased and, to the extent attributable to the purchased assignment, shall
be payable to the RF Lender purchasing same from and after such date of
purchase.
1.02 MINIMUM BORROWING AMOUNTS, ETC. The aggregate principal amount of
each Borrowing shall not be less than the Minimum Borrowing Amount. More than
one Borrowing may be incurred on any day, provided that at no time shall there
be outstanding more than fifteen Borrowings of Eurodollar Loans.
1.03 NOTICE OF BORROWING. (a) Whenever the Borrower desires to incur
Loans under any Facility (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Administrative Agent at the Notice Office, prior
to 12:00 Noon (New York time), at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of each proposed
incurrence of Eurodollar Loans and at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of each proposed
incurrence of Base Rate Loans. Each such notice (each, a "Notice of Borrowing")
shall be in the form of Exhibit A and shall be irrevocable and shall specify (i)
the Facility pursuant to which such incurrence is being made, (ii) the aggregate
principal amount of the Loans to be made pursuant to such incurrence, (iii) the
date of incurrence (which shall be a Business Day) and (iv) whether the
respective Borrowing shall consist of Base Rate Loans or Eurodollar Loans and,
if Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall promptly give each Lender with commitments pursuant
to the respective Facility written notice (or telephonic notice promptly
confirmed in writing) of each proposed incurrence of Loans, of such Lender's
proportionate share thereof and of the other matters covered by the Notice of
Borrowing.
(b) (i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give the Swingline Lender, prior to 2:00
P.M. (New York time) on the day such Swingline Loan is to be made, written
notice (or telephonic notice promptly confirmed in writing) of each Swingline
Loan to be made hereunder. Each such notice shall be irrevocable and shall
specify in each case (x) the date of such Borrowing (which shall be a Business
Day) and (y) the aggregate principal amount of the Swingline Loan to be made
pursuant to such Borrowing.
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(ii) Mandatory Borrowings shall be made upon the notice specified
in Section 1.01(d), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section 1.01(d).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent, the Swingline Lender (in the case of a Borrowing of
Swingline Loans), or the respective Letter of Credit Issuer (in the case of the
issuance of Letters of Credit), as the case may be, may prior to receipt of
written confirmation act without liability upon the basis of and consistent with
such telephonic notice, believed by the Administrative Agent, the Swingline
Lender or the respective Letter of Credit Issuer in good faith to be from an
Authorized Officer of the Borrower. In each such case, the Borrower hereby
waives the right to dispute the Administrative Agent's, the Swingline Lender's
or the respective Letter of Credit Issuer's record of the terms of such
telephonic notice, unless such record reflects gross negligence or willful
misconduct on the part of the Administrative Agent, the Swingline Lender or the
respective Letter of Credit Issuer, as the case may be.
1.04 DISBURSEMENT OF FUNDS. (a) No later than 1:00 P.M. (New York
time) on the date specified in each Notice of Borrowing or 2:00 P.M. (New York
time) on the date specified in a notice described in Section 1.03(b)(i), each
Lender with a Commitment under the respective Facility will make available its
PRO RATA share of each Borrowing requested to be made on such date or in the
case of Swingline Loans, the Swingline Lender shall make available the full
amount thereof in the manner provided below. All such amounts shall be made
available to the Administrative Agent in Dollars and immediately available funds
at the Payment Office and the Administrative Agent promptly will make available
to the Borrower by depositing to its account at the Payment Office or as
otherwise directed in the applicable Notice of Borrowing the aggregate of the
amounts so made available in the type of funds received. Unless the
Administrative Agent shall have been notified by any Lender prior to the date of
the proposed incurrence that such Lender does not intend to make available to
the Administrative Agent its portion of the Borrowing or Borrowings to be made
on such date, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on such date, and the
Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Lender and the Administrative Agent has made
available same to the Borrower, the Administrative Agent shall be entitled to
recover such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent may notify the Borrower, and, upon receipt of
such notice, the Borrower shall promptly pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
on demand from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds
Effective Rate for the first three days and at the interest rate otherwise
applicable to such Loans for each day thereafter or (y) if paid by the Borrower,
the then applicable rate of interest, calculated in accordance with Section
1.08, for the respective Loans.
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(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Lender as a result of any default by such
Lender hereunder.
1.05 NOTES. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made to it by each Lender shall be evidenced in the
Lender Register maintained by the Administrative Agent pursuant to Section 12.16
and, if requested by such Lender, shall also be evidenced (i) if Term Loans, by
a promissory note substantially in the form of Exhibit B-1 with blanks
appropriately completed in conformity herewith (each, a "Term Note" and,
collectively, the "Term Notes"), (ii) if Revolving Loans, by a promissory note
substantially in the form of Exhibit B-2 with blanks appropriately completed in
conformity herewith (each, a "Revolving Note" and, collectively, the "Revolving
Notes") and (iii) if Swingline Loans, by a promissory note substantially in the
form of Exhibit B-3, with blanks appropriately completed in conformity herewith
(the "Swingline Note").
(b) The Term Note issued to each Lender requesting same that has a
Term Commitment or outstanding Term Loans shall (i) be executed by the Borrower,
(ii) be payable to the order of such Lender and be dated the Initial Borrowing
Date (or, if issued after the Initial Borrowing Date, be dated the date of
issuance thereof), (iii) be in a stated principal amount equal to the Term
Commitment of such Lender (or, if issued after the Initial Borrowing Date, be in
a stated principal amount equal to the Term Loans of such Lender) and be payable
in the principal amount of Term Loans evidenced thereby, (iv) mature on the Term
Loan Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to mandatory repayment as provided in
Section 4.02 and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(c) The Revolving Note issued to each RF Lender requesting same
shall (i) be executed by the Borrower, (ii) be payable to the order of such RF
Lender and be dated the Initial Borrowing Date (or, if issued after the Initial
Borrowing Date, be dated the date of issuance thereof), (iii) be in a stated
principal amount equal to the Revolving Commitment of such RF Lender and be
payable in the principal amount of the Revolving Loans evidenced thereby, (iv)
mature on the RF Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(d) The Swingline Note issued to the Swingline Lender (if
requested) shall (i) be executed by the Borrower, (ii) be payable to the order
of the Swingline Lender and be dated the Initial Borrowing Date (or, if issued
after the Initial Borrowing Date, be dated the date of issuance thereof), (iii)
be in a stated principal amount equal to the Maximum Swingline Amount and be
payable in the principal amount of Swingline Loans evidenced thereby, (iv)
mature on the Swingline Expiry Date, (v) bear interest as provided in Section
1.08 in respect of the Base Rate Loans evidenced thereby, (vi) be subject to
mandatory prepayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
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(e) Each Lender will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the Borrower's obligations in respect of such
Loans.
(f) Notwithstanding anything to the contrary contained above in
this Section 1.05 or elsewhere in this Agreement, Notes shall only be delivered
to Lenders which at any time specifically request the delivery of such Notes. No
failure of any Lender to request or obtain a Note evidencing its Loans to the
Borrower shall affect or in any manner impair the obligations of the Borrower to
pay the Loans (and all related Obligations) incurred by the Borrower which would
otherwise be evidenced thereby in accordance with the requirements of this
Agreement, and shall not in any way affect the security or guaranties therefor
provided pursuant to the various Credit Documents. Any Lender which does not
have a Note evidencing its outstanding Loans shall in no event be required to
make the notations otherwise described in preceding clause (e). At any time when
any Lender requests the delivery of a Note to evidence any of its Loans, the
Borrower shall promptly execute and deliver to the respective Lender the
requested Note in the appropriate amount or amounts to evidence such Loans.
1.06 CONVERSIONS. The Borrower shall have the option to convert on any
Business Day all or a portion at least equal to the applicable Minimum Borrowing
Amount of the outstanding principal amount of the Loans (other than Swingline
Loans which at all times shall be maintained as Base Rate Loans) owing pursuant
to a single Facility into a Borrowing or Borrowings pursuant to such Facility of
another Type of Loan provided that (i) no partial conversion of a Borrowing of
Eurodollar Loans shall reduce the outstanding principal amount of the Eurodollar
Loans made pursuant to such Borrowing to less than the Minimum Borrowing Amount
applicable thereto, (ii) Base Rate Loans may not be converted into Eurodollar
Loans when a Default under Section 9.01 or 9.05 or an Event of Default is in
existence on the date of the proposed conversion if the Administrative Agent or
the Required Lenders shall have determined in its or their sole discretion not
to permit such conversion, (iii) Borrowings of Eurodollar Loans resulting from
this Section 1.06 shall be limited in number as provided in Section 1.02, (iv)
unless the Administrative Agent otherwise agrees in its sole discretion,
conversions may not be effected pursuant to this Section 1.06 which result in
Eurodollar Loans with an Interest Period beginning prior to the third Business
Day after the Initial Borrowing Date and (v) until the 60th day following the
Initial Borrowing Date, unless the Administrative Agent and each Joint Lead
Arranger otherwise agrees in their sole discretion or the Syndication Date has
occurred, any conversions into Eurodollar Loans shall be subject to the
applicable requirements contained in clause (B) of the proviso to Section
1.01(a)(ii) or 1.01(b)(ii), as the case may be. Each such conversion shall be
effected by the Borrower giving the Administrative Agent at its Notice Office,
prior to 12:00 Noon (New York time), at least three Business Days' (or one
Business Day's, in the case of a conversion into Base Rate Loans) prior written
notice (or telephonic notice promptly confirmed in writing) (each, a "Notice of
Conversion") specifying the Loans to be so converted (including the relevant
Facility), the Type of Loans to be converted into and, if to be converted into a
Borrowing of Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Lender prompt notice of any
such proposed conversion affecting any of its Loans.
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1.07 PRO RATA BORROWINGS. All Loans under this Agreement (other than
Swingline Loans) shall be made by the Lenders PRO RATA on the basis of their
Term Commitments or Revolving Commitments, as the case may be, PROVIDED, that
each Mandatory Borrowing shall be funded by the RF Lenders on the basis of their
Adjusted RF Percentages. It is understood that no Lender shall be responsible
for any default by any other Lender in its obligation to make Loans hereunder
and that each Lender shall be obligated to make the Loans provided to be made by
it hereunder, regardless of the failure of any other Lender to fulfill its
commitments hereunder.
1.08 INTEREST. (a) The unpaid principal amount of each Base Rate Loan
shall bear interest from the date of the Borrowing thereof until the earlier of
repayment or conversion thereof and maturity (whether by acceleration or
otherwise) at a rate per annum which shall at all times be the Applicable Margin
plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until the earlier of repayment
or conversion thereof and maturity (whether by acceleration or otherwise) at a
rate per annum which shall at all times be the Applicable Margin plus the
relevant Eurodollar Rate.
(c) All overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan shall in each case, bear interest at a
rate per annum equal to the greater of (x) the rate which is 2% in excess of the
rate then borne by such Loans and (y) the rate which is 2% in excess of the rate
otherwise applicable to Base Rate Loans of the respective Facility from time to
time, and all other overdue amounts payable hereunder and under any other Credit
Document shall bear interest at a rate per annum equal to the rate which is 2%
in excess of the rate applicable to Revolving Loans that are maintained as Base
Rate Loans from time to time. Interest that accrues under this Section 1.08(c)
shall be payable on demand.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, (x) quarterly in arrears on the
first Business Day of each January, April, July and October, (y) on the date of
any repayment or prepayment in full of all outstanding Base Rate Loans of any
Facility (but in the case of any such repayment or prepayment in full of all
outstanding Revolving Loans maintained as Base Rate Loans, only if the Total
Revolving Loan Commitment is contemporaneously terminated in its entirety), and
(z) at maturity (whether by acceleration or otherwise) and, after such maturity,
on demand, and (ii) in respect of each Eurodollar Loan, (x) on the last day of
each Interest Period applicable thereto and, in the case of an Interest Period
in excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (y) on the date of any prepayment or
conversion (on the amount prepaid or converted), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
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(f) The Administrative Agent, upon determining the interest rate
for any Borrowing of Eurodollar Loans for any Interest Period, shall promptly
notify the Borrower and the Lenders thereof.
1.09 INTEREST PERIODS. (a) At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of the Borrower (but otherwise subject to the
provisions of clause (B) of the proviso to Section 1.01(a)(ii) or 1.01(b)(ii),
as applicable), be a one, two, three, six or, to the extent available to all
Lenders with a Commitment under the respective Facility, nine or twelve month
period or, to the extent the provisions of clause (B) of the proviso to Section
1.01(a)(ii) or 1.01(b)(ii) are applicable (and subject to compliance with such
provisions), a one week, two week or one month period. Notwithstanding anything
to the contrary contained above:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period expires;
(ii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of
such calendar month;
(iii) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, PROVIDED that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) no Interest Period with respect to a Borrowing of Loans shall
extend beyond the respective Maturity Date therefor;
(v) no Interest Period with respect to any Term Loans may be
elected that would extend beyond any date upon which a Scheduled Repayment
is required to be made in respect of such Term Loans if, after giving
effect to the selection of such Interest Period, the aggregate principal
amount of Term Loans maintained as Eurodollar Loans with Interest Periods
ending after such date would exceed the aggregate principal amount of Term
Loans permitted to be outstanding after such Scheduled Repayment; and
(vi) no Interest Period may be elected at any time when a Default
under Section 9.01 or 9.05 or an Event of Default is then in existence if
the Administrative
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Agent or the Required Lenders shall have determined in its or their sole
discretion not to permit such election.
(b) If upon the expiration of any Interest Period, the Borrower
has failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing into a Borrowing of Base
Rate Loans effective as of such expiration.
1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the date of
this Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate or the making or
continuance of any Eurodollar Loan has become impracticable as a result of
a contingency occurring after the Effective Date which materially and
adversely affects the interbank Eurodollar market;
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans (other than taxes addressed in Section 4.04 and any
increased cost or reduction in the amount received or receivable resulting
from the imposition of or a change in the rate of taxes on the net income
or net profits of such Lender imposed by the jurisdiction in which its
principal office or applicable lending office is located) because of (x)
any change since the Effective Date in any applicable law, governmental
rule, regulation, guideline or order (or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, guideline or order) (such as, for example,
but not limited to, a change in the basis of taxation of payments to a
Lender of the principal of or interest on the Eurodollar Loans or any other
amounts payable hereunder or official reserve requirements, but, in all
events, excluding reserves required under Regulation D to the extent
included in the computation of the Eurodollar Rate) and/or (y) other
circumstances arising after the Effective Date affecting the interbank
Eurodollar market or the position of such Lender in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has become unlawful by compliance by such Lender in good faith with
any law, governmental rule, regulation, guideline or order (or would
conflict with any such governmental rule, regulation, guideline or order
not having the force of law but with which such Lender customarily complies
even though the failure to comply therewith would not be unlawful);
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on such date and (y) within ten Business
Days of the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Borrower and to the
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Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given
by the Borrower with respect to Eurodollar Loans which have not yet been
incurred shall be deemed rescinded by the Borrower, (y) in the case of clause
(ii) above, the Borrower shall pay to such Lender, within 10 Business Days after
Borrower's receipt of written demand therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its reasonable discretion shall determine after
consultation with the Borrower) as shall be required to compensate such Lender
for such increased costs or reductions in amounts receivable hereunder (a
written notice as to the additional amounts owed to such Lender, describing the
basis for such increased costs and showing the calculation thereof, submitted to
the Borrower by such Lender shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) and (z) in the case of clause
(iii) above, the Borrower shall take one of the actions specified in Section
1.10(b) as promptly as possible and, in any event, within the time period
required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii), the Borrower may (and in the
case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the
Borrower shall within the time period required by law) either (x) if the
affected Eurodollar Loan is then being made pursuant to a Borrowing, cancel said
Borrowing by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender pursuant to Section 1.10(a)(ii) or (iii), or (y) if the affected
Eurodollar Loan is then outstanding, upon at least three Business Days' notice
to the Administrative Agent, require the affected Lender to convert each such
Eurodollar Loan into a Base Rate Loan (which conversion, in the case of the
circumstances described in Section 1.10(a)(iii), shall occur no later than the
last day of the Interest Period then applicable to such Eurodollar Loan (or such
earlier date as shall be required by applicable law)); PROVIDED, that if more
than one Lender is affected at any time, then all affected Lenders must be
treated the same pursuant to this Section 1.10(b). Each Lender, upon determining
in good faith that any additional amounts will be payable pursuant to this
Section 1.10(b), will give prompt written notice thereof to the Borrower, which
notice shall set forth the basis of the calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish the
Borrower's obligations to pay additional amounts pursuant to this Section
1.10(b) upon the subsequent receipt of such notice.
(c) If any Lender shall have determined that the adoption or
initial effectiveness of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, in each case
after the Effective Date, or compliance by such Lender or its parent corporation
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency first
made after the Effective Date, has or would have the effect of reducing the rate
of return on such Lender's or its parent corporation's capital or assets as a
consequence of its commitments or obligations hereunder to a level below that
which such Lender or its parent corporation could have achieved but for such
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adoption, effectiveness, change or compliance (taking into consideration such
Lender's or its parent corporation's policies with respect to capital adequacy),
then from time to time, within 10 Business Days after demand by such Lender
(with a copy to the Administrative Agent), the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender or its parent
corporation for such reduction. Each Lender, upon determining in good faith that
any additional amounts will be payable pursuant to this Section 1.10(c), will
give prompt written notice thereof to the Borrower, which notice shall describe
the basis for such claim and set forth in reasonable detail the calculation of
such additional amounts, although the failure to give any such notice shall not
release or diminish any of the Borrower's obligations to pay additional amounts
pursuant to this Section 1.10(c) upon the subsequent receipt of such notice.
1.11 COMPENSATION. (a) The Borrower shall compensate each Lender, upon
its written request (which request shall set forth the basis for requesting such
compensation and reasonably detailed calculations thereof), for all reasonable
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund its Eurodollar Loans but
excluding in any event the loss of anticipated profits) which such Lender may
actually sustain: (i) if for any reason (other than a default by such Lender or
the Administrative Agent) a Borrowing of Eurodollar Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by the Borrower or deemed withdrawn pursuant to
Section 1.10(a)); (ii) if any prepayment, repayment or conversion of any of its
Eurodollar Loans occurs on a date which is not the last day of an Interest
Period applicable thereto; (iii) if any prepayment of any of its Eurodollar
Loans is not made on any date specified in a notice of prepayment given by the
Borrower; or (iv) as a consequence of (x) any other default by the Borrower to
repay its Eurodollar Loans when required by the terms of this Agreement or (y)
an election made pursuant to Section 1.10(b) or (z) the early termination of an,
or the funding of a shortened, Interest Period (other than an Interest Period
elected pursuant to Section 1.09(a) which may be required by any Lender in
connection with any assignment effected after the Initial Borrowing Date and on
or prior to the first to occur of the 60th day after the Initial Borrowing Date
and the Syndication Date).
(b) Notwithstanding anything in this Agreement to the contrary, to
the extent any notice or request required by Section 1.10, 1.11, 2.05 or 4.04 is
given by any Lender more than 180 days after such Lender obtained, or reasonably
should have obtained, knowledge of the occurrence of the event giving rise to
the additional costs, reductions in amounts, losses, taxes or other additional
amounts of the type described in such Section, such Lender shall not be entitled
to compensation under Section 1.10, 1.11, 2.05 or 4.04 for any amounts incurred
or accruing prior to the date on which such notice is given to the Borrower.
1.12 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.05 or 4.04 with respect to such Lender, it will, if requested
by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans
or Letter of Credit participations affected by such event, PROVIDED that such
designation is made on such terms that such Lender and its lending office, in
its determination, suffer no material economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the
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event giving rise to the operation of any such Section. Nothing in this Section
1.12 shall affect or postpone any of the obligations of the Borrower or the
right of any Lender provided in Section 1.10, 2.05 or 4.04.
1.13 REPLACEMENT OF LENDERS. (x) Upon the occurrence of any event
giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c),
Section 1.11, Section 2.05 or Section 4.04 with respect to any Lender which
results in such Lender charging to the Borrower increased costs materially in
excess of those being charged generally by the Lenders, (y) if a Lender becomes
a Defaulting Lender and/or (z) in the case of a refusal by a Lender to consent
to a proposed change, waiver, discharge or termination with respect to this
Agreement which has been approved by the Required Lenders, the Borrower shall
have the right to replace such Lender (the "Replaced Lender") with one or more
other Eligible Transferee or Transferees, none of whom shall constitute a
Defaulting Lender at the time of such replacement (collectively, the
"Replacement Lender") reasonably acceptable to the Administrative Agent,
provided that (i) at the time of any replacement pursuant to this Section 1.13,
the Replacement Lender shall enter into one or more Assignment Agreements
pursuant to Section 12.04(b) (and with all fees payable pursuant to said Section
12.04(b) to be paid by the Replacement Lender) pursuant to which the Replacement
Lender shall acquire all of the Commitments and outstanding Loans of, and in
each case participations in Letters of Credit by, the Replaced Lender and, in
connection therewith, shall pay to (x) the Replaced Lender an amount equal to
the sum of (A) an amount equal to the principal of, and all accrued and unpaid
interest on, all outstanding Loans of the Replaced Lender, (B) an amount equal
to all Unpaid Drawings that have been funded by (and not reimbursed to) such
Replaced Lender, together with all accrued and unpaid interest with respect
thereto at such time and (C) an amount equal to all accrued and unpaid Fees
owing to the Replaced Lender pursuant to Section 3.01, (y) each Letter of Credit
Issuer an amount equal to such Replaced Lender's Adjusted RF Percentage (for
this purpose, and for the purpose of clause (z) below, determined as if the
adjustment described in clause (y) of the immediately succeeding sentence had
been made with respect to such Replaced Lender) of any Unpaid Drawing (which at
such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Lender and (z) the Swingline Lender, any
portion of a Mandatory Borrowing as to which the Replaced Lender is then in
default, and (ii) all obligations of the Borrower owing to the Replaced Lender
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Lender by the Borrower concurrently with such
replacement. Upon the execution of the respective Assignment Agreements, the
payment of amounts referred to in clauses (i) and (ii) above and, if so
requested by the Replacement Lender, delivery to the Replacement Lender of the
appropriate Note or Notes executed by the Borrower, (x) the Replacement Lender
shall become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder, except with respect to indemnification provisions
applicable to the Replaced Lender under this Agreement, which shall survive as
to such Replaced Lender and (y) in the case of a replacement of a Defaulting
Lender with a Non-Defaulting Lender, the Adjusted RF Percentages of the
respective Lenders and the Adjusted Total Revolving Commitment shall be
automatically adjusted at such time to give effect to such replacement.
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SECTION 2. LETTERS OF CREDIT.
2.01 LETTERS OF CREDIT. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request of any Letter of Credit
Issuer at any time and from time to time on or after the Initial Borrowing Date
and prior to the tenth Business Day prior to the RF Maturity Date that it issue,
for the account of the Borrower (x) trade letters of credit in support of trade
obligations of the Borrower and its Subsidiaries incurred in the ordinary course
of business (such letters of credit issued for such purposes, "Trade Letters of
Credit") and (y) standby letters of credit issued for any other lawful purposes
of the Borrower and its Subsidiaries (such letters of credit issued for such
purposes, "Standby Letters of Credit"), and subject to and upon the terms and
conditions herein set forth, each Letter of Credit Issuer agrees to issue from
time to time following its receipt of the respective Letter of Credit Request to
it, irrevocable letters of credit denominated in Dollars or an Alternate
Currency and issued on a sight basis only, in such form as may be approved by
the respective Letter of Credit Issuer and the Administrative Agent. "Letters of
Credit" shall include Trade Letters of Credit and Standby Letters of Credit.
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall
be issued if after giving effect thereto the aggregate amount of the Letter of
Credit Outstandings at such time would exceed either (x) $25,000,000 or (y) when
added to the sum of (I) the aggregate principal amount of all Revolving Loans
made by Non-Defaulting Lenders then outstanding, plus (II) the aggregate
principal amount of all Swingline Loans then outstanding, an amount equal to the
Adjusted Total Revolving Commitment at such time; (ii) no Letter of Credit
denominated in an Alternate Currency shall be issued if after giving effect
thereto the aggregate amount of the Letter of Credit Outstandings with respect
to all Letters of Credit denominated in an Alternative Currency would exceed
$7,500,000; (iii) each Standby Letter of Credit shall have an expiry date
occurring not later than 12 months after such Letter of Credit's date of
issuance although any Standby Letter of Credit may be extendable for successive
periods of up to 12 months, but not beyond the tenth Business Day next preceding
the RF Maturity Date, on terms acceptable to the respective Letter of Credit
Issuer and in no event shall any Standby Letter of Credit have an expiry date
occurring later than the tenth Business Day next preceding the RF Maturity Date;
(iv) each Trade Letter of Credit shall have an expiry date occurring not later
than (x) 180 days after such Letter of Credit's date of issuance or (y) the date
ten Business Days prior to the RF Maturity Date; and (v) each Letter of Credit
issued to support obligations of any Foreign Subsidiary shall be deemed to
constitute a Contingent Obligation pursuant to Section 8.04(k) and shall only be
permitted to be issued if in accordance with the requirements of said Section
8.04(k).
2.02 LETTER OF CREDIT REQUESTS; NOTICES OF ISSUANCE. (a) Whenever it
desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the respective Letter of Credit Issuer written notice
thereof (including by way of facsimile transmission) in the form of Exhibit C,
appropriately completed (each, a "Letter of Credit Request"), prior to 1:00 P.M.
(New York time) at least two Business Days (or such shorter period as may be
acceptable to the respective Letter of Credit Issuer) prior to the proposed date
of issuance (which shall be a Business Day), which Letter of Credit Request
shall include any other documents that the respective Letter of Credit Issuer
customarily requires in connection therewith.
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(b) The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Borrower to the Lenders that such Letter
of Credit may be issued in accordance with, and will not violate the
requirements of, Section 2.01. Notwithstanding anything to the contrary
contained in this Section 2, no Letter of Credit Issuer shall issue any Letters
of Credit after it has received written notice from the Required Lenders stating
that one or more of the applicable conditions to Credit Events specified in
Section 5 are not then satisfied until such time as all such conditions are
satisfied. Upon the issuance of or modification or amendment to any Standby
Letter of Credit, the respective Letter of Credit Issuer shall promptly notify
the Borrower and the Administrative Agent, in writing of such issuance,
modification or amendment and such notice shall be accompanied by a copy of such
Letter of Credit or the respective modification or amendment thereto, as the
case may be. Promptly after receipt of such notice the Administrative Agent
shall notify the Participants, in writing, of such issuance, modification or
amendment. On the first Business Day of each week, each Letter of Credit Issuer
shall furnish the Administrative Agent with a written (including via facsimile)
report of the daily aggregate outstandings of Trade Letters of Credit issued by
the such Letter of Credit Issuer for the immediately preceding week.
2.03 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrower
hereby agrees to reimburse each Letter of Credit Issuer, by making payment to
the Administrative Agent at the Payment Office, for any payment or disbursement
made by such Letter of Credit Issuer under any Letter of Credit (each such
amount (calculated using the Dollar Equivalent thereof in the case of any
payment or disbursement made in an Alternate Currency) so paid or disbursed
until reimbursed, with Revolving Loan proceeds or otherwise, an "Unpaid
Drawing") promptly after, and in any event within three Business Days after the
date on which, the Borrower is notified by such Letter of Credit Issuer of such
payment or disbursement with interest on the amount so paid or disbursed by such
Letter of Credit Issuer, to the extent not reimbursed prior to 1:00 P.M. (New
York time) on the date of such payment or disbursement, from and including the
date paid or disbursed to but not including the date such Letter of Credit
Issuer is reimbursed therefor at a rate per annum which shall be the Base Rate
plus the Applicable Margin for Revolving Loans maintained as Base Rate Loans as
in effect from time to time (plus an additional 2% per annum if not reimbursed
by the third Business Day after the date of such notice of payment or
disbursement), such interest also to be payable on demand.
(b) The Borrower's obligation under this Section 2.03 to reimburse
each Letter of Credit Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against such Letter of Credit Issuer,
the Administrative Agent or any Lender, including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit to
conform substantially to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
drawing provided that the Borrower shall not be obligated to reimburse such
Letter of Credit Issuer for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Letter of Credit
Issuer.
2.04 LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the
issuance by any Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to
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have sold and transferred to each other RF Lender, and each such RF Lender
(each, a "Participant") shall be deemed irrevocably and unconditionally to have
purchased and received from such Letter of Credit Issuer, without recourse or
warranty, an undivided interest and participation, to the extent of such
Participant's Adjusted RF Percentage, in such Letter of Credit, each substitute
letter of credit, each drawing made thereunder and the obligations of the
Borrower under this Agreement with respect thereto (although the Letter of
Credit Fee shall be payable directly to the Administrative Agent for the account
of the RF Lenders as provided in Section 3.01(b) and the Participants shall have
no right to receive any portion of any Facing Fees) and any security therefor or
guaranty pertaining thereto. Upon any change in the Adjusted RF Percentages
pursuant to Section 1.13 and/or 12.04(b) and/or as a result of a Lender Default,
it is hereby agreed that, with respect to all outstanding Letters of Credit and
Unpaid Drawings, there shall be an automatic adjustment to the participations
pursuant to this Section 2.04 to reflect the new Adjusted RF Percentages of all
of the Lenders with Revolving Commitments as a result thereof.
(b) In determining whether to pay under any Letter of Credit, no
Letter of Credit Issuer shall have any obligation relative to the Participants
other than to determine that any documents required to be delivered under such
Letter of Credit have been delivered and that they substantially comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by any Letter of Credit Issuer under or in connection with any
Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create for such Letter of Credit Issuer any
resulting liability.
(c) In the event that any Letter of Credit Issuer makes any
payment under any Letter of Credit and the Borrower shall not have reimbursed
such amount in full to such Letter of Credit Issuer pursuant to Section 2.03(a),
such Letter of Credit Issuer shall promptly notify the Administrative Agent, and
the Administrative Agent shall promptly notify each Participant of such failure,
and each Participant shall promptly and unconditionally pay to the
Administrative Agent for the account of such Letter of Credit Issuer, the amount
of such Participant's Adjusted RF Percentage of such Unpaid Drawing in Dollars
and in same day funds provided that no Participant shall be obligated to pay to
the Administrative Agent its Adjusted RF Percentage of such unreimbursed amount
for any wrongful payment made by such Letter of Credit Issuer under a Letter of
Credit as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of such Letter of Credit Issuer. If the Administrative
Agent so notifies any Participant prior to 11:00 A.M. (New York time) on any
Business Day, such Participant shall make available to the Administrative Agent,
such Participant's Adjusted RF Percentage of the amount of such Unpaid Drawing
on such Business Day in same day funds. If and to the extent such Participant
shall not have so made its Adjusted RF Percentage of the amount of such Unpaid
Drawing available to the Administrative Agent, such Participant agrees to pay to
the Administrative Agent for the account of such Letter of Credit Issuer,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is so paid to the Administrative Agent
at the overnight Federal Funds Effective Rate for the first three days and at
the interest rate applicable to Revolving Loans that are maintained as Base Rate
Loans for each day thereafter. The failure of any Participant to so pay to the
Administrative Agent its Adjusted RF Percentage of any Unpaid Drawing shall not
relieve any other Participant of its obligation hereunder to so pay to the
Administrative Agent its Adjusted RF Percentage of any Unpaid Drawing on the
date required, as specified above, but no Participant shall be
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responsible for the failure of any other Participant to so pay to the
Administrative Agent such other Participant's Adjusted RF Percentage of any such
payment.
(d) Whenever any Letter of Credit Issuer receives a payment of a
reimbursement obligation (or interest thereon) as to which the Administrative
Agent has received for the account of such Letter of Credit Issuer any payments
from the Participants pursuant to clause (c) above, such Letter of Credit Issuer
shall pay to the Administrative Agent and the Administrative Agent shall
promptly pay to each Participant which has paid its Adjusted RF Percentage
thereof, in Dollars and in same day funds, an amount equal to such Participant's
Adjusted RF Percentage of the principal amount thereof and interest thereon
accruing after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Letter of Credit Issuer with
respect to Letters of Credit issued by such Letter of Credit Issuer shall be
irrevocable and not subject to counterclaim, set-off or other defense or any
other qualification or exception whatsoever (provided that no Participant shall
be required to make payments resulting from the respective Letter of Credit
Issuer's gross negligence or willful misconduct) and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which any Credit Party or any of their Subsidiaries may have at any time
against a beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit (or any Person for whom any such transferee may be
acting), the Administrative Agent, any Joint Lead Arranger, any Letter of
Credit Issuer, any Lender or other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between
the Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
(f) To the extent the respective Letter of Credit Issuer is not
indemnified by the Borrower, the Participants will reimburse and indemnify such
Letter of Credit Issuer, in proportion to their respective RF Percentages, for
and against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by such Letter
of Credit Issuer in performing its respective duties in any way relating to or
arising out of its
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issuance of Letters of Credit; PROVIDED that no Participant shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Letter of Credit Issuer's gross negligence or willful misconduct.
2.05 INCREASED COSTS. If at any time after the Effective Date, the
adoption or initial effectiveness of any applicable law, rule or regulation, or
any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Letter
of Credit Issuer or any Participant with any request or directive (whether or
not having the force of law) first made by any such authority, central bank or
comparable agency, in each case after the Effective Date, shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued by any Letter of Credit
Issuer or any Participant's participation therein, or (ii) shall impose on any
Letter of Credit Issuer or any Participant any other conditions affecting this
Agreement, any Letter of Credit or any Participant's participation therein; and
the result of any of the foregoing is to increase the cost to such Letter of
Credit Issuer or such Participant of issuing, maintaining or participating in
any Letter of Credit, or to reduce the amount of any sum received or receivable
by such Letter of Credit Issuer or such Participant hereunder (other than taxes
addressed in Section 4.04 and any increased cost or reduction in the amount
received or receivable resulting from the imposition of or a change in the rate
of taxes on the net income or net profits of such Lender imposed by the
jurisdiction in which its principal office or applicable lending office is
located), then, within 10 Business Days of Borrower's receipt of a written
demand to the Borrower by such Letter of Credit Issuer or such Participant (a
copy of which notice shall be sent by such Letter of Credit Issuer or such
Participant to the Administrative Agent), the Borrower shall pay to such Letter
of Credit Issuer or such Participant such additional amount or amounts as will
compensate such Letter of Credit Issuer or such Participant for such increased
cost or reduction. A certificate submitted to the Borrower by such Letter of
Credit Issuer or such Participant, as the case may be (a copy of which
certificate shall be sent by such Letter of Credit Issuer or such Participant to
the Administrative Agent), setting forth the basis for, and reasonably detailed
calculations of, the determination of such additional amount or amounts
necessary to compensate such Letter of Credit Issuer or such Participant as
aforesaid shall be conclusive and binding on the Borrower absent manifest error,
although the failure to deliver any such certificate shall not release or
diminish any of the Borrower's obligations to pay additional amounts pursuant to
this Section 2.05 upon the subsequent receipt thereof.
SECTION 3. FEES; COMMITMENTS.
3.01 FEES. (a) The Borrower agrees to pay to the Administrative Agent
a commitment commission ("Commitment Commission") for the account of each RF
Lender that is a Non-Defaulting Lender for the period from and including the
Effective Date to but not including the date upon which the Total Revolving
Commitment has been terminated, computed at a rate per annum equal to 1/2 of 1%
of the Unutilized Revolving Commitment of such Non-Defaulting Lender as in
effect from time to time. Such Commitment Commission shall be due and payable in
arrears on the first Business Day of each January, April, July and October and
on the date upon which the Total Revolving Commitment is terminated.
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(b) The Borrower agrees to pay to the Administrative Agent, for
the account of each RF Lender, PRO RATA on the basis of their respective
Adjusted RF Percentages, a fee in respect of each Letter of Credit (the "Letter
of Credit Fee") for the period from and including the date of issuance of such
Letter of Credit to and including the date of termination or expiration of such
Letter of Credit, computed at a rate per annum equal to the Applicable Margin as
in effect from time to time during such period with respect to Revolving Loans
that are maintained as Eurodollar Loans on the daily Stated Amount of each such
Letter of Credit. Accrued Letter of Credit Fees shall be due and payable
quarterly in arrears on the first Business Day of each January, April, July and
October of each year and on the first day on or after the termination of the
Total Revolving Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the respective Letter of Credit
Issuer a fee in respect of each Letter of Credit issued by it (the "Facing Fee")
for the period from and including the date of issuance of such Letter of Credit
to and including the date of termination or expiration of such Letter of Credit,
computed for each day during such period at the rate of 1/4 of 1% per annum on
the Stated Amount of such Letter of Credit as in effect from time to time;
PROVIDED that in any event the minimum amount of Facing Fees payable in any
twelve-month period for any Letter of Credit shall not be less than $500; it
being agreed that, on the day of issuance of any Letter of Credit and on each
anniversary thereof prior to the termination or expiration of such Letter of
Credit, if $500 will exceed the amount of Facing Fees that will accrue with
respect to such Letter of Credit for the immediately succeeding twelve-month
period, $125 shall be payable in respect of such Letter of Credit on each date
on which Facing Fees are required to be paid pursuant to this clause (c) during
such 12-month period (and, if the Total Revolving Commitment terminates before
the end of such 12 month period, on the date of such termination there shall be
paid an amount equal to the amount by which $500 exceeds the Facing Fees
actually paid with respect to such Letter of Credit since the date of the
issuance thereof or, if later, the last anniversary of such issuance which has
theretofore occurred). Accrued Facing Fees shall be due and payable quarterly in
arrears on the first Business Day of each January, April, July and October of
each year and on the first day on or after the termination of the Total
Revolving Commitment upon which no Letters of Credit remain outstanding.
(d) The Borrower agrees to pay directly to the respective Letter
of Credit Issuer upon each issuance of, payment under, and/or amendment of, a
Letter of Credit such amount as shall at the time of such issuance, payment or
amendment be the administrative charge which such Letter of Credit Issuer is
customarily charging for issuances of, payments under or amendments of, letters
of credit issued by it.
(e) The Borrower shall pay to the Joint Lead Arrangers and the
Administrative Agent for their respective accounts, such fees as may be agreed
to by the Borrower and such Persons.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 VOLUNTARY REDUCTION OF COMMITMENTS. (a) Upon at least one
Business Day's prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at the Notice Office (which notice shall be deemed
to be given on a certain day only if
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given before 2:00 P.M. (New York time) on such day and shall be promptly
transmitted by the Administrative Agent to each of the Lenders), the Borrower
shall have the right, without premium or penalty, to terminate or partially
reduce the Total Unutilized Revolving Commitment provided that (x) any such
partial reduction shall apply to proportionately and permanently reduce the
Revolving Commitment of each Lender, (y) no such reduction shall reduce any
Non-Defaulting Lender's Revolving Commitment in an amount greater than the then
Unutilized Revolving Commitment of such Lender and (z) any partial reduction
pursuant to this Section 3.02 shall be in the amount of at least $1,000,000.
(b) In the event of a refusal by a Lender to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 12.12(b), the Borrower may, subject to its
compliance with the requirements of Section 12.12(b), upon five Business Days'
prior written notice to the Administrative Agent at the Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders)
terminate all of the Commitments of such Lender, so long as all Loans, together
with accrued and unpaid interest, Fees and all other amounts, owing to such
Lender are repaid concurrently with the effectiveness of such termination
pursuant to Section 4.01(b) (at which time Schedule I shall be deemed modified
to reflect such changed amounts, and the Adjusted RF Percentages of the various
RF Lenders shall be automatically adjusted to give effect to such changes) and
any mandatory repayments required pursuant to Section 4.02(A)(a) as a result of
the changes to the Adjusted RF Percentages of the various RF Lenders are made,
and at such time, such Lender shall no longer constitute a "Lender" for purposes
of this Agreement, except with respect to indemnifications under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 11.06 and
12.01), which shall survive as to such repaid Lender.
3.03 MANDATORY REDUCTIONS OF COMMITMENTS, ETC. (a) The Total
Commitment (and the Term Commitment and Revolving Commitment of each Lender)
shall terminate in its entirety at 11:59 P.M. (New York time) on the Expiration
Date unless the Initial Borrowing Date has occurred on or before such date.
(b) The Total Revolving Commitment (and the Revolving Commitmentof
each Lender) shall terminate in its entirety on the RF Maturity Date.
(c) The Total Revolving Commitment shall be reduced on each day on
which Term Loans are required to be repaid (or would be required to be repaid if
Term Loans were then outstanding) pursuant to Section 4.02(A)(c), (d) and/or (g)
by the amount, if any, by which the amount required to be applied to repay
outstanding principal of Term Loans pursuant to Section 4.02(B)(a) as a result
thereof (determined as if an unlimited amount of Term Loans were actually
outstanding) exceeds the aggregate principal amount of Term Loans actually
outstanding on such date.
SECTION 4. PAYMENTS.
4.01 VOLUNTARY PREPAYMENTS. (a) The Borrower shall have the right to
prepay Loans in whole or in part, without premium or, except as provided in
Section 1.11(a), penalty, from time to time on the following terms and
conditions: (i) the Borrower shall give the
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Administrative Agent at the Payment Office written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay the Loans, whether such
Loans are Term Loans, Revolving Loans or Swingline Loans, the amount of such
prepayment and (A) in the case of Eurodollar Loans, the specific Borrowing(s)
pursuant to which made and (B) in the case of Term Loans, the manner in which
such prepayment shall be applied to the then remaining Scheduled Repayments to
repay outstanding principal of Term Loans, which notice shall be given by the
Borrower prior to 3:00 P.M. (New York time) on (x) the Business Day prior to the
date of such prepayment in the case of prepayments of Base Rate Loans (or on the
same day of such prepayment in the case of prepayments of Swingline Loans) or
(y) three Business Days prior to the date of such prepayment in the case of
prepayments of Eurodollar Loans, and which notice shall, except in the case of a
prepayment of Swingline Loans, promptly be transmitted by the Administrative
Agent to each of the Lenders; (ii) (x) each partial prepayment of any Borrowing
(other than a Borrowing of Swingline Loans) shall be in an aggregate principal
amount of at least $500,000 and (y) each partial prepayment of Swingline Loans
shall be in an aggregate principal amount of at least $100,000, provided that no
partial prepayment of Eurodollar Loans made pursuant to a Borrowing shall reduce
the aggregate principal amount of the Loans outstanding pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto; (iii) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied PRO RATA among such Loans, provided that at the
Borrower's election in connection with any prepayment of Revolving Loans
pursuant to this Section 4.01, such prepayment shall not be applied to any
Revolving Loans of a Defaulting Lender; and (iv) each prepayment of Term Loans
pursuant to this Section 4.01 shall be applied to reduce the then remaining
Scheduled Repayments in the manner directed by the Borrower to the
Administrative Agent in writing as provided above, provided that if no such
written direction is given with respect to the application of any such
prepayment of Term Loans, such prepayment shall be applied (x) first, in direct
order of maturity to those Scheduled Repayments which will be due and payable
within 12 months after the date of such prepayment and (y) second, to the extent
in excess thereof, to the then remaining Scheduled Repayments on a PRO RATA
basis (based on the then remaining unpaid principal amount of such Scheduled
Repayments after giving effect to all prior reductions thereto).
(b) In the event of a refusal by a Lender to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 12.12(b), the Borrower may, upon five Business Days'
prior written notice to the Administrative Agent at the Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders)
repay all Loans, together with accrued and unpaid interest, Fees, and other
amounts owing to such Lender in accordance with, and subject to the requirements
of, said Section 12.12(b) so long as (I) all Commitments of such Lender are
terminated concurrently with such repayment pursuant to Section 3.02(b) (at
which time Schedule I shall be deemed modified to reflect the changed
Commitments, and the Adjusted RF Percentages of the various RF Lenders shall be
automatically adjusted to give effect to such changes), (II) any mandatory
repayments required pursuant to Section 4.02(A)(a) as a result of the changes to
the Adjusted RF Percentages of the various RF Lenders are made and (III) the
consents, if any, required under Section 12.12(b) in connection with the
repayment pursuant to this clause (b) have been obtained. Each prepayment of any
Term Loans pursuant to this Section 4.01(b) shall be applied (except to the
extent such Term Loans are being replaced pursuant to Section 1.13) to reduce
the
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then remaining Scheduled Repayments of the Term Loans on a PRO RATA basis (based
upon the then remaining unpaid principal amounts of such Scheduled Repayments
after giving effect to all prior reductions thereto).
4.02 MANDATORY PREPAYMENTS.
(A) Requirements:
(a) (i) If on any date (and after giving effect to all other
repayments on such date) the sum of the aggregate outstanding principal amount
of Revolving Loans made by Non-Defaulting Lenders, the aggregate outstanding
principal amount of Swingline Loans and the aggregate amount of Letter of Credit
Outstandings exceeds the Adjusted Total Revolving Commitment as then in effect,
the Borrower shall repay on such date the principal of outstanding Swingline
Loans and, after all Swingline Loans have been repaid in full or if no Swingline
Loans are outstanding, Revolving Loans made by Non-Defaulting Lenders in an
aggregate amount equal to such excess. If, after giving effect to the repayment
of all outstanding Swingline Loans and Revolving Loans made by Non-Defaulting
Lenders, the aggregate amount of Letter of Credit Outstandings exceeds the
Adjusted Total Revolving Commitment then in effect, the Borrower shall pay to
the Administrative Agent an amount in cash and/or Cash Equivalents equal to such
excess and the Administrative Agent shall hold such payment as security for the
obligations of the Borrower in respect of Letters of Credit pursuant to a cash
collateral agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent (which shall permit certain investments
in Cash Equivalents reasonably satisfactory to the Administrative Agent, until
all proceeds are applied to the secured obligations or until all Letters of
Credit so secured expire undrawn or are otherwise terminated or all drawings
thereunder are paid, at which time such amount shall be returned to the
Borrower).
(ii) If on any date the aggregate outstanding principal amount of
the Revolving Loans made by any Defaulting Lender exceeds the Revolving
Commitment of such Defaulting Lender, the Borrower shall repay principal of
Revolving Loans of such Defaulting Lender in an amount equal to such excess.
(b) On each date set forth below, the Borrower shall repay the
principal amount of Term Loans set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01(a), 4.01(b)
and 4.02(B), a "Scheduled Repayment"):
Date Amount
---- ------
May 31, 2003 $ 5,400,000
November 30, 2003 $ 5,400,000
May 31, 2004 $ 7,200,000
November 30, 2004 $ 7,200,000
May 31, 2005 $ 7,200,000
November 30, 2005 $ 7,200,000
May 31, 2006 $ 7,200,000
November 30, 2006 $ 7,200,000
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Date Amount
---- ------
May 31, 2007 $ 13,500,000
November 30, 2007 $ 13,500,000
May 31, 2008 $ 13,500,000
November 30, 2008 $ 13,500,000
May 31, 2009 $ 126,000,000
Term Loan Maturity Date $ 126,000,000
(c) On the third Business Day following the date of receipt
thereof by Holdings and/or any of its Subsidiaries of the Net Cash Proceeds from
any Asset Sale, an amount equal to 100% of the Net Cash Proceeds from such Asset
Sale shall be applied as a mandatory repayment of principal of the then
outstanding Loans in accordance with the requirements of Section 4.02(B)(a),
PROVIDED that up to an aggregate of $15,000,000 of the Net Cash Proceeds
received by Holdings and its Subsidiaries from Asset Sales during any fiscal
year of Holdings (but no more than $30,000,000 in the aggregate for all such
Asset Sales after the Effective Date) shall not be required to be used to so
repay Loans to the extent the Borrower elects, as hereinafter provided, to cause
such Net Cash Proceeds to be reinvested in Reinvestment Assets (a "Reinvestment
Election"). The Borrower may exercise its Reinvestment Election (within the
parameters specified in the preceding sentence) with respect to an Asset Sale
only if (x) no Default or Event of Default exists and (y) the Borrower delivers
a Reinvestment Notice to the Administrative Agent no later than three Business
Days following the date of the consummation of the respective Asset Sale, with
such Reinvestment Election being effective with respect to the Net Cash Proceeds
of such Asset Sale equal to the Anticipated Reinvestment Amount specified in
such Reinvestment Notice. Notwithstanding anything to the contrary contained in
this Agreement (including without limitation the foregoing provisions of this
Section 4.02(A)(c)), if any Asset Sale, Asset Disposition (as defined in the
Senior Subordinated Note Indenture) or similar event occurs and as a result
thereof (after giving effect to any reinvestments and/or permanent repayments of
Indebtedness actually made in amounts up to, or equal to, the amount of proceeds
received from any such event) any obligation would arise on the part of the
Borrower and/or any of its Subsidiaries to offer to purchase any Senior
Subordinated Notes, then at least two Business Days before any such obligation
arises, the Borrower shall prepay then outstanding Term Loans and, after all
outstanding Term Loans have been repaid in full, prepay outstanding Revolving
Loans and/or Swingline Loans (and permanently reduce the Total Revolving
Commitment in a corresponding amount)) in such amount as is necessary so that no
obligation to make any such offer to purchase arises.
(d) On the date of the receipt thereof by Holdings and/or any of
its Subsidiaries, an amount equal to 100% of the amount of proceeds (net of
underwriting discounts and commissions and other reasonable costs associated
therewith) from the incurrence of Indebtedness by Holdings or any of its
Subsidiaries (other than Indebtedness permitted by Section 8.04), shall be
applied as a mandatory repayment of principal of the then outstanding Term Loans
in accordance with the requirements of Section 4.02(B)(a).
(e) On the date of the receipt thereof by Holdings, an amount
equal to the EP Percentage of the cash proceeds (net of underwriting discounts
and commissions and other reasonable costs associated therewith) of any sale or
issuance of its equity or any equity
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contribution (other than equity issued to officers and employees of Holdings and
its Subsidiaries) shall be applied as a mandatory repayment of principal of the
then outstanding Term Loans in accordance with the requirements of Section
4.02(B)(a).
(f) On each Excess Cash Payment Date, 50% (or, if the Consolidated
Leverage Ratio on such Excess Cash Payment Date (calculated before giving effect
to any repayment required to be made on such date pursuant to this clause (f))
is less than 3.00:1.00 and no Default or Event of Default exists on such Excess
Cash Payment Date, 25%) of Excess Cash Flow for the fiscal year then last ended
shall be applied as a mandatory repayment of principal of the then outstanding
Term Loans in accordance with the requirements of Section 4.02(B)(a).
(g) On the Reinvestment Prepayment Date with respect to a
Reinvestment Election, an amount equal to the Reinvestment Prepayment Amount, if
any, for such Reinvestment Election shall be applied as a repayment of the
principal amount of the then outstanding Term Loans in accordance with the
requirements of Section 4.02(B)(a).
(h) To the extent not theretofore repaid pursuant to the other
provisions of this Agreement, (i) all then outstanding Term Loans shall be
repaid in full on the Term Loan Maturity Date, (ii) all then outstanding
Swingline Loans shall be repaid in full on the Swingline Expiry Date, (iii) all
then outstanding Revolving Loans shall be repaid in full on the RF Maturity Date
and (iv) all outstanding Swingline Loans and Revolving Loans shall be repaid in
full upon the termination of the Total Revolving Commitment.
(B) Application:
(a) Each mandatory repayment required to be made pursuant to
Sections 4.02(A)(c) (to the extent relating to Asset Sales as described in
clause (z) of the definition thereof), (d), (e), (f) and (g) shall be applied to
the outstanding principal of Term Loans (1) first, in direct order of maturity
to those Scheduled Repayments which will be due and payable within 12 months
after the date of the respective repayment and (2) second, to the extent in
excess thereof, to the then remaining Scheduled Repayments on a PRO RATA basis
(based upon the then remaining principal amount of each such Scheduled Repayment
after giving effect to all prior reductions thereto). Each mandatory repayment
pursuant to Section 4.02(A)(c) (to the extent relating to Asset Sales other than
those described in clause (z) of the definition thereof) shall be applied (1)
first, at the Borrower's election (delivered in writing to the Administrative
Agent) to repay outstanding principal of Revolving Loans (with no corresponding
reduction to the Revolving Commitments) (although, (x) no election may be made
pursuant to this clause (1) with respect to any mandatory repayment required to
be made as a result of the receipt of Net Cash Proceeds from any sale of assets
made pursuant to sub-clause (A) of Section 8.02(f), and (y) for all other
repayments made pursuant to this sentence, not more than $25,000,000 in the
aggregate may be applied (or elected to be applied) pursuant to this clause
(1)), and (2) second, to the extent in excess of the amount to be applied
pursuant to preceding clause (1), to repay principal of all then outstanding
Term Loans, which repayment shall be applied (x) first, in direct order of
maturity to those Scheduled Repayments which will be due and payable within 12
months after the date of the respective repayment and (y) second, to the extent
in excess thereof, to the then remaining Scheduled Repayments on a PRO RATA
basis (based upon the then remaining
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principal amount of each such Scheduled Repayment after giving effect to all
prior reductions thereto).
(b) With respect to each prepayment of Loans required by
Section 4.02, the Borrower may designate the Types of Loans which are to be
prepaid and the specific Borrowing(s) under the affected Facility pursuant to
which made PROVIDED that (i) if any prepayment of Eurodollar Loans made pursuant
to a single Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount for such
Borrowing, such Borrowing shall be immediately converted into Base Rate Loans;
(ii) each prepayment of any Loans under a Facility shall be applied PRO RATA
among such Loans; and (iii) except for differing treatments of Defaulting
Lenders and Non-Defaulting Lenders as expressly provided in Section 4.02(A)(a),
each prepayment of any Eurodollar Loans made pursuant to a Borrowing shall be
applied PRO RATA among such Eurodollar Loans. In the absence of a designation by
the Borrower as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its sole discretion with a
view, but no obligation, to minimize breakage costs owing under Section 1.11.
4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable account of the Lenders entitled thereto,
not later than 1:00 P.M. (New York time) on the date when due and shall be made
in immediately available funds and in Dollars at the Payment Office, it being
understood that written notice by the Borrower to the Administrative Agent to
make a payment from the funds in the Borrower's account at the Payment Office
shall constitute the making of such payment to the extent of such funds held in
such account. Any payments under this Agreement which are made later than 1:00
P.M. (New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
4.04 NET PAYMENTS. (a) All payments made by any Credit Party hereunder
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Lender pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Lender is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). Except as provided in Section 4.04(b), if any Taxes
are so levied or imposed, the Borrower agrees to pay the full amount of such
Taxes, and such additional amounts as may be necessary so that every payment of
all amounts due under this Agreement or under any Note, after withholding or
deduction for or on account of any
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Taxes, will not be less than the amount provided for herein or in such Note. If
any amounts are payable in respect of Taxes pursuant to the preceding sentence,
the Borrower agrees to reimburse each Lender, upon the written request of such
Lender, for taxes imposed on or measured by the net income or net profits of
such Lender pursuant to the laws of the jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which such Lender is organized or in which
the principal office or applicable lending office of such Lender is located and
for any withholding of taxes as such Lender shall determine are payable by, or
withheld from, such Lender, in respect of such amounts so paid to or on behalf
of such Lender pursuant to the preceding sentence and in respect of any amounts
paid to or on behalf of such Lender pursuant to this sentence. The Borrower will
furnish to the Administrative Agent within 45 days after the date the payment of
any Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower. The Borrower agrees to indemnify and
hold harmless each Lender, and reimburse such Lender upon its written request,
for the amount of any Taxes so levied or imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Administrative Agent on or
prior to the Effective Date (i) two accurate and complete original signed copies
of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a
complete exemption under an income tax treaty) (or successor forms) certifying
to such Lender's entitlement as of such date to a complete exemption from United
States withholding tax with respect to payments to be made under this Agreement
and under any Note, or (ii) if the Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under
an income tax treaty) pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section 4.04
Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8BEN (with respect to the portfolio exemption)
(or successor form) certifying to such Lender's entitlement as of such date to a
complete exemption from United States withholding tax with respect to payments
of interest to be made under this Agreement and under any Note. In addition,
each Lender agrees that from time to time after the Effective Date, when a lapse
in time or change in circumstances renders the previous certification obsolete
or inaccurate in any material respect, it will deliver to the Borrower or the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits
of any income tax treaty) or Form W-8BEN (with respect to the portfolio interest
exemption) and a Section 4.04 Certificate, as the case may be, and such other
forms as may be required in order to confirm or establish the entitlement of
such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
it shall immediately notify the Borrower and the Administrative Agent of its
inability to deliver any such Form or Certificate, in which case such Lender
shall not be required to deliver any such Form or Certificate pursuant to this
Section 4.04(b). Notwithstanding anything to the contrary contained in Section
4.04(a), but subject to Section 12.04(b) and the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a
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United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Lender has
not provided to the Borrower U.S. Internal Revenue Service Forms that establish
a complete exemption from such deduction or withholding and (y) the Borrower
shall not be obligated pursuant to Section 4.04(a) hereof to gross-up payments
to be made to a Lender in respect of income or similar taxes imposed by the
United States if (I) such Lender has not provided to the Borrower the Internal
Revenue Service Forms required to be provided to the Borrower pursuant to this
Section 4.04(b) or (II) in the case of a payment, other than interest, to a
Lender described in clause (ii) above, to the extent that such forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.04 and except as set forth in Section 12.04(b), the Borrower
agrees to pay any additional amounts and to indemnify each Lender in the manner
set forth in Section 4.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any Taxes deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes that are effective after the Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of such Taxes.
(c) If a Credit Party pays any additional amount under this
Section 4.04 to a Lender and such Lender determines in its sole discretion that
it has actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid (a "Tax Benefit"), such
Lender shall pay to such Credit Party an amount that the Lender shall, in its
sole discretion, determine is equal to the net benefit, after tax, which was
obtained by the Lender in such year as a consequence of such Tax Benefit;
PROVIDED, HOWEVER, that (i) any Lender may determine, in its sole discretion
consistent with the policies of such Lender, whether to seek a Tax Benefit; (ii)
any Taxes that are imposed on a Lender as a result of a disallowance or
reduction (including through the expiration of any tax credit carryover or
carryback of such Lender that otherwise would not have expired) of any Tax
Benefit with respect to which such Lender has made a payment to a Credit Party
pursuant to this Section 4.04(c) shall be treated as a Tax for which the Credit
Party is obligated to indemnify such Lender pursuant to this Section 4.04
without any exclusions or defenses, provided, however, that the amount of such
Tax shall not exceed the amount of the payments received by a Credit Party
pursuant to this section 4.04(c); (iii) nothing in this Section 4.04(c) shall
require the Lender to disclose any confidential information to any Credit Party
(including, without limitation, its tax returns); and (iv) no Lender shall be
required to pay any amounts pursuant to this Section 4.04(c) at any time which a
Default or Event of Default exists.
SECTION 5. CONDITIONS PRECEDENT.
5.01 CONDITIONS PRECEDENT TO THE INITIAL BORROWING DATE. The
obligation of each Lender to make Loans, and the obligation of each Letter of
Credit Issuer to issue Letters of Credit, on the Initial Borrowing Date, is
subject to the satisfaction of each of the following conditions:
(a) EFFECTIVE DATE; NOTES. (i) The Effective Date shall have
occurred and (ii) there shall have been delivered to the Administrative Agent
for the account of each of the
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Lenders that has requested same the appropriate Term Note and/or Revolving Note
executed by the Borrower and, if requested by the Swingline Lender, the
Swingline Note executed by the Borrower, in each case in the amount, maturity
and as otherwise provided herein.
(b) OPINIONS OF COUNSEL. The Administrative Agent shall have
received (i) from Xxxxxx & Xxxxxxx, special counsel to the Credit Parties, an
opinion addressed to the Joint Lead Arrangers, the Administrative Agent, the
Collateral Agent and each of the Lenders and dated the Initial Borrowing Date
covering the matters set forth in Exhibit E, (ii) reliance letters addressed to
the Joint Lead Arrangers, the Administrative Agent, the Collateral Agent and the
Lenders dated the Initial Borrowing Date with respect to all legal opinions to
Holdings or any Subsidiary thereof delivered in connection with the consummation
of the Acquisition, which reliance letters shall be in form and substance
reasonably satisfactory to the Joint Lead Arrangers, and (iii) from such local
counsel as may be reasonably requested by the Joint Lead Arrangers, which
opinions shall cover the perfection of security interests granted pursuant to
the Mortgages and the Security Agreement and shall be in form and substance
reasonably satisfactory to the Joint Lead Arrangers.
(c) CORPORATE DOCUMENTS; PROCEEDINGS; ETC. (i) The Joint Lead
Arrangers shall have received a certificate from each Credit Party, dated the
Initial Borrowing Date, signed by the Chairman of the Board, the Chief Executive
Officer, the President or any Vice President of such Credit Party, and attested
to by the Secretary or any Assistant Secretary of such Credit Party, in the form
of Exhibit F with appropriate insertions and deletions, together with copies of
the certificate or articles of incorporation and by-laws (or equivalent
organizational documents), as applicable, of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and each of
the foregoing shall be in form and substance reasonably satisfactory to the
Joint Lead Arrangers.
(ii) On the Initial Borrowing Date, the Joint Lead Arrangers shall
have received all information and copies of all documents and papers, including
records of corporate proceedings, necessary governmental approvals, good
standing certificates and bring-down telegrams or facsimiles, if any, which the
Joint Lead Arrangers reasonably may have requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate,
limited liability company or governmental authorities.
(d) SENIOR SUBORDINATED NOTES. On or prior to the Initial
Borrowing Date, the Borrower shall have received gross cash proceeds (calculated
before underwriting fees) of at least $225,000,000 from the issuance of the
Senior Subordinated Notes. There shall have been delivered to the Agents true
and correct copies of the Senior Subordinated Note Documents, and all the terms
and conditions of the Senior Subordinated Note Documents (including, without
limitation, amortization, maturities, interest rates, covenants, defaults,
remedies, sinking fund provisions, subordination provisions and other terms)
shall be substantially consistent with the terms of the commitment letter with
respect thereto dated as of September 27, 2002, among CSFB Cayman, DB Cayman and
Holdings or otherwise reasonably satisfactory to the Joint Lead Arrangers.
(e) COMMON EQUITY FINANCING. On or prior to the Initial Borrowing
Date, (i) Holdings shall have received cash proceeds in an aggregate amount
equal to at least
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$350,000,000, and Holdings shall have contributed all such proceeds to the
Borrower as a contribution of cash common equity (the "Common Equity Financing")
and (ii) the cash proceeds from the Common Equity Financing, when aggregated
with the cash proceeds of the issuance or incurrence of the Senior Subordinated
Notes, the Term Loans and up to $21,500,000 of Revolving Loans, shall be
sufficient to consummate the Acquisition, to repay any outstanding Indebtedness
of the Rexnord Business to be repaid by Holdings or any of its Subsidiaries in
connection therewith and to pay all fees and expenses arising in connection with
the Transaction.
(f) CONSUMMATION OF THE ACQUISITION. On the Initial Borrowing
Date, the Acquisition Agreement (together with all exhibits and schedules
thereto), shall be in the form executed on September 27, 2002, with any
additions or changes thereto or waivers of the terms thereof to be in form and
substance reasonably satisfactory to the Joint Lead Arrangers. The Acquisition
Agreement shall be in full force and effect and all of the material conditions
precedent to the consummation of the Acquisition as set forth in the Acquisition
Agreement shall have been satisfied (and not waived, except with consent of the
Joint Lead Arrangers) to the reasonable satisfaction of the Joint Lead
Arrangers. The Acquisition shall have been consummated in accordance in all
material respects with the terms and conditions of the Acquisition Agreement and
all applicable laws.
(g) ADVERSE CHANGE, APPROVALS. (i) Since March 31, 2002, nothing
shall have occurred which has had, or could reasonably be expected to have, a
Material Adverse Effect.
(ii) All material necessary governmental (domestic and foreign) and
material third party approvals and/or consents required in connection with the
Transaction pursuant to the Acquisition Agreement, the other transactions
contemplated hereby and the granting of Liens under the Credit Documents shall
have been obtained and remain in effect, and all applicable waiting periods with
respect thereto shall have expired without any action being taken by any
competent authority which in the judgment of the Joint Lead Arrangers restrains,
prevents or imposes materially adverse conditions upon the consummation of the
Transaction or the other transactions contemplated by the Documents. There shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending prohibiting or
imposing materially adverse conditions upon the Transaction or the other
transactions contemplated by the Documents.
(h) LITIGATION. There shall be no actions, suits or proceedings
pending with respect to the Transaction, this Agreement or any other Document.
(i) PLEDGE AGREEMENT. Each Credit Party shall have duly
authorized, executed and delivered the Pledge Agreement in the form of Exhibit G
(as amended, modified or supplemented from time to time, the "Pledge Agreement")
and shall have delivered to the Collateral Agent, as Pledgee thereunder, all of
the Pledge Agreement Collateral, if any, referred to therein, required to be
delivered thereby and then owned by such Credit Party, (x) endorsed in blank in
the case of promissory notes constituting Pledge Agreement Collateral and (y)
together with executed and undated endorsements for transfer in the case of
Equity Interests constituting certificated Pledge Agreement Collateral, along
with evidence that all other actions necessary or, in the reasonable opinion of
the Collateral Agent, desirable, to perfect the security interests
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purported to be created by the Pledge Agreement have been taken, or arrangements
therefor reasonably satisfactory to the Collateral Agent have been made, and the
Pledge Agreement shall be in full force and effect.
(j) SECURITY AGREEMENT. Each Credit Party shall have duly
authorized, executed and delivered the Security Agreement in the form of Exhibit
H (as amended, modified or supplemented from time to time, the "Security
Agreement") covering all of such Credit Party's Security Agreement Collateral,
together with:
(i) proper financing statements (Form UCC-1 or the equivalent)
authorized for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable, to perfect the security interests purported to
be created by the Security Agreement;
(ii) certified copies of requests for information or copies (Form
UCC-11), or equivalent reports as of a recent date, listing all effective
financing statements that name Holdings, the Borrower or any Subsidiary
Guarantor as debtor and that are filed in the jurisdictions referred to in
clause (i) above and in such other jurisdictions in which material
Collateral is located on the Effective Date, together with copies of such
financing statements that name Holdings, the Borrower or any Subsidiary
Guarantor as debtor (none of which shall cover any of the Collateral except
(x) to the extent evidencing Permitted Liens or (y) those in respect of
which the Collateral Agent shall have received termination statements (Form
UCC-3) or such other termination statements as shall be required by local
law authorized for filing) or arrangements therefor reasonably satisfactory
to the Collateral Agent have been made;
(iii) evidence of the completion of or arrangements therefor
reasonably satisfactory to the Collateral Agent for all other recordings
and filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent, desirable,
to perfect the security interests intended to be created by the Security
Agreement; and
(iv) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the Security
Agreement have been taken, and the Security Agreement shall be in full
force and effect.
(k) MORTGAGE; TITLE INSURANCE; SURVEY; LANDLORD WAIVERS; ETC. On
the Initial Borrowing Date, the Collateral Agent shall have received:
(i) fully executed counterparts of the Mortgages, in each case in
form and substance reasonably satisfactory to the Administrative Agent,
which Mortgages shall cover the Real Property owned and/or leased by the
Borrower and designated as the "Mortgaged Property" on Schedule III,
together with evidence that counterparts of such Mortgages have been
delivered to the title insurance company insuring the Lien of each such
Mortgage for recording in all places to the extent necessary or, in the
reasonable opinion of the Collateral Agent desirable, to effectively create
a valid and enforceable
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first priority mortgage lien, subject only to Liens permitted under
Sections 8.03(a), (b), (g), (h), (j) and (l), on the Mortgaged Property
described therein in favor of the Collateral Agent (or such other trustee
as may be required or desired under local law) for the benefit of the
Secured Creditors;
(ii) a Mortgage Policy relating to each Mortgage on each Mortgaged
Property referred to above issued by a title insurer reasonably
satisfactory to the Collateral Agent and in amounts reasonably satisfactory
to the Collateral Agent and assuring the Collateral Agent that the
respective Mortgage on each such Mortgaged Property is a valid and
enforceable first priority mortgage lien on the respective such Mortgaged
Property, free and clear of all defects and encumbrances except Liens
permitted under Sections 8.03(a), (b), (g), (h), (j) and (l), and each such
Mortgage Policy shall otherwise be in form and substance reasonably
satisfactory to the Collateral Agent and shall include, if available in any
particular State and as appropriate, an endorsement for future advances
under this Agreement and the Notes and for any other matter that the
Collateral Agent in its discretion may reasonably request, shall not
include a survey exception or an exception for mechanics' liens, and shall
provide for affirmative insurance and such reinsurance as the Collateral
Agent in its discretion may reasonably request;
(iii) fully executed landlord waivers in respect of those Leaseholds
of the Borrower designated as "Leaseholds Subject to Landlord Waivers" on
Schedule III, each of which landlord waivers shall be in form and substance
reasonably satisfactory to the Collateral Agent (it being understood, that
the Borrower shall only be required to use its commercially reasonable
efforts for the purposes of the satisfaction of the condition contained in
this clause (iii)); and
(iv) flood certificates covering each Mortgaged Property certifying
whether or not each such Mortgaged Property lies in an area of flood hazard
(with reference to the applicable FEMA (Federal Emergency Management
Agency) map) in form and substance reasonably satisfactory to the
Collateral Agent.
(l) FINANCIAL STATEMENTS; PRO FORMA BALANCE SHEET; PROJECTIONS.
The Joint Lead Arrangers shall have received true and correct copies of the
historical financial statements, the pro forma financial statements and the
Projections referred to in Sections 6.10(b) and (d).
(m) SOLVENCY; INSURANCE CERTIFICATES. The Administrative Agent
shall have received:
(i) a solvency certificate, dated the Initial Borrowing Date, from
the Chief Financial Officer of Holdings, in the form of Exhibit I; and
(ii) certificates of insurance complying with the requirements of
Section 7.03 for the business and properties of the Credit Parties, in form
and substance reasonably satisfactory to the Administrative Agent and
naming the Collateral Agent as an additional insured and/or as loss payee,
and stating that such insurance shall not be canceled without at least 30
days' prior written notice by the insurer to the Collateral Agent.
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(n) SUBSIDIARIES GUARANTY. Each Domestic Subsidiary existing on
the Initial Borrowing Date shall have duly authorized, executed and delivered a
Subsidiaries Guaranty in the form of Exhibit J hereto (as modified, amended or
supplemented from time to time in accordance with the terms hereof and thereof,
the "Subsidiaries Guaranty"), and the Subsidiaries Guaranty shall be in full
force and effect.
(o) EXISTING INDEBTEDNESS. On the Initial Borrowing Date and after
giving effect to the Transaction and the Loans then incurred, neither Holdings
nor any of its Subsidiaries shall have any preferred stock or Indebtedness
outstanding except for (i) the Loans and any Letter of Credit issued on the
Initial Borrowing Date, (ii) the Senior Subordinated Notes, (iii) intercompany
loans among Qualified Credit Parties and other intercompany loans made pursuant
to Section 8.06(p) (but in any event excluding intercompany loans made by any
Foreign Subsidiary to Holdings or any Domestic Subsidiary), (iv) the
Indebtedness set forth on Schedule IV hereto and (v) certain other Indebtedness
in an aggregate principal amount not to exceed $1,000,000 (the Indebtedness set
forth on such Schedule IV, together with the Indebtedness described in this
clause (v), the "Existing Indebtedness"), with all of the Existing Indebtedness
set forth on Schedule IV to be reasonably satisfactory to the Joint Lead
Arrangers as to amount and material terms and conditions.
(p) FEES, ETC. The Borrower shall have paid to the Joint Lead
Arrangers and the Administrative Agent all reasonable, documented, out-of-pocket
costs, fees and expenses (including, without limitation, legal fees and
expenses) and other compensation contemplated hereby payable to the Joint Lead
Arrangers and the Administrative Agent to the extent then due.
All of the Notes, certificates, legal opinions and other documents and
papers referred to in this Section 5.01, unless otherwise specified, shall be
delivered to the Administrative Agent for the account of each of the Lenders
and, except for the Notes, in sufficient counterparts or copies for each of the
Lenders.
5.02 CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The obligation of each
Lender to make Loans (including Loans made on the Initial Borrowing Date but
excluding any Mandatory Borrowings), and the obligation of each Letter of Credit
Issuer to issue Letters of Credit (including Letters of Credit issued on the
Initial Borrowing Date), is subject, at the time of each such Credit Event, to
the satisfaction of the following conditions:
(a) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
(b) NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. (i) Prior to
the making of each Loan (other than a Swingline Loan or a Revolving Loan made
pursuant to a Mandatory Borrowing), the Administrative Agent shall have received
a Notice of Borrowing meeting the
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requirements of Section 1.03(a). Prior to the making of each Swingline Loan, the
Swingline Lender shall have received the notice referred to in Section
1.03(b)(i).
(ii) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Letter of Credit Issuer shall have
received a Letter of Credit Request meeting the requirements of Section 2.03(a).
The acceptance of the benefits of each Credit Event (other than a
Mandatory Borrowing) shall constitute a representation and warranty by Holdings
and the Borrower to the Administrative Agent and each of the Lenders that all
the conditions specified in Section 5.01 (with respect to Credit Events on the
Initial Borrowing Date) and in this Section 5.02 (with respect to Credit Events
on and after the Initial Borrowing Date) and applicable to such Credit Event are
satisfied as of that time.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to
induce the Lenders to enter into this Agreement and to make the Loans and issue
and/or participate in Letters of Credit provided for herein, each of Holdings
and the Borrower makes the following representations and warranties to, and
agreements with, the Lenders, all of which shall survive the execution and
delivery of this Agreement and the making of the Loans:
6.01 CORPORATE STATUS. Each of Holdings and its Subsidiaries (i) is a
duly organized and validly existing Company, is in good standing (for each
Company of a type, and organized in a jurisdiction, where the concept of "good
standing" exists) under the laws of the jurisdiction of its organization and has
the Company power and authority to own its property and assets and to transact
the business in which it is engaged and (ii) is duly qualified and is authorized
to do business and, to the extent relevant, is in good standing in all
jurisdictions where it is required to be so qualified and where the failure to
be so qualified, authorized or in good standing is reasonably likely to have a
Material Adverse Effect.
6.02 CORPORATE POWER AND AUTHORITY. Each Credit Party has the Company
power and authority to execute, deliver and carry out the terms and provisions
of the Credit Documents to which it is a party and has taken all necessary
Company action to authorize the execution, delivery and performance of the
Credit Documents to which it is a party. Each Credit Party has duly executed and
delivered each Credit Document to which it is a party and each such Credit
Document constitutes the legal, valid and binding obligation of such Person
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws generally affecting creditors'
rights and by general equitable principles (regardless of whether enforcement is
sought in equity or at law).
6.03 NO VIOLATION. Neither the execution, delivery or performance by
any Credit Party of the Credit Documents to which it is a party nor compliance
with the terms and provisions thereof, (i) will contravene any applicable
provision of any law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality, (ii) will conflict or be
inconsistent with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or (other than
pursuant to the Security Documents) result in the creation or imposition of (or
the obligation to create or impose) any
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Lien upon any of the property or assets of Holdings or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust or other
material agreement or instrument to which Holdings or any of its Subsidiaries is
a party or by which it or any of its property or assets are bound or to which it
may be subject or (iii) will violate any provision of the organizational
documents (including by-laws) of Holdings or any of its Subsidiaries.
6.04 LITIGATION. There are no actions, suits or proceedings pending
or, to the best of its knowledge, threatened with respect to Holdings or any of
its Subsidiaries (i) that have, or that could reasonably be expected to have, a
Material Adverse Effect or (ii) that have, or that could reasonably be expected
to have, a material adverse effect on (a) the rights or remedies of the Lenders
or on the ability of the Credit Parties taken as a whole to perform their
obligations under the other Credit Documents or (b) the consummation of the
Transaction.
6.05 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all Term
Loans incurred on the Initial Borrowing Date shall be utilized (i) to finance
the Acquisition and (ii) to pay certain fees and expenses relating to the
Transaction. Without limiting the generality of the foregoing, $39,752,614.00 of
the proceeds of the Term Loans shall be used by the Borrower, directly or
indirectly, solely to finance the acquisition of MCC Holding BV and to pay fees
and expenses related to the acquisition of MCC Holding BV.
(b) The proceeds of all Revolving Loans and all Swingline Loans
may be used on and after the Initial Borrowing Date for general corporate and
working capital purposes, including, without limitation, for making Investments
and consummating Permitted Acquisitions permitted hereunder, PROVIDED that (x)
up to, but no more than, $21,500,000 (less any amounts utilized as provided in
clause (y) below) of Revolving Loans may be utilized to pay amounts owing in
respect of non-cash related post-closing purchase price adjustments pursuant to
the Acquisition Agreement and (y) up to, but no more than, $5,000,000 of the
Revolving Loans may be utilized on the Initial Borrowing Date to pay any fees
and expenses incurred in connection with the Transaction.
(c) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System and no part of the proceeds of
any Loan will be used to purchase or carry any Margin Stock or to extend credit
for the purpose of purchasing or carrying any Margin Stock.
6.06 GOVERNMENTAL APPROVALS. Except for filings and recordings in
connection with the Security Documents, no order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document except, in any such case, as expressly provided herein or in the
Security Documents.
6.07 INVESTMENT COMPANY ACT. No Credit Party is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
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6.08 PUBLIC UTILITY HOLDING COMPANY ACT. No Credit Party is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
6.09 TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Credit
Parties in writing to the Joint Lead Arrangers, the Administrative Agent or any
Lender for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of any Credit Party in writing to the
Lenders hereunder will be, true and accurate in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time in any material respect in light of the
circumstances under which such information was provided. The projections and PRO
FORMA financial information contained in such materials are based on good faith
estimates and assumptions believed by Holdings and the Borrower to be reasonable
at the time made, it being recognized by the Lenders that such projections as to
future events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the projected
results. There is no fact known to any Credit Party (other than matters relating
to general economic conditions) which would have a Material Adverse Effect,
which has not been disclosed herein or in such other documents, certificates and
statements furnished to the Lenders for use in connection with the transactions
contemplated hereby.
6.10 FINANCIAL CONDITION; FINANCIAL STATEMENTS. (a) On and as of the
Initial Borrowing Date, on a PRO FORMA basis after giving effect to the
Transaction and all Indebtedness incurred, and to be incurred (including,
without limitation, the Loans and the Senior Subordinated Notes), and Liens
created, and to be created, by each Credit Party in connection therewith, (x)
the fair valuation of all of the tangible and intangible assets of the Credit
Parties (on a consolidated basis) will exceed their debts, (y) the Credit
Parties will not have incurred or intended to incur debts beyond their ability
to pay such debts as such debts mature and (z) the Credit Parties will not have
unreasonably small capital with which to conduct their business. For purposes of
this Section 6.10, "debt" means any liability on a claim, and "claim" means any
(i) right to payment whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured; or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(b) The consolidated balance sheets of the Rexnord Business at
March 31, 2002 and September 30, 2002 and the related consolidated statements of
operations and cash flows of the Rexnord Business for the fiscal year or the six
month period, as the case may be, ended as of said dates, which, in the case of
the annual financial statements, have been audited by Ernst & Young LLP
independent certified public accountants, who delivered an unqualified opinion
in respect therewith, copies of all of which have heretofore been furnished to
the Joint Lead Arrangers, present fairly the consolidated financial position of
the Rexnord Business (and reasonably reflect in all material respects the
combined financial condition and results of
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operations of the Rexnord Business) at the dates of said statements and the
results for the periods covered thereby in accordance with GAAP, except to the
extent provided in the notes to said financial statements. All such financial
statements have been prepared in accordance with GAAP and practices consistently
applied except to the extent provided in the notes to said financial statements.
The PRO FORMA consolidated balance sheet and the related consolidated statements
of operations and cash flows of Holdings and its Subsidiaries as of, and for the
four fiscal quarter period ending on, September 30, 2002, copies of which have
heretofore been furnished to each Lender, present a good faith estimate of the
consolidated PRO FORMA financial position of Holdings and its Subsidiaries
(after giving effect to the Transaction) as at the date thereof and the results
for the period covered thereby. Nothing has occurred since March 31, 2002 that
has had, or is reasonably likely to have, a Material Adverse Effect, it being
understood that for periods prior to the Initial Borrowing Date the Rexnord
Business shall be included for the purposes of making determinations pursuant to
this sentence as if the Rexnord Business had been owned by Holdings at all times
during such periods.
(c) Except as reflected in the financial statements described in
Section 6.10(b) or in the footnotes thereto, there were as of the Initial
Borrowing Date no liabilities or obligations with respect to Holdings or any of
its Subsidiaries of a nature (whether absolute, accrued, contingent or otherwise
and whether or not due) which, either individually or in aggregate, would be
material to Holdings and its Subsidiaries taken as a whole, except as incurred
in the ordinary course of business consistent with past practices.
(d) The Projections delivered to the Administrative Agent and the
Lenders prior to the Initial Borrowing Date have been prepared in good faith and
are based on assumptions believed by the Borrower to be reasonable at the time
such Projections were prepared (it being understood that the Projections are
subject to significant uncertainties and contingencies, many of which are beyond
the control of Holdings and its Subsidiaries, and that no assurance can be given
that the Projections will be realized).
6.11 SECURITY INTERESTS. (a) The provisions of the Security Agreement
are effective to create in favor of the Collateral Agent for the benefit of the
Secured Creditors a legal, valid and enforceable security interest in all right,
title and interest of the Credit Parties in the Security Agreement Collateral
described therein, and the Collateral Agent, for the benefit of the Secured
Creditors, has (or within 10 days following the Initial Borrowing Date will
have) a fully perfected security interest in all right, title and interest in
all of the Security Agreement Collateral described therein to the extent
contemplated therein, subject to no other Liens other than Permitted Liens. The
recordation of (x) the Grant of Security Interest in U.S. Patents, if
applicable, and (y) the Grant of Security Interest in U.S. Trademarks, if
applicable, in the respective form attached to the Security Agreement, in each
case in the United States Patent and Trademark Office, together with filings on
Form UCC-1 made pursuant to the Security Agreement, will create, to the extent
the security interest granted pursuant thereto may be perfected by such filings
and recordation, a perfected security interest in the United States trademarks
and patents covered by the Security Agreement, and the recordation of the Grant
of Security Interest in U.S. Copyrights, if applicable, in the form attached to
the Security Agreement with the United States Copyright Office, together with
filings on Form UCC-1 made pursuant to the Security Agreement, will create, to
the extent the security interest granted
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pursuant thereto may be perfected by such filings and recordation, a perfected
security interest in the United States copyrights covered by the Security
Agreement.
(b) The provisions of the Pledge Agreement are effective to create
in favor of the Collateral Agent, for the benefit of the Secured Creditors, a
legal, valid and enforceable security interest in all right, title and interest
of the Credit Parties in the Pledge Agreement Collateral (as described therein),
and the Collateral Agent, for the benefit of the Secured Creditors, has (or
within 10 days following the Initial Borrowing Date will have) a fully perfected
security interest in all right, title and interest in all of the Pledge
Agreement Collateral described therein to the extent contemplated therein,
subject to no other Liens other than Permitted Liens.
(c) Each Mortgage is effective to create, as security for the
obligations purported to be secured thereby, a valid and enforceable perfected
security interest in and mortgage lien on the respective Mortgaged Property in
favor of the Collateral Agent (or such other trustee as may be party thereto)
for the benefit of the Secured Creditors, superior and prior to the rights of
all third Persons (except that the security interest and mortgage lien created
on such Mortgaged Property may be subject to the Permitted Encumbrances related
thereto) and subject to no other Liens (other than Permitted Liens related
thereto).
6.12 CONSUMMATION OF CERTAIN TRANSACTIONS. As of the Initial Borrowing
Date, the Transaction shall have been consummated in accordance with the
material terms and conditions of the respective Transaction Documents and all
applicable laws. All applicable waiting periods with respect thereto have or,
prior to the time when required, will have, expired without, in all such cases,
any action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the consummation of the Transaction.
6.13 TAX RETURNS AND PAYMENTS. Each of Holdings and its Subsidiaries
has timely filed with the appropriate taxing authority, all material returns,
statements, forms and reports for taxes (the "Returns") required to be filed by
or with respect to the income, properties or operations of Holdings and/or any
of its Subsidiaries, except, in the case of any such filing required to be filed
by a Foreign Subsidiary, to the extent failure to do so is not reasonably likely
to have a Material Adverse Effect. Holdings and each of its Subsidiaries have
paid all material taxes payable by them when due except (i) those contested in
good faith and adequately disclosed and for which adequate reserves have been
established in accordance with generally accepted accounting principles and (ii)
in the case of any such taxes payable by a Foreign Subsidiary, to the extent the
failure to pay such taxes is not reasonably likely to have a Material Adverse
Effect.
6.14 COMPLIANCE WITH ERISA. (a) Part A of Schedule V sets forth each
Plan other than ERISA Affiliate Plans as of the Initial Borrowing Date, after
giving effect to the Transaction. Except to the extent that a breach of any of
the following representations with respect to an ERISA Affiliate Plan would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect (provided, however, (i) any of the following representations with
respect to an ERISA Affiliate Plan shall be deemed not qualified by any
reference therein to materiality and (ii) this exception shall not apply to any
of the following representations that expressly refer to a Material Adverse
Effect): each Plan (and each related
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trust, insurance contract or fund) is in substantial compliance with its terms
and with all applicable laws, including without limitation ERISA and the Code;
each Plan (and each related trust, if any) which is intended to be qualified
under Section 401(a) of the Code is so qualified; no Reportable Event has
occurred with respect to a Plan, except as disclosed in Part B of Schedule V; to
the knowledge of Borrower no Plan which is a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an
Unfunded Current Liability which, when added to the aggregate amount of Unfunded
Current Liabilities with respect to all other Plans is reasonably likely to
result in a Material Adverse Effect; no Plan which is subject to Section 412 of
the Code or Section 302 of ERISA has an accumulated funding deficiency, within
the meaning of such sections of the Code or ERISA, or has applied for or
received a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; all contributions required to be made with respect to a
Plan have been timely made in all material respects; neither Holdings, the
Borrower nor any Subsidiary of Holdings has incurred any material liability
(including any indirect, contingent or secondary liability) to or on account of
a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or
to the knowledge of Holdings, the Borrower or such Subsidiary reasonably expects
to incur any such material liability under any of the foregoing sections with
respect to any Plan; to the knowledge of Holdings, the Borrower or such
Subsidiary no condition exists which presents a material risk to Holdings, the
Borrower or any Subsidiary of Holdings of incurring a material liability to or
on account of a Plan pursuant to the foregoing provisions of ERISA and the Code;
no proceedings have been instituted to terminate (in a distress termination
pursuant to ERISA Section 4042) or appoint a trustee to administer any Plan
which is subject to Title IV of ERISA; no action, suit, proceeding, hearing,
audit or investigation with respect to the administration, operation or the
investment of assets of any Plan (other than routine claims for benefits) is
pending, expected or to the knowledge of the Credit Parties threatened, other
than any of the foregoing which would not, individually or in the aggregate,
reasonably be expected to result in a material liability of Holdings, the
Borrower or any Subsidiary of Holdings; using actuarial assumptions and
computation methods consistent with Part 1 of subtitle E of Title IV of ERISA,
the aggregate liabilities of Holdings, its Subsidiaries and its ERISA Affiliates
to all Plans which are multiemployer plans (as defined in Section 4001(a)(3) of
ERISA) in the event of a complete withdrawal therefrom, as of the close of the
most recent fiscal year of each such Plan ended prior to the date of the most
recent Credit Event (other than a Mandatory Borrowing) is not reasonably likely
to result in a Material Adverse Effect; and each group health plan (as defined
in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or
has covered employees or former employees of Holdings or any Subsidiary of
Holdings has at all times been operated in compliance with the provisions of
Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code, other
than any failure to so comply which would not, individually or in the aggregate,
reasonably be expected to result in a material liability of Holdings, the
Borrower or any Subsidiary of Holdings; no lien imposed under the Code or ERISA
on the assets of Holdings or any Subsidiary of Holdings exists or is likely to
arise on account of any Plan.
(b) Except as could not reasonably be expected to have a Material
Adverse Effect, each Foreign Pension Plan has been maintained in compliance with
its terms and with the requirements of any and all applicable laws, statutes,
rules, regulations and orders and has been maintained, where required, in good
standing with applicable regulatory authorities; all
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contributions required to be made with respect to a Foreign Pension Plan have
been timely made; and neither Holdings, the Borrower nor any of its Subsidiaries
has incurred any obligation in connection with the termination of or withdrawal
from any Foreign Pension Plan; and the present value of the accrued benefit
liabilities (whether or not vested) under each Foreign Pension Plan, determined
as of the end of the Borrower's most recently ended fiscal year on the basis of
actuarial assumptions, each of which is reasonable, did not exceed the current
value of the assets of such Foreign Pension Plan allocable to such benefit
liabilities.
6.15 SUBSIDIARIES. On and as of the Initial Borrowing Date and after
giving effect to the consummation of the Transaction, (i) Holdings has no direct
Subsidiaries other than the Borrower and (ii) the Borrower has no Subsidiaries
other than those Subsidiaries listed on Schedule VI. Schedule VI correctly sets
forth, as of the Initial Borrowing Date and after giving effect to the
Transaction, the percentage ownership (direct and indirect) of the Borrower in
each class of capital stock of each of its Subsidiaries and also identifies the
direct owner thereof.
6.16 INTELLECTUAL PROPERTY. Each of Holdings and its Subsidiaries owns
or has the right to use all the domestic and foreign patents, trademarks,
service marks, trade names, domain names, technology, copyrights, licenses,
permits, franchises, inventions, formulas, trade secrets, proprietary
information and know-how of any type, whether or not written (including, but not
limited to, computer programs, databases and data collections) or has rights
with respect to the foregoing, and has obtained assignments of all leases and
licenses and other rights of whatever nature, that are used in the operation of
each such Credit Party's respective business as presently conducted, where the
failure to own or hold such rights is reasonably likely to have a Material
Adverse Effect.
6.17 ENVIRONMENTAL MATTERS. (a) Each of Holdings its Subsidiaries is
in compliance with all applicable Environmental Laws governing its business, and
neither Holdings nor any of its Subsidiaries is liable for any material
penalties, fines or forfeitures for failure to comply with any of the foregoing
in the manner set forth above, except where any such failure to comply or any
liability for any such penalties, fines or forfeitures is not reasonably likely
to result in a Material Adverse Effect. All licenses, permits, registrations or
approvals required for the business of Holdings and each of its Subsidiaries, as
conducted as of the Initial Borrowing Date, under any Environmental Law have
been secured and each of Holdings and its Subsidiaries is in substantial
compliance therewith, except such licenses, permits, registrations or approvals
the failure to secure or to comply therewith is not reasonably likely to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries is in any
respect in noncompliance with, breach of or default under any applicable writ,
order, judgment, injunction, or decree to which Holdings or such Subsidiary is a
party or which could affect the ability of Holdings or such Subsidiary to
operate any Real Property and no event has occurred and is continuing which,
with the passage of time or the giving of notice or both, would reasonably be
expected to constitute noncompliance, breach of or default thereunder, except in
each such case, such noncompliance, breaches or defaults as are not reasonably
likely to, in the aggregate, have a Material Adverse Effect. There are as of the
Initial Borrowing Date no Environmental Claims pending or, to the best knowledge
of Holdings and the Borrower threatened, where any decision, ruling or finding
with respect thereto is reasonably likely to have a Material Adverse Effect.
There are no facts, circumstances, conditions or occurrences concerning the
business or operations of Holdings or any of its Subsidiaries, or any Real
Property at any time owned or operated by Holdings or any
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of its Subsidiaries or, to the knowledge of Holdings or the Borrower, on any
property adjacent to any such Real Property that could reasonably be expected
(i) to form the basis of an Environmental Claim against Holdings, any of its
Subsidiaries or any of their respective Real Property or (ii) to cause any such
currently owned or operated Real Property to be subject to any restrictions on
the ownership, occupancy, use or transferability of such Real Property under any
Environmental Law, except in each such case, such Environmental Claims or
restrictions that individually, or in the aggregate, are not reasonably likely
to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated,
used, treated or stored on, or transported to or from, any Real Property owned
or operated by Holdings or any of its Subsidiaries or (ii) released on or from
any such Real Property, in each case where such occurrence or event individually
or in the aggregate is reasonably likely to have a Material Adverse Effect.
6.18 PROPERTIES. Holdings and each of its Subsidiaries have good and
insurable title to, or a validly existing leasehold interest in, all material
properties owned and used by them, including, as of the Initial Borrowing Date,
all Real Property reflected in the consolidated balance sheets of the Rexnord
Business at March 31, 2002 referred to in Section 6.10(b), free and clear of all
Liens, other than (i) as referred to in the consolidated balance sheet or in the
notes thereto, (ii) otherwise permitted by Section 8.03 or (iii) in the case of
any such property owned or used by a Foreign Subsidiary, as is not reasonably
likely to have a Material Adverse Effect. Schedule III contains a true and
complete list of each domestic Real Property owned or leased by the Borrower or
any of its Domestic Subsidiaries (other than any such leased Real Property where
the annual base rental obligation with respect thereto is less than $250,000) as
of the Initial Borrowing Date and after giving effect to the Transaction, and
the type of interest therein held by Holdings or the respective Subsidiary.
6.19 LABOR RELATIONS. No Credit Party is engaged in any unfair labor
practice that could reasonably be expected to have a Material Adverse Effect.
There is (i) no unfair labor practice complaint pending against any Credit Party
or, to the best of its knowledge, threatened against any of them, before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against any Credit Party or, to the best of its knowledge, threatened against
any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against
any Credit Party or, to the best of its knowledge, threatened against any Credit
Party and (iii) no union representation question existing with respect to the
employees of any Credit Party and no union organizing activities are taking
place, except with respect to any matter specified in clause (i), (ii) or (iii)
above, either individually or in the aggregate, such as could not reasonably be
expected to have a Material Adverse Effect.
6.20 COMPLIANCE WITH STATUTES, ETC. Each of Holdings and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property, except such non-compliance as is not reasonably likely to,
individually or in the aggregate, have a Material Adverse Effect.
6.21 SUBORDINATION. The subordination provisions contained in the
Senior Subordinated Note Indenture are enforceable by the Lenders against the
Borrower and the
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holders of the Senior Subordinated Notes, and all Obligations of the Borrower
are or will be within the definitions of "Senior Indebtedness" and "Designated
Senior Indebtedness," as the case may be, included in such provisions of the
Senior Subordinated Note Indenture.
6.22 CAPITALIZATION. (a) On the Initial Borrowing Date, the authorized
capital stock of Holdings consists of 5,000,000 shares of common stock, $.01 par
value, of which 3,595,000 shares are issued and outstanding and owned by the
Initial Investors. All outstanding shares of capital stock of Holdings have been
duly and validly issued and are fully paid and non-assessable.
(b) On the Initial Borrowing Date, the authorized capital stock of
the Borrower consists of 1,000 shares of common stock, $.01 par value, of which
1,000 shares are issued and outstanding and owned by Holdings. All outstanding
shares of the capital stock of the Borrower have been duly and validly issued
and are fully paid and non-assessable. The Borrower does not have outstanding
any securities convertible into or exchangeable for its capital stock or
outstanding any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
6.23 LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED
ORGANIZATION); JURISDICTION OF ORGANIZATION; ETC. Schedule VII attached hereto
contains for each Credit Party, as of the Initial Borrowing Date, (i) the exact
legal name of such Credit Party, (ii) the type of organization of such Credit
Party, (iii) whether or not such Credit Party is a registered organization, (iv)
the jurisdiction of organization of such Credit Party, (v) such Credit Party's
Location and (vi) the organizational identification number (if any) of such
Credit Party. To the extent that such Credit Party does not have an
organizational identification number on the date hereof and later obtains one,
such Credit Party shall promptly thereafter notify the Collateral Agent of such
organizational identification number and shall take all actions reasonably
satisfactory to the Collateral Agent to the extent necessary to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted pursuant to the Security Documents fully perfected and in full force and
effect.
SECTION 7. AFFIRMATIVE COVENANTS. Holdings and the Borrower hereby
covenant and agree that for so long as this Agreement is in effect and until the
Commitments have terminated, no Letters of Credit or Notes are outstanding and
the Loans and Unpaid Drawings, together with interest, Fees and all other
Obligations (other than any indemnities hereunder and under the other Credit
Documents which are not then owing) incurred hereunder, are paid in full:
7.01 INFORMATION COVENANTS. Holdings will furnish to the
Administrative Agent for distribution to each Lender:
(a) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the close of
each fiscal year of Holdings, the audited consolidated balance sheet of Holdings
and its Subsidiaries, as at the end of such fiscal year and the related
consolidated statements of operations and of cash flows for such fiscal year, in
each case setting forth comparative consolidated figures for the preceding
fiscal year, and examined by independent certified public accountants of
recognized national standing whose opinion shall not be qualified as to the
scope of audit or as to the status
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of Holdings or any of its Subsidiaries as a going concern. Notwithstanding the
foregoing, in the event that Holdings delivers to the Administrative Agent an
Annual Report for Holdings on Form 10-K for such fiscal year, as filed with the
SEC, within 90 days after the end of such fiscal year, such Form 10-K shall
satisfy all requirements of this clause (a) so long as the certified public
accountants' opinion included in such Form 10-K satisfies the requirements with
respect thereto set forth in the immediately preceding sentence.
(b) QUARTERLY FINANCIAL STATEMENTS. Commencing with the fiscal
quarter ending on December 31, 2002, within 60 days after the close of each of
the first three quarterly accounting periods in each fiscal year of Holdings,
the unaudited consolidated balance sheet of Holdings and its Subsidiaries, as at
the end of such quarterly accounting period and the related unaudited
consolidated statements of operations and of cash flows for such quarterly
accounting period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly accounting period, and in each case, commencing with
the quarter ending December 31, 2003, setting forth comparative consolidated
figures for the related periods in the prior fiscal year, all of which shall be
in reasonable detail and certified by the chief financial officer or controller
of Holdings, subject to changes resulting from audit and normal year-end audit
adjustments. Notwithstanding the foregoing, in the event that Holdings delivers
to the Administrative Agent a Quarterly Report for Holdings on Form 10-Q for
such fiscal quarter, as filed with the SEC, within 45 days after the end of such
fiscal quarter, such Form 10-Q shall satisfy all requirements of this clause
(b).
(c) MONTHLY REPORTS. Commencing with the fiscal month ending
December 31, 2002, within 30 days after the end of each monthly accounting
period of each fiscal year of Holdings (other than the last monthly accounting
period in such fiscal year) the unaudited consolidated balance sheet of Holdings
and its Subsidiaries, as at the end of such period, and the related unaudited
consolidated statements of operations and cash flows for such period, and, in
each case, commencing with the month ending December 31, 2003, setting forth
comparative figures for the corresponding period of the previous year, all of
which shall be certified by the chief financial officer or controller of
Holdings subject to changes resulting from audit and normal year-end audit
adjustments.
(d) BUDGETS; ETC. Not more than 30 days after the commencement of
each fiscal year of Holdings, a consolidated budget of Holdings and its
Subsidiaries (including budgeted statements of income, sources and uses of cash
and balance sheets for Holdings and its Subsidiaries on a consolidated basis)
for each of the twelve months of such fiscal year prepared in reasonable detail
as customarily prepared by management for its internal use and setting forth,
with appropriate discussion, the principal assumptions upon which such budgets
are based. Together with each delivery of consolidated financial statements
pursuant to Sections 7.01(a) and (b), a comparison of the current year-to-date
financial results against the budgets required to be submitted pursuant to this
clause (d) shall be presented.
(e) OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements provided for in Sections 7.01(a) and (b), a certificate of
the chief financial officer or controller of Holdings to the effect that no
Default or Event of Default exists or, if any Default or Event of Default does
exist, specifying the nature and extent thereof, which certificate (x) shall set
forth the calculations required to establish (I) the Consolidated Leverage Ratio
on the last day
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of the fiscal period covered by such financial statements and (II) whether
Holdings and its Subsidiaries were in compliance with the provisions of Sections
8.11 and 8.12 as at the end of such fiscal period and (y) in the case of the
certificate delivered at the time of the delivery of the financial statements
provided for in Section 7.01(a) shall set forth the amount of the Excess Cash
Flow for the relevant period ending on the last day of the fiscal year covered
by such financial statements.
(f) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event
within ten Business Days after any officer of Holdings or the Borrower obtains
knowledge thereof, notice of (i) the occurrence of any event which constitutes a
Default or Event of Default which notice shall specify the nature thereof, the
period of existence thereof and what action Holdings or the Borrower proposes to
take with respect thereto and (ii) the commencement of, or any significant
adverse development in, any litigation or governmental proceeding pending
against Holdings or any of its Subsidiaries that is reasonably likely to have a
Material Adverse Effect or is reasonably likely to have a material adverse
effect on the ability of the Credit Parties to perform their obligations under
the Credit Documents.
(g) ENVIRONMENTAL MATTERS. Promptly after obtaining knowledge of
any of the following (but only to the extent (A) not disclosed in an
environmental report delivered to the Administrative Agent prior to the Initial
Borrowing Date and (B) that any of the following could reasonably be expected to
(x) have a Material Adverse Effect, either individually or in the aggregate, or
(y) result in a remedial cost to Holdings, the Borrower, and/or its Subsidiaries
in respect of liabilities to the extent not otherwise covered by existing
indemnities, in excess of $5,000,000:
(i) any pending or threatened Environmental Claim against Holdings
or any of its Subsidiaries or any Real Property owned or operated by
Holdings or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property owned or
operated by Holdings or any of its Subsidiaries that (x) results in
noncompliance by Holdings or any of its Subsidiaries with any applicable
Environmental Law or (y) is reasonably likely to result in an Environmental
Claim against Holdings or any of its Subsidiaries or any such Real
Property;
(iii) any condition or occurrence on any Real Property owned or
operated by the Borrower or any of its Subsidiaries that is reasonably
likely to result in such Real Property being subject to any restrictions on
the ownership, occupancy, use or transferability by Holdings or its
Subsidiary, as the case may be, of its interest in such Real Property under
any Environmental Law; and
(iv) the taking of any removal or remedial action in response to
the actual or alleged presence of any Hazardous Material on any Real
Property owned or operated by the Borrower or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and Holdings'
or the relevant Subsidiary's response or
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proposed response thereto. In addition, the Borrower agrees to provide the
Lenders with such detailed reports relating to any of the matters set forth in
clauses (i)-(iv) above as may reasonably be requested by the Administrative
Agent or the Required Lenders.
(h) OTHER INFORMATION. Promptly upon transmission thereof,
(i) copies of any filings and registrations with, and reports to, the Securities
and Exchange Commission or any successor thereto (the "SEC") by Holdings or any
of its Subsidiaries and (ii) copies of all financial statements, proxy
statements, notices and reports as Holdings or any of its Subsidiaries shall
send generally to analysts and the holders of the Senior Subordinated Notes in
their capacity as such holders (to the extent not otherwise delivered to the
Lenders pursuant to this Agreement), and with reasonable promptness, such other
information or documents (financial or otherwise) as the Administrative Agent on
its own behalf or on behalf of the Required Lenders may reasonably request from
time to time.
7.02 BOOKS, RECORDS AND INSPECTIONS. Holdings will, and will cause its
Subsidiaries to, permit, upon reasonable notice to the chief financial officer,
controller or any other Authorized Officer of Holdings or the Borrower, officers
and designated representatives of the Administrative Agent or the Required
Lenders to visit and inspect any of the properties or assets of Holdings and any
of its Subsidiaries in their possession and to examine the books of account of
Holdings and any of its Subsidiaries and discuss the affairs, finances and
accounts of Holdings and of any of its Subsidiaries with, and be advised as to
the same by, its and their officers and independent accountants, all during
normal business hours, at reasonable intervals and to such reasonable extent as
the Administrative Agent or the Required Lenders may desire.
7.03 INSURANCE. Holdings will, and will cause each of its Subsidiaries
to, at all times maintain in full force and effect insurance with reputable and
solvent insurers in such amounts, covering such risks and liabilities and with
such deductibles or self-insured retentions as are in accordance with normal
industry practice in the relevant region. Holdings will, and will cause each of
its Subsidiaries (but in the case of clause (ii) below, only to the extent such
Subsidiary is a Credit Party) to, furnish to the Administrative Agent on the
Initial Borrowing Date and thereafter annually, upon request of the
Administrative Agent, (i) a summary of the insurance carried and (ii)
certificates of insurance and other evidence of such insurance, if any, naming
the Collateral Agent as an additional insured and/or loss payee, to the extent
of its interests therein.
7.04 PAYMENT OF TAXES. Holdings will pay and discharge, and will cause
each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, would become a Lien or charge
upon any material properties of Holdings or any of its Subsidiaries, PROVIDED
that (i) no Foreign Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim to the extent the aggregate failures to pay
same are not reasonably expected to have a Material Adverse Effect and (ii)
neither Holdings nor any Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves with respect thereto
(in the good faith judgment of the management of Borrower) in accordance with
generally accepted accounting principles.
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7.05 CORPORATE FRANCHISES. Holdings will do, and will cause each
Subsidiary to do, or cause to be done, all things reasonably necessary to
preserve and keep in full force and effect its existence and to preserve its
rights and franchises, other than any such rights or franchises the failure to
preserve which could not reasonably be expected to have a Material Adverse
Effect, PROVIDED that any transaction permitted by Section 8.02 will not
constitute a breach of this Section 7.05.
7.06 COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will cause
each Subsidiary to, comply with all applicable statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property other than those the non-compliance with which is not reasonably
likely to have a Material Adverse Effect or have a material adverse effect on
the ability of the Credit Parties to perform their obligations under the Credit
Documents.
7.07 ERISA. As soon as possible and, in any event, within ten (10)
days after Holdings, the Borrower or any Subsidiary knows or has reason to know
of the occurrence of any of the following, the Borrower will deliver to each of
the Lenders a certificate of the chief financial officer of the Borrower setting
forth the full details as to such occurrence and the action, if any, that
Holdings, any Subsidiary or any ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with or
by Holdings, any Subsidiary, any ERISA Affiliate, the PBGC, a Plan participant
or the Plan administrator with respect thereto: that a Reportable Event has
occurred (except to the extent that such Reportable Event is disclosed in Part B
of Schedule V or the Borrower has previously delivered to the Lender a
certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
..64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may reasonably be
expected to be or has been made for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code or Section 303 or 304
of ERISA with respect to a Plan; that any contribution required to be made with
respect to a Plan or Foreign Pension Plan has not been timely made in all
material respects; that a Plan subject to Title IV of ERISA has been or may
reasonably be expected to be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current Liability
which, when added to the aggregate amount of Unfunded Current Liabilities with
respect to all other Plans is reasonably likely to have a Material Adverse
Effect; that proceedings may reasonably be expected to be or have been
instituted to terminate or appoint a trustee to administer a Plan which is
subject to Title IV of ERISA; that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan; that
Holdings, the Borrower or any Subsidiary of the Borrower will or may reasonably
be expected to incur any material liability (including any indirect, contingent,
or secondary liability) to or on account of the termination of or withdrawal
from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
to the extent that Holdings, the Borrower or any Subsidiary of the Borrower will
or may reasonably be expected to incur any such liability with respect to a Plan
other than an
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ERISA Affiliate Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that Holdings or any Subsidiary of Holdings may
incur any material liability pursuant to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides benefits to retired employees or
other former employees (other than as required by Part 6 of Title I, subpart B)
of ERISA and Section 4980B of the Code) or any Plan or any Foreign Pension Plan
in addition to the liability that existed on the Initial Borrowing Date pursuant
to any such plan or plans. The Borrower will deliver to each of the Lenders (i)
a complete copy of the annual report (on Internal Revenue Service Form
5500-series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service and (ii) copies of any records, documents or other
information that must be furnished to the PBGC with respect to any Plan pursuant
to Section 4010 of ERISA; provided that in the case of any Plan that is an ERISA
Affiliate Plan, the foregoing shall only be required to be delivered upon the
reasonable request of the Lender. In addition to any certificates or notices
delivered to the Lender pursuant to the first sentence hereof, copies of annual
reports and any records, documents or other information required to be furnished
to the PBGC, and any material notices received by Holdings or any Subsidiary of
Holdings with respect to any Plan or Foreign Pension Plan shall be delivered to
the Lender no later than thirty days after the date such annual report has been
filed with the Internal Revenue Service or such records, documents and/or
information has been furnished to the PBGC or such notice has been received by
Holdings or any of its Subsidiaries, as applicable. The Borrower will, and will
cause each Subsidiary to, ensure that all Foreign Pension Plans administered by
it or into which it makes payments obtains or retains (as applicable) registered
status under and as required by applicable law and is administered in a timely
manner in all respects in compliance with all applicable laws except where the
failure to do any of the foregoing would not be reasonably likely to result in a
Material Adverse Effect.
7.08 GOOD REPAIR. Holdings will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business are kept in good repair, working order and condition,
normal wear and tear excepted, and, subject to Section 8.05, that from time to
time there are made in such properties and equipment all needful and proper
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner customary for companies in
similar businesses, except, in the case of Foreign Subsidiaries, where all
failures to do the foregoing would not reasonably be likely to result in a
Material Adverse Effect.
7.09 END OF FISCAL YEARS; FISCAL QUARTERS. Holdings will, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years and fourth fiscal quarters to end on March 31 of
each year and (ii) each of its, and each of its Subsidiaries', first three
fiscal quarters to end on the last day of June, September and December of each
year, PROVIDED that Holdings may change its and its Subsidiaries' fiscal year
end to December 31 (and change its and its Subsidiaries fiscal quarters to end
on dates consistent with a December 31 fiscal year end) so long as (i) the
Borrower shall have given the Administrative Agent at least 10 Business Days'
prior written notice thereof and (ii) on or prior to such change in fiscal year
and fiscal quarters, the Borrower and the Required Lenders shall have entered
into certain technical amendments and modifications to this Agreement to
preserve the intent of the parties with
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respect to the covenants and agreements set forth in Sections 8.05, 8.11 and
8.12 and any other provisions of this Agreement deemed appropriate by the Joint
Lead Arrangers and the Borrower.
7.10 ADDITIONAL SECURITY; FURTHER ASSURANCES. (a) Holdings will cause
the Borrower and the Guarantors to grant to the Collateral Agent security
interests and mortgages in owned or leased Real Property with a fair market
value of $5,000,000 or more acquired after the Initial Borrowing Date (including
as a result of the acquisition of any Subsidiary that becomes a Guarantor as
provided in Section 8.07) as may be reasonably requested from time to time by
the Administrative Agent and/or the Required Lenders (collectively, the
"Additional Mortgages"). All such security interests and mortgages shall be
granted pursuant to documentation reasonably satisfactory in form and substance
to the Administrative Agent and shall constitute valid and enforceable Liens
superior to and prior to the rights of all third Persons (except to the extent
subject to any Permitted Encumbrances) and subject to no other Liens except
Permitted Liens. The Additional Mortgages or instruments related thereto shall
be duly recorded or filed in such manner and in such places as are required by
law to establish, perfect, preserve and protect the Liens in favor of the
Collateral Agent required to be granted pursuant to the Additional Mortgages and
all taxes, fees and other charges payable in connection therewith shall be paid
in full. Furthermore, Holdings shall cause to be delivered to the Collateral
Agent such opinions of counsel, title insurance, surveys, flood certificates and
other related documents as may be reasonably requested by the Administrative
Agent to assure itself that this Section 7.10(a) has been complied with.
(b) Holdings will, and will cause the Borrower and the Subsidiary
Guarantors to, at the expense of the Borrower make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments and conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
reports and other assurances or confirmatory instruments and take such further
steps relating to the Collateral covered by any of the Security Documents as the
Collateral Agent may reasonably require.
(c) Additionally, upon the reasonable request (in each case,
taking into account the relative costs (to the Borrower) and benefits (to the
Secured Creditors)) of the Collateral Agent or the Required Lenders, Holdings
shall take, or cause to be taken, such action as may be reasonably requested
(including, without limitation (i) subject to the above-mentioned cost-benefit
analysis, the execution and delivery of pledge or security agreements governed
by applicable local law and (ii) the filing of financing statements) in order to
perfect (or maintain the perfection of) the security interests (or take any
analogous actions under the applicable provisions of local law in order to
protect such security interests) in (x) any Equity Interests in any Foreign
Subsidiary or other foreign Person pledged pursuant to the Pledge Agreement
owned by Holdings or a Domestic Subsidiary, in each case to the extent such
actions are permitted to be taken under the laws of the applicable jurisdictions
and (y) any Collateral the fair market value of which equals or exceeds
$1,000,000 that is located outside the U.S. and is owned by a Qualified Credit
Party, to the extent that such actions are permitted to be taken under the laws
of the applicable jurisdictions. Furthermore, Holdings will, and will cause the
other Credit Parties that are Subsidiaries of Holdings to, deliver to the
Collateral Agent such opinions of counsel and other related documents as may be
reasonably requested by the Administrative Agent to assure itself with the
Credit Parties' compliance with this Section 7.10(c).
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(d) On or prior to 10 Business Days following the Initial
Borrowing Date, the Borrower shall deliver to the Collateral Agent, to the
extent the absence of same would result in any qualification to the related
Mortgage Policy, surveys, in form and substance reasonably satisfactory to the
Collateral Agent, of the Mortgaged Properties, dated (or updated) as of a recent
date and certified in a manner reasonably acceptable to the Collateral Agent by
a licensed surveyor reasonably satisfactory to the Collateral Agent.
(e) Each Credit Party agrees that each action required above by
Sections 7.10(a) and (b) shall be completed as soon as possible, but in no event
later than 60 days after such action is requested to be taken by the
Administrative Agent, the Collateral Agent or the Required Lenders, as the case
may be, PROVIDED that in no event shall the Borrower be required to take any
action, other than using its reasonable commercial efforts without any material
expenditure, to obtain consents from third parties with respect to its
compliance with this Section 7.10.
7.11 COMPLIANCE WITH ENVIRONMENTAL LAWS. (a)(i) Holdings will comply,
and will cause each of its Subsidiaries to comply, with all Environmental Laws
applicable to the ownership, lease or use of all Real Property now or hereafter
owned, leased or operated by Holdings or any of its Subsidiaries, will promptly
pay or cause to be paid all costs and expenses incurred in connection with such
compliance, and will keep or cause to be kept all such Real Property free and
clear of any Liens imposed pursuant to such Environmental Laws and (ii) neither
Holdings nor any of its Subsidiaries will generate, use, treat, store, release
or dispose of, or permit the generation, use, treatment, storage, release or
disposal of Hazardous Materials on any Real Property now or hereafter owned,
leased or operated by Holdings or any of its Subsidiaries, or transport or
permit the transportation of Hazardous Materials to or from any such Real
Property, except to the extent that the failure to comply with the requirements
specified in clause (i) or (ii) above, either individually or in the aggregate,
is not reasonably likely to have a Material Adverse Effect. If legally required
to do so under any applicable directive or order of any governmental agency,
Holdings agrees to undertake, and cause each of its Subsidiaries to undertake,
any clean up, removal, remedial or other action necessary to remove and clean up
any Hazardous Materials from any Real Property owned, leased or operated by
Holdings or any of its Subsidiaries in accordance with, in all material
respects, the requirements of all applicable Environmental Laws and in
accordance with, in all material respects, such orders and directives of all
governmental authorities, except to the extent that Holdings or such Subsidiary
is contesting such order or directive in good faith and by appropriate
proceedings and for which adequate reserves have been established to the extent
required by GAAP; PROVIDED that it will not constitute a breach of this Section
7.11 if a Person other than Holdings and its Subsidiaries takes such action on
behalf of Holdings and its Subsidiaries.
(b) At the request of the Administrative Agent or the Required
Lenders at any time and from time to time during the continuance of an Event of
Default, upon the reasonable belief by the Administrative Agent that Holdings or
any of its Subsidiaries has breached in any material respect any representation
or covenant herein with respect to any environmental matters affecting any
Mortgaged Property and such breach is continuing and/or a notice has been
provided under Section 7.01(g), Holdings and the Borrower will provide, at their
sole cost and expense (or will cause its relevant Subsidiary to provide at its
sole cost and expense), an environmental site assessment report reasonable in
scope concerning any Mortgaged Property that is the
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subject of the breach or notice of Holdings or its Subsidiaries, prepared by an
environmental consulting firm reasonably acceptable to the Administrative Agent,
indicating the presence or Release or absence of Hazardous Materials on or from
any such Mortgaged Property and the potential cost of any removal or remedial
action in connection with any Hazardous Materials on such Mortgaged Property. If
Holdings or the Borrower fails to provide the same after thirty days' notice and
the Event of Default is continuing, the Administrative Agent may order the same,
and Holdings and the Borrower shall grant and hereby grant to the Administrative
Agent and the Lenders and their agents access to such Mortgaged Property and
specifically grants the Administrative Agent and the Lenders an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment all at Holdings, and the Borrower's (joint and several) reasonable
expense, which assessments, if obtained, will be provided to Holdings.
7.12 PERMITTED ACQUISITIONS. (a) Subject to the provisions of this
Section 7.12 and the requirements contained in the definition of Permitted
Acquisition, the Borrower and its Subsidiaries may effect Permitted Acquisitions
in accordance with the definition thereof, so long as (in each case except to
the extent the Required Lenders otherwise specifically agree in writing in the
case of a specific Permitted Acquisition): (i) no Default or Event of Default
shall have occurred and be continuing at the time of the consummation of the
proposed Permitted Acquisition or immediately after giving effect thereto; (ii)
the Borrower shall have given to the Administrative Agent and the Lenders (x) at
least 5 Business Days' prior written notice of any Permitted Acquisition (or
such shorter period of time as may be reasonably acceptable to the
Administrative Agent), which notice shall describe in reasonable detail the
principal terms and conditions of such Permitted Acquisition and (y) a copy of
any "Phase One" or "Phase Two" environmental assessment that the Borrower, in
its discretion, obtained in connection with the proposed Permitted Acquisition;
(iii) in the case of a Significant Acquisition, calculations are made by
Holdings with respect to the financial covenants contained in Sections 8.11 and
8.12 for the Test Period most recently ended on a Post-Test Period Pro Forma
Basis as if the respective Significant Acquisition (as well as all other
Significant Acquisitions and Significant Asset Sales theretofore consummated
after the first day of such Test Period) had occurred on the first day of' such
Test Period, and such calculations shall show that such financial covenants
would have been complied with if the respective Permitted Acquisition had
occurred on the first day of such Test Period; (iv) all representations and
warranties contained herein and in the other Credit Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Permitted Acquisition (both before and after giving effect thereto), unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date; (v) the Aggregate Consideration for such Permitted Acquisitions
shall not exceed either (x) that amount which, when added to the Aggregate
Consideration for all other Permitted Acquisitions theretofore consummated
during the fiscal year in which such Permitted Acquisition is consummated,
equals $15,000,000 (although the provisions of this sub-clause (x) shall not
apply at any time after the receipt of financial statements pursuant to Section
7.01(a) or (b) for a fiscal quarter or year ended on or after March 31, 2003 if,
and so long as, the Consolidated Leverage Ratio for the Test Period most
recently ended for which financial statements have been delivered pursuant to
Section 7.01(a) or (b), as the case may be, is less than or equal to 3.75:1.00,
it being understood and agreed that any Permitted Acquisition made in accordance
with this clause (v) at any time during a fiscal year when this sub-clause (x)
was not applicable shall continue to be permitted at any time during
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such fiscal year when the $15,000,000 per annum limitation contained above in
this sub-clause (x) is subsequently applicable during such fiscal year, although
such per annum limitation shall affect the amount of future Permitted
Acquisitions permitted during such fiscal year in accordance with this
sub-clause (x)) or (y) that amount which, when added to the Aggregate
Consideration for all other Permitted Acquisitions theretofore consummated after
the Effective Date, equals $50,000,000; (vi) in addition to the requirements of
preceding clause (v), in the case of Permitted Acquisitions made after the
Effective Date by any Foreign Subsidiary or where the respective Acquired Entity
or Business is outside, or is organized outside, the United States (or any
portion thereof is so organized or located outside the United States) (A) the
sum of the Aggregate Consideration for all such Permitted Acquisitions (in the
case where a Qualified Credit Party is making the respective Permitted
Acquisition and only a portion of the respective Acquired Entity or Business is
organized or located outside the United States, calculated including only the
fair market values of such assets located, or (without duplication) owned by any
Person (or a Subsidiary of any Person) that is the target Company of the
respective Permitted Acquisition and is organized, outside of the United States)
shall not exceed $15,000,000 (although the $15,000,000 amount described above
shall be deemed changed to "$30,000,000" at any time after the receipt of
financial statements pursuant to Section 7.01(a) or (b) for a fiscal quarter or
year ended on or after March 31, 2003 if, and so long as, the Consolidated
Leverage Ratio for the Test Period most recently ended for which financial
statements have been delivered pursuant to Section 7.01(a) or (b), as the case
may be, is less than or equal to 3.75:1.00, it being understood and agreed that
any Permitted Acquisition made in accordance with this clause (vi) at a time
when the $30,000,000 amount pursuant to this parenthetical was applicable shall
continue to be permitted at any time when the limitation is subsequently reduced
to $15,000,000, although such reduction shall affect the amount of future
Permitted Acquisitions permitted in accordance with this clause (vi)) and (B) no
such Permitted Acquisition described in this clause (vi) may be effected if same
would reduce the Permitted Foreign Investment Amount and, after giving effect to
the respective reduction, the Permitted Foreign Investment Amount would be less
than $0; and (vii) the Borrower shall have delivered to the Administrative Agent
a certificate executed by the chief financial officer or controller of the
Borrower, certifying to the best of such officer's knowledge, compliance with
the requirements of preceding clauses (i) through (vi), inclusive, and
containing the calculations (in reasonable detail) required to establish
compliance with preceding clauses (iii) (if applicable), (v) and (vi).
(b) At the time of each Permitted Acquisition involving the
creation or acquisition of a Domestic Subsidiary or a Foreign Subsidiary that is
a direct Subsidiary of a Domestic Subsidiary, or the acquisition of any Equity
Interests of any Person by a Domestic Subsidiary, the Equity Interests thereof
created or acquired in connection with such Permitted Acquisition shall be
pledged for the benefit of the Secured Creditors pursuant to (and to the extent
required by) the Pledge Agreement.
(c) The Borrower will cause each Subsidiary which is formed to
effect, or is acquired pursuant to, a Permitted Acquisition to comply with, and
to execute and deliver all of the documentation as and to the extent required
by, Sections 7.10 and 8.07, to the reasonable satisfaction of the Administrative
Agent.
(d) The consummation of each Permitted Acquisition shall be deemed
to be a representation and warranty by each of Holdings and the Borrower that
the certifications pursuant
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to this Section 7.12 are true and correct and that all conditions thereto have
been satisfied and that same is permitted in accordance with the terms of this
Agreement, which representation and warranty shall be deemed to be a
representation and warranty for all purposes hereunder, including, without
limitation, Sections 6 and 9.
SECTION 8. NEGATIVE COVENANTS. Holdings and the Borrower hereby
covenant and agree that for so long as this Agreement is in effect and until the
Commitments have terminated, no Letters of Credit or Notes are outstanding and
the Loans and Unpaid Drawings, together with interest, Fees and all other
Obligations (other than any indemnities hereunder and under the other Credit
Documents which are not then owing) incurred hereunder, are paid in full:
8.01 CHANGES IN BUSINESS. (a) Holdings will not permit at any time the
business activities taken as a whole conducted by the Borrower and its
Subsidiaries to be materially different from the business activities taken as a
whole (including incidental activities) conducted by the Borrower and its
Subsidiaries on the Initial Borrowing Date (after giving effect to the
Transaction) and businesses reasonably related thereto and reasonable extensions
thereof.
(b) Holdings will not engage in any business other than its
ownership of the capital stock of, and the management of, the Borrower (or,
after same is established, Intermediate Holdco), provided that (i) Holdings may
engage in those activities that are incidental to (x) the maintenance of its
corporate existence in compliance with applicable law, (y) legal, tax and
accounting matters in connection with any of the foregoing activities and (z)
the entering into, and performing its obligations under, this Agreement, the
other Documents, and the Management Agreement to which it is a party and (ii)
Holdings may issue Equity Interests to the extent permitted under Section 8.13.
(c) From and after the time of its establishment (if any),
Intermediate Holdco will not engage in any business other than its ownership of
the capital stock of, and the management of, the Borrower and other activities
described in the proviso contained in preceding clause (b).
8.02 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC. Holdings
will not, and will not permit any Subsidiary to, wind up, liquidate or dissolve
its affairs, or enter into any transaction of merger or consolidation, or
convey, sell, lease or otherwise dispose of all or any part of its property or
assets (other than inventory or worn-out or obsolete equipment no longer needed
in the conduct of the business, in each case in the ordinary course of business)
or purchase, lease or otherwise acquire all or any part of the property or
assets of any Person (other than purchases or other acquisitions of inventory,
leases, materials, supplies and equipment, in each case in the ordinary course
of business) or agree to do any of the foregoing at any future time without a
contingency relating to obtaining any required approval hereunder, except that
the following shall be permitted:
(a) (i) any Subsidiary of the Borrower may be merged or
consolidated with or into, or be liquidated into, a Qualified Credit Party (so
long as a Qualified Credit Party (which must be the Borrower in the case of any
such transaction with the Borrower) is the surviving corporation), and (ii) the
Borrower or any Subsidiary thereof may, in the ordinary course of
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business consistent with past practices, convey, sell, lease or otherwise
transfer all or any part of its business, properties and assets to a Qualified
Credit Party;
(b) Consolidated Capital Expenditures may be made by the Borrower
and its Subsidiaries to the extent within the limitations set forth in Section
8.05 hereof, and Reinvestment Assets may be acquired as specifically permitted
by Section 4.02(A)(c) hereof;
(c) the investments, acquisitions and transfers or dispositions of
properties permitted pursuant to Section 8.06;
(d) each of the Borrower and any Subsidiary may lease (as lessee)
real or personal property (but not pursuant to sale-leaseback transactions) in
the ordinary course of business (so long as such lease does not create a
Capitalized Lease Obligation not otherwise permitted by Section 8.04(c) and
(j));
(e) licenses or sublicenses by the Borrower and its Subsidiaries
of intellectual property in the ordinary course of business, PROVIDED, that such
licenses or sublicenses shall not interfere with the business of the Borrower or
any Subsidiary except, in the case of any such license or sublicense by a
Foreign Subsidiary, as is not reasonably likely to have Material Adverse Effect;
(f) sales (but not pursuant to sale-leaseback transactions) of
assets by the Borrower and its Subsidiaries to Persons other than Holdings or a
Subsidiary thereof so long as (A) the assets sold comprise all or a portion of
the Industrial Chain Business (or Equity Interests in Persons whose only assets
at the time of such sale comprise all or a portion of the Industrial Chain
Business) and/or (B) to the extent any assets sold do not qualify pursuant to
the preceding clause (A), the aggregate Net Cash Proceeds received from all
sales permitted by this sub-clause (B) do not exceed $30,000,000 in the
aggregate, PROVIDED that (1) each sale pursuant to this Section 8.02(f) shall
result in the Borrower or the respective Subsidiary receiving consideration in
an amount at least equal to the fair market value of the assets sold, which
consideration shall consist of at least 75% cash (with the assumption of
Indebtedness and the sale for cash within 30 days of receipt of securities
received calculated as cash), (2) the Net Cash Proceeds of each sale pursuant to
this Section 8.02(f) are applied to repay the Loans to the extent required by
Section 4.02(A)(c) and (3) in the case of a sale or disposition of the Equity
Interests of any Subsidiary of the Borrower (or a Person which was a Subsidiary
of the Borrower prior to such sale or disposition) which represent less than
100% of the Equity Interests in such Subsidiary owned by Holdings and its
Subsidiaries (unless the sale or disposition represents a subsequent sale of
Equity Interests in a Subsidiary which previously had Equity Interests sold
after the Effective Date pursuant to this clause (f)), then the amount by which
the fair market value (as determined in good faith by the Borrower) of all the
Equity Interests in such Subsidiary owned by the Borrower and its Subsidiaries
immediately before such sale or disposition exceeds the Net Cash Proceeds
received by the Borrower and its Subsidiaries from such disposition, shall be
deemed to constitute an investment which shall only be permitted if same does
not exceed the Permitted JV Investment Amount at the time of such sale or
disposition; and, PROVIDED FURTHER, that the sale or disposition of Equity
Interests of the Borrower shall be prohibited, except that 100% of the Equity
Interests of the Borrower may be transferred to Intermediate Holdco
contemporaneously with or after the establishment of same in accordance with the
definition thereof;
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(g) the Acquisition;
(h) leases and subleases permitted under Section 8.03(g);
(i) the Borrower and any of its Domestic Subsidiaries may convey,
sell, lease or otherwise transfer assets (other than Equity Interests in any
Domestic Subsidiary) to any Foreign Subsidiary, PROVIDED that the fair market
value (as determined by the Borrower in good faith) of the assets so conveyed,
sold or transferred (net of the amount of any cash consideration received
therefor) does not exceed the Permitted Foreign Investment Amount at the time of
the respective conveyance, sale or transfer;
(j) the Borrower and any of its Subsidiaries may convey, sell,
lease or otherwise transfer assets to any Joint Venture, PROVIDED that the fair
market value (as determined by the Borrower in good faith) of the assets so
conveyed, sold, leased or otherwise transferred (net of the amount of any cash
consideration received therefor) does not exceed the Permitted JV Investment
Amount at the time of the respective such conveyance, sale or transfer;
(k) Foreign Subsidiaries may sell assets pursuant to
Sale/Leaseback Transactions so long as at no time shall the aggregate amount of
the Attributable Debt arising from such Sale/Leaseback Transactions, when added
(without duplication) to the Permitted Factoring Transaction Outstandings and
the aggregate principal amount of Indebtedness outstanding pursuant to Section
8.04(i) at such time, exceed the Permitted Foreign Subsidiary Debt Amount as
then in effect;
(l) Foreign Subsidiaries may convey, sell, lease or otherwise
transfer assets to other Foreign Subsidiaries;
(m) Foreign Subsidiaries may sell receivables and related assets
pursuant to factoring arrangements so long as at no time shall the aggregate
amount of Permitted Factoring Transaction Outstandings arising from such
factoring arrangements, when added (without duplication) to the Attributable
Debt arising from Sale/Leaseback Transactions at such time and the aggregate
principal amount of Indebtedness outstanding pursuant to Section 8.04(i) at such
time, exceed the Permitted Foreign Subsidiary Debt Amount as then in effect; and
(n) the Borrower and its Subsidiaries may sell (without recourse)
receivables (and related assets) arising from goods and services provided to
Honeywell International Inc. pursuant to factoring arrangements entered into in
the ordinary course of business consistent with past practices so long as at no
time shall the aggregate amount of Permitted Honeywell Receivables Transaction
Outstandings arising from such factoring arrangements exceed $1,500,000.
8.03 LIENS. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of Holdings or any such Subsidiary whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable or notes with recourse to Holdings or
any of its Subsidiaries) or assign any right to receive income, except:
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(a) Liens for taxes not yet delinquent or Liens for taxes being
contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of the Borrower) have
been established;
(b) Liens in respect of property or assets of the Borrower or any
of its Subsidiaries imposed by law which were incurred in the ordinary course of
business, such as carriers', warehousemen's and mechanics' Liens, statutory
landlord's Liens, and other similar Liens arising in the ordinary course of
business, and (x) which do not in the aggregate materially detract from the
value of such property or assets or materially impair the use thereof in the
operation of the business of the Borrower or any of its Subsidiaries or (y)
which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement or the other
Credit Documents;
(d) Liens created pursuant to Capital Leases permitted by
Section 8.04(c);
(e) Liens arising from judgments, decrees or attachments and Liens
securing appeal bonds arising from judgments, in each case in circumstances not
constituting an Event of Default under Section 9.09 so long as the aggregate
fair market value of all assets subject to such Liens does not exceed
$7,500,000;
(f) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (x) in connection with workers'
compensation, unemployment insurance and other types of social security or (y)
to secure the performance of tenders, statutory obligations, surety bonds, bids,
leases, government contracts, performance and return-of-money bonds and other
similar obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money); PROVIDED that (i) any
consensual Liens as described above shall not apply or attach to any of the
Collateral (other than cash, Cash Equivalents and Foreign Cash Equivalents) and
(ii) consensual Liens as described in clause (y) above shall not be secured at
any time by cash, Cash Equivalents, Foreign Cash Equivalents and/or other
property of Holdings and its Subsidiaries with an aggregate fair market value in
excess of $7,500,000;
(g) leases or subleases to others in the ordinary course of
business not interfering in any material respect with the business of the
Borrower or any of its Subsidiaries;
(h) Permitted Encumbrances, easements, rights-of-way,
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances not interfering in any material respect with the ordinary
conduct of the business of Holdings or any of its Subsidiaries;
(i) Liens arising from UCC financing statements regarding leases
permitted by this Agreement;
(j) (x) receipt of progress payments and advances from customers
in the ordinary course of business to the extent same creates a Lien on the
related inventory and proceeds therefrom and (y) purchase money Liens securing
current account payables arising
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from the purchase by the Borrower or any Subsidiary of any equipment or goods in
the ordinary course of business, PROVIDED that such Liens shall not extend to
any other property of Holdings or any of its Subsidiaries;
(k) any interest or title of a lessor under any lease permitted by
this Agreement;
(l) Liens in existence on, and which are to continue in effect
after, the Initial Borrowing Date which are listed, and the property subject
thereto described in, Schedule VIII, in each case subject to the limitations
with respect to any such Lien set forth in such Schedule VIII and without giving
effect to any extension or renewal thereof;
(m) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price (or financing of
the purchase price within 90 days after the respective purchase) of assets
acquired by the Borrower or any Subsidiary after the Effective Date, PROVIDED
that (x) any such Liens attach only to the assets so acquired and proceeds
thereof, (y) the Indebtedness secured by any such Lien does not exceed 100%, nor
is less than 70%, of the purchase price of the property being purchased at the
time of the incurrence of such Indebtedness and (z) all Indebtedness secured by
Liens created pursuant to this clause (m) shall not exceed the amount permitted
to be outstanding pursuant to Section 8.04(d);
(n) Liens on property or assets (and proceeds therefrom) acquired
pursuant to a Permitted Acquisition, or on property or assets of a Subsidiary of
the Borrower (and proceeds therefrom) in existence at the time such Subsidiary
is acquired pursuant to a Permitted Acquisition, PROVIDED that (x) any
Indebtedness that is secured by such Liens is permitted to exist under Section
8.04(j), and (y) such Liens are not incurred in connection with, or in
contemplation or anticipation of, such Permitted Acquisition and do not attach
to any asset of Holdings or any other asset of the Borrower or any of its
Subsidiaries;
(o) Liens on property or assets of Foreign Subsidiaries securing
Indebtedness permitted under Section 8.04(i); and
(p) Liens on receivables (and proceeds thereof) sold in accordance
with Section 8.02(n).
8.04 INDEBTEDNESS. Holdings will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Indebtedness of (i) any Qualified Credit Party owing to
another Qualified Credit Party, (ii) the Borrower or any of its Domestic
Subsidiaries owing to Foreign Subsidiaries arising from loans and advances made
in accordance with Section 8.06(j), (iii) Foreign Subsidiaries owing to the
Borrower or any of its Domestic Subsidiaries arising from loans and advances
made in accordance with Section 8.06(k) and (iv) any Foreign Subsidiary owing to
another Foreign Subsidiary;
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(c) Capitalized Lease Obligations of the Borrower and its
Subsidiaries arising after the Initial Borrowing Date, PROVIDED that the
aggregate amount of such Capitalized Lease Obligations outstanding pursuant to
this clause (c), when added to the aggregate principal amount of Indebtedness
then outstanding pursuant to following clause (d), shall at no time exceed
$25,000,000;
(d) Indebtedness incurred pursuant to purchase money mortgages or
security interests permitted by Section 8.03(m), provided that the aggregate
principal amount of Indebtedness outstanding pursuant to this clause (d), when
added to the aggregate amount of Capitalized Lease Obligations then outstanding
pursuant to preceding clause (c), shall at no time exceed $25,000,000;
(e) unsecured Indebtedness of the Borrower, as issuer, and
Holdings and any Subsidiary Guarantor (for so long as such Person remains a
Guarantor), in each case as a senior subordinated guarantor, incurred under the
Senior Subordinated Notes and the other Senior Subordinated Note Documents in an
aggregate principal amount not to exceed $225,000,000 less the amount of any
repayments of principal thereof after the Effective Date (it being understood
that the issuance of Senior Subordinated Notes upon the exchange offer as
contemplated in the Senior Subordinated Note Indenture shall not be considered a
repayment of such Indebtedness);
(f) Existing Indebtedness and any Refinancing Indebtedness in
respect thereof;
(g) Indebtedness of the Borrower or any of its Subsidiaries under
Other Hedging Agreements providing protection to the Borrower and its
Subsidiaries against fluctuations in currency values or commodity prices in
connection with the Borrower's or any of its Subsidiaries' operations so long as
the entering into of such Other Hedging Agreements are BONA FIDE hedging
activities and are not for speculative purposes;
(h) Indebtedness of the Borrower or any of its Subsidiaries under
Interest Rate Protection Agreements entered into with respect to other
Indebtedness permitted to be incurred by such Person under this Section 8.04 so
long as the entering into of such Interest Rate Protection Agreements are BONA
FIDE hedging activities and are not for speculative purposes;
(i) `Indebtedness of Foreign Subsidiaries in respect of local
lines of credit, letters of credit, bank guarantees, factoring arrangements,
Sale/Leaseback Transactions and similar extensions of credit, provided that (i)
such Indebtedness shall not be guaranteed by any Credit Party or otherwise
supported by any Credit Party (or any of such Credit Party's assets) in any
manner (except to the extent such guarantee or support is independently
permitted under Section 8.04(k)) and (ii) at no time shall the aggregate
outstanding principal amount of such Indebtedness (calculated without
duplication of any guarantees of such Indebtedness by a Foreign Subsidiary) PLUS
(without duplication) all Attributable Debt at such time PLUS all Permitted
Factoring Transaction Outstandings at such time exceed the Permitted Foreign
Subsidiary Debt Amount as then in effect;
(j) Indebtedness of a Subsidiary of the Borrower (x) acquired
pursuant to a Permitted Acquisition (or Indebtedness assumed at the time of a
Permitted Acquisition of an
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asset securing such Indebtedness), PROVIDED that (i) such Indebtedness was not
incurred in connection with, or in anticipation or contemplation of, such
Permitted Acquisition, (ii) such Indebtedness does not constitute debt for
borrowed money, it being understood and agreed that Capitalized Lease
Obligations and purchase money Indebtedness shall not constitute debt for
borrowed money for purposes of this clause (ii), and (iii) the aggregate
principal amount of all Indebtedness permitted by this clause (j) shall not
exceed $5,000,000 at any time outstanding, and (y) consisting of Refinancing
Indebtedness incurred to refinance Indebtedness theretofore outstanding pursuant
to this clause (j);
(k) Contingent Obligations (including under letters of credit
(including, without limitation, those described in clause (v) of Section
2.01(b)) and other guarantees) of the Borrower and its Domestic Subsidiaries
with respect to Indebtedness and other obligations of Foreign Subsidiaries,
PROVIDED that at no time shall the aggregate outstanding amount of such
Contingent Obligations (calculated taking the maximum liability thereunder)
exceed the Permitted Foreign Investment Amount as then in effect;
(l) Contingent Obligations (including under letters of credit and
other guarantees) of the Borrower and its Domestic Subsidiaries with respect to
Indebtedness and other obligations of Joint Ventures, PROVIDED that at no time
shall the aggregate outstanding amount of such Contingent Obligations
(calculated taking the maximum liability thereunder) exceed the Permitted JV
Investment Amount as then in effect;
(m) earn-out, indemnities and purchase price adjustments pursuant
to the Acquisition Agreement or pursuant to any agreement for any Permitted
Acquisition;
(n) Indebtedness of the Borrower or any of its Subsidiaries
arising in the ordinary course of business from the honoring by a bank or other
financial institution of a check, draft or similar instrument made by a third
party to the Borrower or such Subsidiary and drawn against insufficient funds;
(o) Contingent Obligations arising from guarantees made by
Qualified Credit Parties in the ordinary course of business of obligations
(other than Indebtedness) of other Qualified Credit Parties otherwise permitted
hereunder;
(p) Contingent Obligations arising from guarantees made by Foreign
Subsidiaries in the ordinary course of business of obligations (other than
Indebtedness) of other Foreign Subsidiaries otherwise permitted hereunder;
(q) intercompany loans permitted under Section 8.06(p); and
(r) additional unsecured Indebtedness of the Borrower and its
Subsidiaries not to exceed an aggregate outstanding principal amount of
$10,000,000 at any time.
8.05 CONSOLIDATED CAPITAL EXPENDITURES. (a) Holdings will not, and
will not permit any of its Subsidiaries to, incur Consolidated Capital
Expenditures, except that (i) during the period from the Effective Date through
and including March 31, 2003, the Borrower and its Subsidiaries may make
Consolidated Capital Expenditures so long as the aggregate amount of all such
Consolidated Capital Expenditures does not exceed $17,000,000, and (ii) during
any fiscal
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year of Holdings set forth below, the Borrower and its Subsidiaries may make
Consolidated Capital Expenditures so long as the aggregate amount of all such
Consolidated Capital Expenditures does not exceed in any fiscal year of Holdings
set forth below the amount set forth opposite such fiscal year below:
FISCAL YEAR ENDING ON AMOUNT
--------------------- ------
March 31, 2004 $ 31,000,000
March 31, 2005 $ 33,000,000
March 31, 2006 $ 34,000,000
March 31, 2007 $ 35,000,000
March 31, 2008 $ 36,000,000
March 31, 2009 $ 37,000,000
March 31, 2010 $ 38,000,000
(b) In addition to the foregoing, in the event that the amount of
Consolidated Capital Expenditures permitted to be made by the Borrower and its
Subsidiaries pursuant to clause (a) above in any fiscal year of Holdings (or
during the period set forth in clause (a)(i) above) (before giving effect to any
increase in such permitted Consolidated Capital Expenditure amount pursuant to
this clause (b)) is greater than the amount of Consolidated Capital Expenditures
actually made by the Borrower and its Subsidiaries during such fiscal year (or
such period, as the case may be), such excess may be carried forward and
utilized to make Consolidated Capital Expenditures in the immediately succeeding
fiscal year, PROVIDED that in no event shall the amount permitted to be carried
over pursuant to this Section 8.05(b) exceed $5,000,000 in any fiscal year and
no amounts once carried forward pursuant to this Section 8.05(b) may be carried
forward to any fiscal year of Holdings thereafter.
8.06 ADVANCES, INVESTMENTS AND LOANS. Holdings will not, and will not
permit any of its Subsidiaries to, lend money or credit or make advances to any
Person, or purchase or acquire any stock, obligations or securities of, or any
other interest in, or make any capital contribution to any Person, or enter into
any Other Hedging Agreement or Interest Rate Protection Agreement; except:
(a) (i) Holdings may invest in cash and Cash Equivalents, (ii) the
Borrower or any Domestic Subsidiary may invest in (x) cash and Cash Equivalents
and (y) Foreign Cash Equivalents in an aggregate amount (for the Borrower and
all Domestic Subsidiaries) not to exceed (taking the Dollar Equivalent thereof)
$5,000,000 at any time outstanding and (iii) any Foreign Subsidiary of the
Borrower may invest in cash, Cash Equivalents and Foreign Cash Equivalents;
(b) the Borrower and any Subsidiary may acquire and hold
receivables owing to them, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms
and/or reasonable extensions thereof;
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(c) (i) loans and advances to officers, directors and employees in
the ordinary course of business in an aggregate principal amount not to exceed
$2,000,000 at any time outstanding shall be permitted, PROVIDED that no such
loans or advances may be made to any directors for relocation purposes and (ii)
loans and advances to officers, directors and employees for the purpose of
financing any such Person's purchase of capital stock of Holdings, provided that
100% of the proceeds from each such loan or advance are used to purchase such
capital stock and Holdings thereafter immediately contributes 100% of the
proceeds received as consideration for such purchase to the common equity
capital of the Borrower;
(d) the Borrower and each Subsidiary may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(e) advances, loans and investments in existence on the Effective
Date and listed on Part A of Schedule IX, without giving effect to any additions
thereto or replacements thereof, shall be permitted;
(f) (i) the Borrower and each Domestic Subsidiary may make capital
contributions to any of their Subsidiaries that is a Qualified Credit Party and
(ii) Foreign Subsidiaries may make loans and advances and capital contributions
to, and other investments in, other Foreign Subsidiaries;
(g) Subsidiaries may be established or created in accordance with
the provisions of Section 8.07;
(h) the Borrower and its Subsidiaries may enter into Interest Rate
Protection Agreements to the extent permitted by Section 8.04(h) and the
Borrower and its Subsidiaries may enter into Other Hedging Agreements to the
extent permitted by Section 8.04(g);
(i) Permitted Acquisitions shall be permitted in accordance with
Section 7.12 and the definition thereof;
(j) Foreign Subsidiaries may make loans and advances to the
Borrower and its Domestic Subsidiaries, provided that any and all such loans and
advances made pursuant to this clause (j) are subordinated to the Obligations
pursuant to a Subordination Agreement in the form of Exhibit K;
(k) so long as no Default or Event of Default, in either case
pursuant to Section 9.01 or 9.05 hereof, is then in existence or would exist
immediately after giving effect thereto, the Borrower and its Domestic
Subsidiaries may make capital contributions, loans or advances or other
investments, to any Foreign Subsidiary so long as the aggregate amount of all
such cash capital contributions, loans and advances and other investments made
after the Initial Borrowing Date (without giving effect to any write-offs or
write-downs thereof) does not exceed the Permitted Foreign Investment Amount;
(l) the Acquisition shall be permitted;
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(m) Qualified Credit Parties may make intercompany loans and
advances to one another in accordance with Section 8.04(b)(i), provided that
each such loan and advance shall be subordinated to the Obligations pursuant to
a Subordination Agreement in the form of Exhibit K;
(n) Investments arising from the receipt by the Borrower or any of
its Subsidiaries of non-cash consideration in connection with sales or
dispositions of assets made under Section 8.02(f) shall be permitted;
(o) Borrower may make loans and advances to Holdings if, and to
the extent that, Borrower would have otherwise been permitted to pay Dividends
in a like amount to Holdings pursuant to Section 8.09(iii), (iv), (v) or (viii)
hereof, PROVIDED that any such loan shall reduce the amount permitted to be paid
as Dividends pursuant to Section 8.09(iii), (iv), (v) or (viii), as the case may
be, in an amount equal to the principal amount of each such loan (without giving
effect to the write-down or write-off thereof);
(p) (A) intercompany loans made (i) by the Borrower to Rexnord
Finance BV and to certain other Foreign Subsidiaries and (ii) by RBS Acquisition
Corporation and by RBS North America, Inc. to Rexnord Finance BV and to certain
other Foreign Subsidiaries, in each case in connection with the Acquisition to
finance the purchase price of certain foreign entities of the Rexnord Business
being acquired pursuant to the Acquisition and (B) certain other investments and
sales of notes and Equity Interests made by the Borrower, RBS Acquisition
Corporation and RBS North America, Inc. in or to certain of their respective
Foreign Subsidiaries in connection with the Acquisition in order to finance the
purchase price of certain foreign entities of the Rexnord Business, and
described in Part B of Schedule IX;
(q) so long as no Default or Event of Default is in existence or
would exist immediately after giving effect thereto, loans and investments in,
and acquisition of interests in, Joint Ventures, provided that in no event shall
the aggregate amount of any loan, investment or acquisition made pursuant to
this clause (q) exceed the Permitted Joint Venture Amount at the time of the
respective such loan, investment or acquisition; and
(r) so long as no Default or Event of Default is in existence or
would exist immediately after giving effect thereto, other advances, loans and
investments so long as the aggregate amount thereof (determined as the amount
originally advanced, loaned or otherwise invested (without giving effect to any
write-downs or write-offs thereof), less any returns on the respective
investment not to exceed the original amount invested) at no time outstanding
exceeds $5,000,000.
8.07 LIMITATION ON CREATION OF SUBSIDIARIES. Holdings will not, and
will not permit any Subsidiary to, establish, create or acquire any Subsidiary
after the Initial Borrowing Date; PROVIDED that the Borrower and its
Subsidiaries shall be permitted to establish and create and, to the extent
otherwise permitted pursuant to Section 8.02, acquire (A) Wholly-Owned Domestic
Subsidiaries, so long as (i) 100% of the Equity Interests of each such new
Subsidiary is pledged pursuant to the Pledge Agreement and the certificates
representing such Equity Interests, if any, together with endorsements for the
transfer thereof duly executed in blank, are delivered to the Collateral Agent
and (ii) such new Wholly-Owned Domestic Subsidiary (x) becomes a
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party to the Subsidiaries Guaranty, the Pledge Agreement and the Security
Agreement by executing counterparts of such Credit Documents or by executing a
counterpart of a Joinder Agreement in the form of Exhibit L (each a "Joinder
Agreement") and taking the actions specified therein and (y) executes and
delivers counterparts of one or more Mortgages to the extent required under
Section 7.10, in each case on the same basis (and to the same extent) as such
Subsidiary would have executed such Credit Documents if it were a Credit Party
on the Initial Borrowing Date, provided that to the extent such new Wholly-Owned
Domestic Subsidiary is created solely for the purposes of consummating a merger
transaction pursuant to a Permitted Acquisition, and such new Wholly-Owned
Domestic Subsidiary at no time holds any assets or liabilities other than any
merger consideration contributed to it contemporaneously with the closing of
such merger transaction, such Wholly-Owned Domestic Subsidiary shall not be
required to take the actions set forth in sub-clauses (i) and (ii) of this
clause (A) until the respective Permitted Acquisition is consummated (at which
time the surviving entity of the respective merger transaction shall be required
to so comply (within the 10 Business Day period referred to below)), (B) other
Domestic Subsidiaries, which are not Wholly-Owned Subsidiaries, resulting from
investments made pursuant to Section 8.06(q) and/or (r) (and so long as all
investments therein by Holdings and its Subsidiaries are otherwise permitted
pursuant thereto), so long as 100% of the Equity Interests of such Domestic
Subsidiary held by the Credit Parties is pledged pursuant to the Pledge
Agreement and the certificates representing such Equity Interests, if any,
together with endorsements for the transfer thereof duly executed in blank are
delivered to the Collateral Agent and (C) Foreign Subsidiaries so long as (I) to
the extent such Foreign Subsidiary is owned by a Credit Party, the Equity
Interests of such Foreign Subsidiary are pledged to the Collateral Agent
pursuant to, and to the extent required by, the Pledge Agreement (except that
the Equity Interests of any Foreign Subsidiary created solely for the purposes
of consummating a merger transaction pursuant to a Permitted Acquisition, so
long as such Foreign Subsidiary at no time holds any assets or liabilities other
than merger consideration contributed to it contemporaneously with the closing
of such merger transaction, need not be so pledged until the date of the
consummation of the respective Permitted Acquisition, at which time the Equity
Interests of the surviving entity thereof shall be required to be so pledged
(within the 10 Business Day period referred to below)) and (II) all investments
(and any other contribution) made by Holdings or any of its Subsidiaries in or
to any such Foreign Subsidiary are otherwise permitted under Section 8.06 and
(D) Holdings shall be permitted to create Intermediate Holdco (in accordance
with the definition thereof contained herein) so long as Intermediate Holdco
complies with the requirements set forth above in clause (A)(i) and (A)(ii) (to
the same extent as if it were a direct Wholly-Owned Subsidiary of the Borrower).
All actions required as set forth above shall be completed within 10 Business
Days after the date of the acquisition or creation of the respective Subsidiary,
except that (x) all requirements set forth above with respect to Intermediate
Holdco shall be required to be satisfied on such sooner date, if any, as any
Equity Interests of the Borrower are transferred to it and (y) all requirements
with respect to Mortgages shall be completed within the time set forth in
Section 7.10.
8.08 MODIFICATIONS; PREPAYMENTS; ETC. Holdings will not, and will not
permit any of its Subsidiaries to:
(a) make (or give any notice or offer in respect of) any voluntary
or optional payment or prepayment or redemption or acquisition for value of, or
prepayment or redemption of as a result of any change of control, asset sale or
similar event (including in each case, without
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limitation, by way of depositing with the trustee with respect thereto money or
securities before due for the purpose of paying when due), any Senior
Subordinated Notes (it being understood that the consummation of the exchange
offer as contemplated in the Senior Subordinated Note Indenture shall not
violate this clause (a));
(b) (i) amend or modify (or permit the amendment or modification
of) any subordination provision (or any definition related to any subordination
provision) of the Senior Subordinated Note Documents or (ii) amend or modify (or
permit the amendment or modification) of any other provision of any Senior
Subordinated Note Documents in any manner adverse to the interests of the
Lenders; or
(c) amend, modify or change in any manner adverse to the interests
of the Lenders the organizational documents (including by-laws) of any Credit
Party.
8.09 DIVIDENDS, ETC. Holdings will not, and will not permit any of its
Subsidiaries to, declare or pay any dividends (other than dividends payable
solely in common stock of such Person) or return any capital to, its
stockholders, members and/or other owners of Equity Interests or authorize or
make any other distribution, payment or delivery of property or cash to its
stockholders, members and/or other owners of Equity Interests as such, or
redeem, retire, purchase or otherwise acquire, directly or indirectly, for a
consideration, any of its Equity Interests now or hereafter outstanding (or any
warrants for or options or stock appreciation rights in respect of any of such
Equity Interests), or set aside any funds for any of the foregoing purposes, or
permit any of its Subsidiaries to purchase or otherwise acquire for
consideration any of the Equity Interests of Holdings or any other Subsidiary,
as the case may be, now or hereafter outstanding (or any options or warrants or
stock appreciation rights issued by such Person with respect to its Equity
Interests) (all of the foregoing "Dividends"), except that:
(i) any Subsidiary of the Borrower may pay Dividends or return
capital or make distributions and other similar payments with regard to its
Equity Interests to the Borrower or to a Wholly-Owned Subsidiary of the
Borrower which owns equity therein;
(ii) any non-Wholly-Owned Subsidiary of the Borrower may declare
and pay cash Dividends to its shareholders generally so long as the
Borrower or its respective Subsidiary which owns the Equity Interests in
the Subsidiary paying such Dividends receives at least its proportionate
share thereof (based upon its relative holding of the Equity Interests in
the Subsidiary paying such Dividends and taking into account the relative
preferences, if any, of the various classes of Equity Interests of such
Subsidiary);
(iii) so long as no Default or Event of Default exists at the time
of the respective Dividend, redemption or repurchase or would exist
immediately after giving effect thereto, the Borrower may pay cash
Dividends to Holdings (through Intermediate Holdco to the extent same has
been created) to allow Holdings to redeem or repurchase (and Holdings may
redeem or repurchase), contemporaneously with such Dividend, Equity
Interests of Holdings from officers, employees and directors (or their
estates) after the death, permanent disability, retirement or termination
of employment of any such Person or otherwise in accordance with any stock
option plan or any employee stock ownership plan that has been approved by
the Board of Directors of Holdings, PROVIDED
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that the aggregate principal amount of Dividends made by the Borrower to
Holdings pursuant to this clause (iii), and the aggregate amount paid by
Holdings in respect of all such Equity Interests so redeemed or
repurchased, in any calendar year shall not, in either case, exceed
$2,000,000;
(iv) the Borrower may pay cash Dividends to Holdings (through
Intermediate Holdco to the extent same has been created) so long as the
proceeds thereof are promptly used by Holdings to pay operating expenses in
the ordinary course of business (including, without limitation,
professional fees and expenses) and other similar corporate overhead costs
and expenses, PROVIDED that the aggregate amount of cash Dividends paid
pursuant to this clause (iv) during any fiscal year of Holdings shall not
exceed $1,000,000;
(v) the Borrower may pay cash Dividends to Holdings (through
Intermediate Holdco to the extent same has been created) in the amounts and
at the times of any payment by Holdings in respect of taxes, PROVIDED that
(x) the amount of cash Dividends paid pursuant to this clause (v) to enable
Holdings to pay Federal and state income taxes at any time shall not exceed
the amount of such Federal and state income taxes actually owing by
Holdings at such time for the respective period and (y) any refunds
received by Holdings shall promptly be returned by Holdings to the
Borrower;
(vi) before the occurrence of a Qualified Public Offering, Holdings
may pay Dividends with the net cash proceeds of substantially
contemporaneous sales or issuances of its capital stock (other than
issuances or sales of its capital stock pursuant to a public offering or
Qualified Public Offering) to Persons other than its Subsidiaries;
(vii) any non-Wholly-Owned Subsidiary of the Borrower may repurchase
or redeem its outstanding minority Equity Interests held by third Persons,
provided that the aggregate amount of payments made in respect of all such
repurchases and redemptions shall not exceed $1,000,000;
(viii) the Borrower may pay cash Dividends to Holdings (through
Intermediate Holdco to the extent same has been created) in the amounts and
at the times of any required payments by Holdings (which will actually be
paid with such cash Dividends) pursuant to the Management Agreement, so
long as such amounts are then permitted to be paid pursuant to Section
8.10(v) or (vi), as the case may be; and
(ix) Holdings may return to Carlyle and other Persons cash equity
contributions initially made by Carlyle or such other Persons to Holdings
to finance Permitted Acquisitions, Capital Expenditures or investments in
Joint Ventures or Foreign Subsidiaries (in each case permitted hereunder),
that have not been utilized for such purposes, provided that (i) such cash
equity contributions are returned within 180 days following the respective
cash equity contribution made by Carlyle or such other Person to Holdings
and (ii) such cash equity contributions have not theretofore been
contributed by Holdings to the Borrower or any Subsidiary thereof.
8.10 TRANSACTIONS WITH AFFILIATES. Holdings will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
after the Effective Date whether
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or not in the ordinary course of business, with any Affiliate other than on
terms and conditions substantially as favorable to Holdings or such Subsidiary
as would be obtainable by Holdings or such Subsidiary at the time in a
comparable arm's-length transaction with a Person other than an Affiliate,
except that the following in any event shall be permitted:
(i) Dividends may be paid to the extent provided in Section 8.09;
(ii) loans may be made and other transactions may be entered into
by Holdings and its Subsidiaries to the extent permitted by Sections 8.02,
8.04 and 8.06;
(iii) customary fees and indemnifications may be paid to directors
of Holdings and its Subsidiaries;
(iv) Holdings and its Subsidiaries may enter into, and may make
payments under, employment agreements, employee benefits plans, stock
option plans, indemnification provisions and other similar compensatory
arrangements with officers, employees and directors of Holdings and its
Subsidiaries in the ordinary course of business;
(v) so long as no Default under Section 9.01 or 9.05 and no Event
of Default under Section 9.01 or 9.05 shall exist (both before and
immediately after giving effect thereto), Holdings and/or the Borrower may
pay management fees and transaction fees to Carlyle and the Carlyle
Affiliates pursuant to the terms of the Management Agreement; and
(vi) Holdings and/or the Borrower may reimburse Carlyle and the
Carlyle Affiliates for their reasonable out-of-pocket expenses pursuant to
the terms of the Management Agreement.
Notwithstanding anything to the contrary contained above in this Section 8.10,
in no event shall Holdings or any of its Subsidiaries pay any management,
consulting or similar fee to Carlyle or any Carlyle Affiliate except as
specifically provided in clauses (v) and (vi) of this Section 8.10.
8.11 CONSOLIDATED INTEREST COVERAGE RATIO. Holdings will not permit
the Consolidated Interest Coverage Ratio for any Test Period ending on the last
day of any fiscal quarter set forth below to be less than the ratio set forth
opposite such fiscal quarter:
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2003 2.25:1.00
June 30, 2003 2.25:1.00
September 30, 2003 2.25:1.00
December 31, 2003 2.25:1.00
March 31, 2004 2.25:1.00
June 30, 2004 2.25:1.00
September 30, 2004 2.25:1.00
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Fiscal Quarter Ending Ratio
--------------------- -----
December 31, 2004 2.25:1.00
March 31, 2005 2.25:1.00
June 30, 2005 2.25:1.00
September 30, 2005 2.35:1.00
December 31, 2005 2.35:1.00
March 31, 2006 2.50:1.00
June 30, 2006 2.50:1.00
September 30, 2006 2.75:1.00
December 31, 2006 2.75:1.00
March 31, 2007 2.75:1.00
June 30, 2007 3.00:1.00
September 30, 2007 3.00:1.00
December 31, 2007 3.00:1.00
March 31, 2008 3.00:1.00
June 30, 2008 3.00:1.00
September 30, 2008 3.25:1.00
December 31, 2008 3.25:1.00
March 31, 2009 3.50:1.00
June 30, 2009 3.50:1.00
September 30, 2009 3.50:1.00
8.12 CONSOLIDATED LEVERAGE RATIO. Holdings will not permit the
Consolidated Leverage Ratio on the last day of any Test Period ending on the
last day of any fiscal quarter set forth below to be more than the ratio set
forth opposite such fiscal quarter:
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2003 5.40:1.00
June 30, 2003 5.40:1.00
September 30, 2003 5.35:1.00
December 31, 2003 5.35:1.00
March 31, 2004 5.25:1.00
June 30, 2004 5.25:1.00
September 30, 2004 5.00:1.00
December 31, 2004 5.00:1.00
March 31, 2005 4.75:1.00
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Fiscal Quarter Ending Ratio
--------------------- -----
June 30, 2005 4.75:1.00
September 30, 2005 4.50:1.00
December 31, 2005 4.50:1.00
March 31, 2006 4.25:1.00
June 30, 2006 4.25:1.00
September 30, 2006 3.75:1.00
December 31, 2006 3.75:1.00
March 31, 2007 3.50:1.00
June 30, 2007 3.50:1.00
September 30, 2007 3.25:1.00
December 31, 2007 3.25:1.00
March 31, 2008 3.00:1.00
June 30, 2008 3.00:1.00
September 30, 2008 2.75:1.00
December 31, 2008 2.75:1.00
March 31, 2009 2.50:1.00
June 30, 2009 2.50:1.00
September 30, 2009 2.25:1.00
8.13 LIMITATION ON ISSUANCE OF STOCK. (a) Holdings will not issue (i)
any preferred Equity Interests other than Qualified Preferred Stock or (ii) any
redeemable common Equity Interests other than common Equity Interests that are
redeemable at the sole option of Holdings.
(b) Holdings will not permit any of its Subsidiaries, directly or
indirectly, to issue any Equity Interests (or warrants, rights or options to
acquire Equity Interests), except (i) for replacements of then outstanding
Equity Interests, (ii) for stock splits, stock dividends and other issuances
which do not decrease the percentage ownership of the Borrower and its
Subsidiaries taken as a whole in any class of the capital stock of such
Subsidiary, (iii) for issuances to the Borrower or any of its Subsidiaries in
connection with the creation of new Subsidiaries in accordance with Section
8.07, (iv) to qualify directors to the extent required by applicable law, (v) in
the case of Foreign Subsidiaries, for nominal amounts of shares held by a third
Person to the extent required by applicable law and other de minimis issuances
of equity by Foreign Subsidiaries if deemed necessary or desirable by the
Borrower and (vi) for issuances by any Foreign Subsidiary of its Equity
Interests to other Foreign Subsidiaries.
8.14 CHANGE OF LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A
REGISTERED ORGANIZATION); JURISDICTION OF ORGANIZATION; ETC. No Credit Party
shall change its legal name, its type of organization, its jurisdiction of
organization, or its organizational identification number (if any), except that
any such changes shall be permitted (so long as same do not involve any
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Credit Party changing its jurisdiction of organization from the United States or
a State thereof to a jurisdiction of organization outside the United States or a
State thereof) if (i) the Borrower shall give to the Administrative Agent notice
promptly, and in any event within 30 days, after such change, written notice
thereof (which written notice shall set forth in reasonable detail the changes
so made), and (ii) in connection with the respective such change or changes, it
shall take all action reasonably requested by the Collateral Agent to maintain
the security interests of the Collateral Agent in the Collateral intended to be
granted hereby pursuant to the Security Documents at all times fully perfected
and in full force and effect.
8.15 NO DESIGNATION OF OTHER INDEBTEDNESS AS "DESIGNATED SENIOR
INDEBTEDNESS". The Borrower will not, and will not permit any of its
Subsidiaries to, designate any Indebtedness (other than the Obligations) of the
Borrower or any such Subsidiary as "Designated Senior Indebtedness" for the
purposes of any Subordinated Note Documents.
8.16 LIMITATIONS ON RESTRICTIONS AFFECTING SUBSIDIARIES. Holdings will
not, and will not permit any of its Subsidiaries to, create or otherwise cause
or suffer to exist (other than as a result of a requirement of law) any
encumbrance or restriction which prohibits or otherwise restricts (A) the
ability of any Subsidiary to (a) pay Dividends or make other distributions or
pay any Indebtedness owed to Holdings or any Subsidiary, (b) make loans or
advances to Holdings or any Subsidiary, (c) transfer any of its properties or
assets to Holdings or any Subsidiary or (B) the ability of Holdings or any other
Subsidiary of Holdings to create, incur, assume or suffer to exist any Lien upon
its property or assets to secure the Obligations, other than prohibitions or
restrictions existing under or by reason of: (i) this Agreement, the other
Credit Documents and the Senior Subordinated Note Documents; (ii) applicable
law, regulation or judicial order; (iii) customary non-assignment provisions
entered into in the ordinary course of business and consistent with past
practices; (iv) any restriction or encumbrance with respect to a Subsidiary
imposed pursuant to an agreement which has been entered into for the sale or
disposition of all or substantially all of the capital stock or assets of such
Subsidiary, so long as such sale or disposition is permitted under this
Agreement; (v) Liens permitted under Sections 8.03(d), (l), (m), (n) and (o) and
any documents or instruments governing the terms of any Indebtedness or other
obligations secured by any such Liens, provided that such prohibitions or
restrictions apply only to the assets subject to such Liens; (vi) provisions
(relating solely to one or more Foreign Subsidiaries) contained in agreements
related to or instruments evidencing Indebtedness incurred pursuant to Section
8.04(i) and (vii) customary provisions in joint venture agreements and similar
agreements that restrict the transfer of Equity Interests in Joint Ventures
(which are not Subsidiaries of the Borrower) subject to such agreements.
SECTION 9. EVENTS OF DEFAULT. Upon the occurrence of any of the
following specified events (each, an "Event of Default"):
9.01 PAYMENTS. The Borrower shall (i) default in the payment when due
of any principal of the Loans or any Unpaid Drawing or (ii) default, and such
default shall continue for three or more Business Days, in the payment when due
of any interest on the Loans or any Fees or any other amounts owing hereunder or
under any other Credit Document; or
9.02 REPRESENTATIONS, ETC. Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any
statement or certificate
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delivered or required to be delivered pursuant hereto or thereto shall prove to
be untrue in any material respect on the date as of which made or deemed made;
or
9.03 COVENANTS. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Sections 7.01(f)(i), 7.05 (as it relates to the corporate existence of the
Borrower), 7.09 (as it relates to Holdings or the Borrower) and 8, or (b)
default in the due performance or observance by it of any term, covenant or
agreement (other than those referred to in Section 9.01, 9.02 or clause (a) of
this Section 9.03) contained in this Agreement and such default shall continue
unremedied for a period of at least 30 days after written notice to the
defaulting party by the Administrative Agent or the Required Lenders; or
9.04 DEFAULT UNDER OTHER AGREEMENTS. (a) Holdings or any of its
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) beyond the period of grace, if any, applicable
thereto or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause any such
Indebtedness to become due prior to its stated maturity; or (b) any such
Indebtedness of Holdings or any of its Subsidiaries shall be declared to be due
and payable (or shall be required to be prepaid as a result of a default
thereunder or of an event of the type that constitutes an Event of Default)
prior to the stated maturity thereof, PROVIDED that it shall not constitute an
Event of Default pursuant to this Section 9.04 unless the aggregate principal
amount of all Indebtedness referred to in clauses (a) and (b) above exceeds
$7,500,000 in the aggregate at any one time; or
9.05 BANKRUPTCY, ETC. Holdings or any of its Subsidiaries (other than
one or more Immaterial Subsidiaries) shall commence a voluntary case concerning
itself under Title 11 of the United States Code entitled "Bankruptcy", as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an
involuntary case is commenced against Holdings or any of its Subsidiaries (other
than one or more Immaterial Subsidiaries) and the petition is not controverted
within 30 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of Holdings or any of
its Subsidiaries (other than one or more Immaterial Subsidiaries); or Holdings
or any of its Subsidiaries (other than one or more Immaterial Subsidiaries)
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to Holdings
or any of its Subsidiaries (other than one or more Immaterial Subsidiaries); or
there is commenced against Holdings or any of its Subsidiaries (other than one
or more Immaterial Subsidiaries) any such proceeding which remains undismissed
for a period of 60 days; or Holdings or any of its Subsidiaries (other than one
or more Immaterial Subsidiaries) is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or Holdings or any of its Subsidiaries (other than one or more Immaterial
Subsidiaries) suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or Holdings or any of its Subsidiaries (other
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than one or more Immaterial Subsidiaries) makes a general assignment for the
benefit of creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries (other than one or more Immaterial Subsidiaries) for the purpose of
effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
..67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, Holdings, the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate has incurred or is likely to
incur any liability to or on account of a Plan under Section 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Holdings, the Borrower or any
Subsidiary of the Borrower has incurred or is likely to incur any liability to
or on account of a Plan (other than an ERISA Affiliate Plan) under Section 409,
502(i), 502(l) or Section 401(a)(29), 4971 or 4975 of the Code or on account of
a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code, or Holdings, the
Borrower or any Subsidiary of the Borrower has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) that provide benefits to retired employees or other
former employees (other than as required by Part 6 of Title I, Subtitle B of
ERISA and Section 4880B of the Code) or Plans or Foreign Pension Plans in
addition to the liability that existed on the Initial Borrowing Date pursuant to
any such employee welfare benefit plan, Foreign Pension Plan, or Plan; (b) there
shall result from any such event or events described in subsection (a) the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) such lien, security interest or
liability, individually, and/or in the aggregate, in the reasonable opinion of
the Required Lenders, has had, or is reasonably likely to have, a Material
Adverse Effect; or
9.07 SECURITY DOCUMENTS. (a) Any Security Document shall cease to be,
in any material respect, in full force and effect, or shall cease, in any
material respect, to give the Collateral Agent the Liens (with the perfection
and priority purported to be created thereby), purported to be created thereby
in favor of the Collateral Agent, or (b) any Credit Party shall default in the
due performance or observance of any material term, covenant or agreement on its
part to be performed or observed pursuant to any such Security Document and such
default shall continue unremedied for a period of at least 30 days after written
notice to the respective Credit Party by the Administrative Agent; or
9.08 GUARANTY. Any of the Guaranties or any material provision thereof
shall cease to be in full force and effect other than pursuant to the terms
thereof, or any Guarantor or
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any Person acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under any Guaranty; or
9.09 JUDGMENTS. One or more judgments or decrees shall be entered
against Holdings or any of its Subsidiaries (other than one or more Immaterial
Subsidiaries) involving a liability (to the extent not paid or covered by
insurance) in excess of $7,500,000 in the aggregate for all such judgments and
decrees for Holdings and its Subsidiaries (other than one or more Immaterial
Subsidiaries), and all such judgments and decrees in excess of such amount shall
not have been vacated, discharged or stayed or bonded pending appeal within 60
days from the entry thereof; or
9.10 CHANGE OF CONTROL. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Lenders, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent or any Lender to enforce its claims against any Guarantor
or the Borrower (PROVIDED that, if an Event of Default specified in Section 9.05
shall occur with respect to Holdings or the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent as specified
in clauses (i) and (ii) below shall occur automatically without the giving of
any such notice): (i) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately and any
Commitment Commission shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest in
respect of all Loans and all other obligations owing hereunder (including Unpaid
Drawings) and under the other Credit Documents to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; (iii)
enforce, as Collateral Agent (or direct the Collateral Agent to enforce), any or
all of the Liens and security interests created pursuant to the Security
Documents; (iv) terminate any Letter of Credit which may be terminated in
accordance with its terms; and (v) direct the Borrower to pay (and the Borrower
hereby agrees upon receipt of such notice, or upon the occurrence of any Event
of Default specified in Section 9.05 in respect of the Borrower, it will pay) to
the Collateral Agent at the Payment Office such additional amounts of cash, to
be held as security for the Borrower's reimbursement obligations in respect of
Letters of Credit then outstanding equal to the aggregate Stated Amount of all
Letters of Credit then outstanding.
SECTION 10. DEFINITIONS AND ACCOUNTING TERMS.
10.01 DEFINED TERMS. As used herein, the following terms shall have
the meanings herein specified unless the context otherwise requires. Defined
terms in this Agreement shall include in the singular number the plural and in
the plural the singular:
"Acquired Entity or Business" shall mean either (x) the assets
constituting a business, division or product line of any Person not already a
Subsidiary of the Borrower or (y) (i) in the case of any such Person which is
incorporated or organized in the United States or any state or territory
thereof, 100% of the Equity Interests of any such Person, which Person shall, as
a result of such acquisition of Equity Interests, become a Wholly-Owned Domestic
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Subsidiary of the Borrower (or shall be merged with and into the Borrower or
another Qualified Credit Party, with the Borrower or such other Qualified Credit
Party being the surviving Person) and (ii) in the case of any such Person
organized outside of the United States or any State or territory thereof, the
Equity Interests of such Person which Person shall as a result of such
acquisition of Equity Interests become a Foreign Subsidiary of the Borrower.
"Acquisition" shall mean the acquisition by the Borrower of the
Rexnord Business pursuant to the Acquisition Agreement.
"Acquisition Agreement" shall mean the Stock Purchase Agreement, dated
as of September 27, 2002 by and among the Borrower, Invensys plc, BTR Inc., BTR
(European Holdings) BV, BTR Industries GmbH, Dunlop
Vermogensverwaltungsgesellschaft GmbH, Xxxxx Xxxxxx Inc., Invensys France SAS,
Invensys Holdings Ltd., Xxxxxx Transmissions International Ltd., Hawker Siddeley
Management Ltd., and BTR Finance BV.
"Acquisition Documents" shall mean the Acquisition Agreement and all
other material agreements and documents relating to the Acquisition, as same may
be amended, modified or supplemented from time to time pursuant to the terms
hereof and thereof.
"Additional Mortgages" shall have the meaning provided in
Section 7.10.
"Adjusted Cash Flow" for any fiscal year of Holdings shall mean
Consolidated Net Income for such fiscal year (after provision for taxes) PLUS
(without duplication) the sum of (x) the amount of all non-cash charges
(including, without limitation, depreciation, deferred tax expense, non-cash
interest expense, amortization and other non-cash charges, but excluding
non-cash charges specifically dealt with in following clauses (y) and (z)) and
losses from sales of assets (other than sales of inventory and equipment in the
normal course of business) that were deducted in arriving at Consolidated Net
Income for such fiscal year, (y) the amount, if positive, by which the tax
expense deducted in arriving at Consolidated Net Income for such fiscal year
(excluding the tax effects of gains and losses on sales of assets (other than
sales of inventory and equipment in the normal course of business)) exceeds the
actual taxes paid in respect of such fiscal year (excluding amounts attributable
to gains or losses on sales of assets (other than sales of inventory and
equipment in the normal course of business)) and (z) the amount, if positive, by
which the expense for pension and post-retirement obligations deducted in
arriving at Consolidated Net Income for such fiscal year exceeds the cash
payments made during such fiscal year in respect of pension and post-retirement
funding obligations, MINUS (without duplication) the sum of (w) the amount of
all non-cash gains (but excluding non-cash gains specifically dealt with below)
and gains from sales of assets (other than sales of inventory and equipment in
the normal course of business) that were added in arriving at Consolidated Net
Income for such fiscal year, (x) the actual cash payments made in such fiscal
year in respect of non-cash charges taken in determining Consolidated Net Income
for previous fiscal years, (y) the amount, if positive, by which the actual
taxes paid in respect of such fiscal year (excluding taxes payable on gains from
sales of assets (other than sales of inventory and equipment in the normal
course of business)) exceeds the tax expense (excluding the portion thereof
attributable to gains or losses on sales of assets (other than sales of
inventory and equipment in the normal course of business)) deducted in arriving
at Consolidated Net Income for such fiscal year and (z) the amount, if positive,
by which the cash payments made during such fiscal year in respect of pension
and
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post-retirement funding obligations exceeds the expense for pension and
post-retirement obligations deducted in determining Consolidated Net Income for
such fiscal year.
"Adjusted Consolidated Working Capital" shall mean, at any time,
Consolidated Current Assets (but excluding therefrom all cash, Cash Equivalents
and Foreign Cash Equivalents) less Consolidated Current Liabilities at such
time.
"Adjusted RF Percentage" shall mean (x) at a time when no Lender
Default exists, for each Lender, such Lender's RF Percentage and (y) at a time
when a Lender Default exists (i) for each Lender that is a Defaulting Lender,
zero and (ii) for each Lender that is a Non-Defaulting Lender, the percentage
determined by dividing such Lender's Revolving Commitment at such time by the
Adjusted Total Revolving Commitment at such time, it being understood that all
references herein to Revolving Commitments and the Adjusted Total Revolving
Commitment at a time when the Total Revolving Commitment has been terminated
shall be references to the Revolving Commitments or Adjusted Total Revolving
Commitment, as the case may be, in effect immediately prior to such termination,
PROVIDED that (A) no Lender's Adjusted RF Percentage shall change upon the
occurrence of a Lender Default from that in effect immediately prior to such
Lender Default if after giving effect to such Lender Default, and any repayment
of Revolving Loans and Swingline Loans at such time pursuant to Section
4.02(A)(a) or otherwise, the sum of (i) the aggregate outstanding principal
amount of Revolving Loans of all Non-Defaulting Lenders, plus (ii) the aggregate
outstanding principal amount of all Swingline Loans, plus (iii) the aggregate
amount of Letter of Credit Outstandings, exceeds the Adjusted Total Revolving
Commitment; (B) the changes to the Adjusted RF Percentage that would have become
effective upon the occurrence of a Lender Default but that did not become
effective as a result of the preceding clause (A) shall become effective on the
first date after the occurrence of the relevant Lender Default on which the sum
of (i) the aggregate outstanding principal amount of the Revolving Loans of all
Non-Defaulting Lenders, plus (ii) the aggregate outstanding principal amount of
all Swingline Loans, plus (iii) the aggregate amount of Letter of Credit
Outstandings is equal to or less than the Adjusted Total Revolving Commitment;
and (C) if (i) a Non-Defaulting Lender's Adjusted RF Percentage is changed
pursuant to the preceding clause (B) and (ii) any repayment of such Lender's
Revolving Loans, Swingline Loans or Unpaid Drawings that were made during the
period commencing after the date of the relevant Lender Default and ending on
the date of such change to its Adjusted RF Percentage must be returned to the
Borrower as a preferential or similar payment in any bankruptcy or similar
proceeding of the Borrower, then the change to such Non-Defaulting Lender's
Adjusted RF Percentage effected pursuant to said clause (B) shall be reduced to
that positive change, if any, as would have been made to its Adjusted RF
Percentage if (x) such repayments had not been made and (y) the maximum change
to its Adjusted RF Percentage would have resulted in the sum of the outstanding
principal of Revolving Loans made by such Lender plus such Lender's new Adjusted
RF Percentage of the outstanding principal amount of Swingline Loans and of
Letter of Credit Outstandings equaling such Lender's Revolving Commitment at
such time.
"Adjusted Total Revolving Commitment" shall mean at any time the Total
Revolving Commitment less the aggregate Revolving Commitments of all Defaulting
Lenders.
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"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Agent" shall mean each of the Administrative Agent, the Collateral
Agent, each Co-Documentation Agent and each Joint Lead Arranger.
"Aggregate Consideration" shall mean, with respect to any Permitted
Acquisition, the aggregate consideration paid and reasonably expected to be paid
in connection therewith as determined at the time of the consummation thereof,
including, without limitation (without duplication), (i) the aggregate amount of
all cash, Cash Equivalents and Foreign Cash Equivalents paid or payable in
connection therewith, (ii) the aggregate principal amount of all Indebtedness
assumed, refinanced, incurred or issued in connection therewith, (iii) the
aggregate amount paid and reasonably expected to be paid (based on the
Borrower's good faith estimates of such payments) pursuant to any earn-out,
non-compete agreement, consulting arrangement, purchase price adjustments,
deferred purchase price and/or similar arrangements, and (iv) the aggregate fair
market value of any other consideration (as reasonably determined by the
Borrower); provided that the Aggregate Consideration for any Permitted
Acquisition shall exclude all consideration in the form of common stock of
Holdings or Qualified Preferred Stock, as well as all cash proceeds contributed
to the Borrower or the respective Subsidiary from a substantially
contemporaneous issuance by Holdings of its common stock or Qualified Preferred
Stock.
"Agreement" shall mean this
Credit Agreement, as the same may be from
time to time further modified, amended, restated (including any amendment and
restatement hereof) or supplemented.
"Alternate Currency" shall mean, with respect to any Letter of Credit,
Canadian Dollars, Pounds Sterling and Euros and any other currency other than
Dollars as may be acceptable to the Administrative Agent and the Issuing Lender
with respect thereto in their sole discretion.
"Anticipated Reinvestment Amount" shall mean, with respect to any
Reinvestment Election, the amount specified in the Reinvestment Notice delivered
by the Borrower in connection therewith as the amount of the Net Cash Proceeds
from the related Asset Sale that the Borrower intends to use to purchase,
construct or otherwise acquire Reinvestment Assets.
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"Applicable Margin" for any day during the respective period means (x)
with respect to Term Loans maintained as (i) Eurodollar Loans, 4.00% and (ii)
Base Rate Loans, 2.75% and (y) with respect to Revolving Loans and Swingline
Loans, the respective percentage per annum set forth below under the appropriate
column, opposite the respective Level (i.e., Xxxxx 0, Xxxxx 0 or Level 3, as the
case may be) of the Consolidated Leverage Ratio indicated to have been achieved
in the respective officer's certificate delivered as required below:
Revolving Loans
Revolving Loans maintained as Base
Consolidated maintained as Rate Loans and
Level Leverage Ratio Eurodollar Loans Swingline Loans
--------------------------------------------------------------------------------
3 Greater than or 3.50% 2.25%
equal to 4.00:1.00
--------------------------------------------------------------------------------
2 Greater than or 3.25% 2.00%
equal to 3.00:1.00
but less than
4.00:1.00
--------------------------------------------------------------------------------
1 Less than 3.00:1.00 3.00% 1.75%
--------------------------------------------------------------------------------
, with the Consolidated Leverage Ratio to be determined based on the delivery of
a certificate of Holdings by the chief financial officer or controller of
Holdings to the Administrative Agent (who shall make same available to each RF
Lender), within 45 days of the last day of any fiscal quarter of Holdings (or 90
days in the case of the fiscal year end of Holdings) (the date of each such
delivery, the "Start Date"), which certificate shall set forth the calculation
of the Consolidated Leverage Ratio as at the last day of the Test Period ended
immediately prior to the relevant Start Date (or, if any Significant Acquisition
or Significant Asset Sale has occurred after the last day of such Test Period
and prior to the respective Start Date, with the Consolidated Leverage Ratio to
be calculated on a Post-Test Period PRO FORMA Basis as at the date the last such
Significant Acquisition or Significant Asset Sale was affected, after giving
effect thereto) and the Applicable Margins which shall be thereafter applicable
(until same are changed or cease to apply in accordance with this definition)
shall be based upon the Consolidated Leverage Ratio as so calculated; PROVIDED
that at the time of the consummation of any Significant Acquisition and any
Significant Asset Sale, the chief financial officer or controller of Holdings
shall deliver to the Administrative Agent a certificate setting forth the
calculation of the Consolidated Leverage Ratio on a Post-Test Period Pro FORMA
Basis (with Consolidated Debt to be determined on the date of the consummation
of the respective such Significant Acquisition or Significant Asset Sale, and
after giving effect thereto, and with Consolidated EBITDA to be calculated for
the Test Period most recently ended prior to the date on which such Significant
Acquisition or such Significant Asset Sale, as the case may be, is consummated
for which financial statements have been made available (or were required to be
made available) pursuant to Section 7.01(a) or (b), as the case may be), and the
date of such consummation shall be deemed to be a Start Date and the Applicable
Margins which shall be thereafter applicable (until same are changed or cease to
apply in accordance with this definition) shall be based upon the Leverage Ratio
as so calculated. The Applicable Margins so determined shall apply, except as
set forth in the succeeding sentence, from the relevant Start Date to the
earliest of (x) the date on which the next certificate is delivered to the
Administrative Agent, (y) the date on which the next Significant Acquisition or
the next Significant Asset Sale, as the case may be, is consummated
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and (z) the date which is 45 (or, in the case of a fiscal year end, 90) days
following the last day of the Test Period in which the previous Start Date
occurred (such earliest date, the "End Date"), at which time, if no certificate
has been delivered to the Administrative Agent indicating an entitlement to new
Applicable Margins (and thus commencing a new Start Date), the Applicable
Margins pursuant to clause (y) of the preceding sentence shall be those set
forth in the table above determined as if the Consolidated Leverage Ratio were
greater than 4.00:1.00. Notwithstanding anything to the contrary contained above
in this definition, the Applicable Margins with respect to Revolving Loans and
Swingline Loans shall be (x) at all times prior to the date of delivery of the
financial statements pursuant to Section 7.01(b) for the fiscal quarter ending
closest to June 30, 2003 and (y) at any time a Default or Event of Default
exists, (i) 3.50% in the case of Revolving Loans maintained as Eurodollar Loans
and (ii) 2.25% in the case of Revolving Loans maintained as Base Rate Loans or
Swingline Loans.
"Approved Bank" shall have the meaning provided in the definition of
Cash Equivalents.
"Asset Sale" shall mean and include (x) the sale, transfer or other
disposition by Holdings or any Subsidiary to any Person other than Holdings or a
Wholly-Owned Subsidiary of Holdings of any asset of the Borrower or such
Subsidiary (other than sales, transfers or other dispositions of inventory
and/or obsolete equipment, in each case in the ordinary course of business), (y)
the sale or issuance by the Borrower or any of its Subsidiaries of any Equity
Interests to any Person (other than Holdings or a Wholly-Owned Subsidiary of
Holdings) and/or (z) the receipt by Holdings or any Subsidiary of any insurance,
condemnation or similar proceeds in connection with a casualty or taking of any
of its assets but in the case of clauses (x) and (z) above, only to the extent
that the Net Cash Proceeds of any such sale, transfer or disposition (or series
of such sales, transfers or dispositions) or any such receipt of insurance,
condemnation or similar proceeds is, in either case, in excess of $1,000,000.
"Assignment Agreement" shall mean the Assignment Agreement in the form
of Exhibit M (appropriately completed).
"Attributable Debt" in respect of a Sale/Leaseback Transaction shall
mean, as at the time of determination, the present value (discounted at the
interest rate borne at such time by Revolving Loans maintained as Eurodollar
Loans, compounded annually) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has been extended);
provided, however, that if such Sale/Leaseback Transaction results in a
Capitalized Lease Obligation, the amount of Indebtedness represented thereby
shall be determined in accordance with the definition of Capitalized Lease
Obligations.
"Authorized Officer" shall mean any senior officer of Holdings or the
Borrower designated as such in writing to the Administrative Agent by Holdings
or by the Borrower.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" at any time shall mean the higher of (i) the rate which is
1/2 of 1% in excess of the Federal Funds Effective Rate and (ii) the Prime
Lending Rate.
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"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the incurrence of (i) Swingline Loans by the
Borrower from the Swingline Lender on a given date or (ii) one Type of Loan
pursuant to a single Facility by the Borrower from the Lenders having
Commitments with respect to such Facility on a PRO RATA basis on a given date
(or resulting from conversions on a given date), having in the case of
Eurodollar Loans the same Interest Period; PROVIDED that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of any related
Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in Dollar deposits in the interbank Eurodollar market.
"Capital Lease" as applied to any Person shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Carlyle" shall mean TC Group L.L.C. (which operates under the trade
name "The Carlyle Group"), a Delaware limited liability company.
"Carlyle Affiliate" shall mean any entity controlled directly or
indirectly by Carlyle.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) Dollar denominated time
deposits, certificates of deposit and bankers' acceptances of (x) any Lender
that is a domestic commercial bank of recognized standing having capital and
surplus in excess of $500,000,000 or (y) any bank (or the parent company of such
bank) whose short-term commercial paper rating from Standard & Poor's Ratings
Services, a division of XxXxxx-Xxxx, Inc. ("S&P") is at least A-1 or the
equivalent thereof or from Xxxxx'x Investors Service, Inc. ("Xxxxx'x") is at
least P-1 or the equivalent thereof (any such bank, an "Approved Bank"), in each
case with maturities of not more than one year from the date of acquisition,
(iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in
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clause (ii) above, (iv) commercial paper issued by any Approved Bank or by the
parent company of any Approved Bank and commercial paper issued by, or
guaranteed by, any industrial or financial company with a short-term commercial
paper rating of at least A-1 or the equivalent thereof by S&P or at least P-1 or
the equivalent thereof by Moody's, or guaranteed by any industrial company with
a long term unsecured debt rating of at least A or A2, or the equivalent of each
thereof, from S&P or Moody's, as the case may be, and in each case maturing
within six months after the date of acquisition, (v) marketable direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either S&P or
Moody's and (vi) investments in money market funds substantially all of whose
assets are comprised of securities of the type described in clauses (i) through
(v) above.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by Holdings and/or any Subsidiary from such Asset
Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq.
"Change of Control" shall mean, at any time and for any reason
whatsoever, (a) Holdings shall fail to own directly, or indirectly through
Intermediate Holdco, 100% on a fully diluted basis of either the economic or
voting interest in the Borrower's Equity Interests or (b) Carlyle and Carlyle
Affiliates shall fail to have beneficial ownership (within the meaning of Rule
13d-3 of the Exchange Act) in the aggregate of (i) prior to any Qualified Public
Offering, at least 51% of Holdings' Equity Interests having normal voting power
in the election of directors or (ii) on and after a Qualified Public Offering,
at least 30% (or such higher percentage that exceeds the highest percentage of
Holdings' Equity Interests having normal voting power in the election of
directors owned by any other person or group (as defined in Section 13(d) of the
Exchange Act)) of Holdings' Equity Interests having normal voting power in the
election of directors or (c) after a Qualified Public Offering has occurred, the
Board of Directors of Holdings shall cease to consist of a majority of
Continuing Directors or (d) a "change of control" or similar event shall occur
as provided in the Senior Subordinated Note Documents.
"Co-Documentation Agent" shall mean each of Wachovia and GECC in their
capacity as such hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each of
the Security Documents.
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"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Lenders.
"Commitment" shall mean, with respect to each Lender, such Lender's
Term Commitment and Revolving Commitment.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Common Equity Financing" shall have the meaning provided the
Section 5.01(e).
"Company" shall mean any corporation, limited liability company,
partnership or other business entity (or the adjectival form thereof, where
appropriate).
"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures (including in all events all amounts expended
under Capital Leases but excluding any amount representing capitalized interest)
by the Borrower and its Subsidiaries during that period that, in conformity with
GAAP, are or are required to be included in the property, plant or equipment
reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries, PROVIDED that Consolidated Capital Expenditures shall in any event
(x) exclude the purchase price paid in connection with the acquisition of any
Person (including through the purchase of all of the Equity Interests of such
Person or through merger or consolidation) to the extent allocable to property,
plant and equipment and (y) exclude amounts expended to acquire Reinvestment
Assets.
"Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of Holdings and its Subsidiaries at such time.
"Consolidated Current Liabilities" shall mean, at any time, the
consolidated current liabilities of Holdings and its Subsidiaries at such time,
but excluding the current portion of any Indebtedness under this Agreement and
the current portion of any other long term Indebtedness which would otherwise be
included therein.
"Consolidated Debt" shall mean, as of any date of determination, (i)
the aggregate principal amount of all indebtedness for borrowed money and
Capitalized Lease Obligations of Holdings and its Subsidiaries on a consolidated
basis as determined in accordance with GAAP plus (ii) any principal amount of
indebtedness for borrowed money or Capitalized Lease Obligations of any other
Person as to which Holdings and/or any of its Subsidiaries has created a
guarantee or other Contingent Obligation (but only to the extent of such
guarantee or other Contingent Obligation).
"Consolidated EBITDA" shall mean, for any period, Consolidated Net
Income (excluding gains or losses from sales of assets (other than sales of
inventory and equipment in a normal course of business)) for such period,
adjusted by adding thereto (A) the sum of the amounts (in each case without
duplication) for such period (in each case, only to the extent same reduced
Consolidated Net Income for such period) of (i) provisions for taxes based on
income (excluding taxes attributable to gains and losses on sales of assets
(other than sales of inventory and equipment in the normal course of business)),
(ii) Consolidated Interest Expense,
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(iii) depreciation expense, (iv) amortization expense, (v) other non-cash
charges, (vi) amortization or write-off of deferred financing costs, (vii)
extraordinary losses and one-time charges (including restructuring charges),
(viii) write-off of amortization related to write-up of assets due to purchase
accounting, (ix) fees and expenses incurred in connection with the Documents or
the Transaction, and (x) up-front management fees payable at the time of the
closing of the Transaction pursuant to the Management Agreement, plus additional
management fees payable pursuant to the Management Agreement in any fiscal year
not to exceed $2,000,000, minus (B) the aggregate amount of cash payments made
during such period in respect of non-cash charges from prior periods or in
respect of extraordinary losses and one-time charges (including restructuring
charges) whether such losses or one-time charges were taken in such period or a
prior period; PROVIDED that (subject to adjustments which may be required to be
made for Significant Acquisitions and Significant Asset Sales occurring after
the Effective Date, in the case of determinations of Consolidated EBITDA being
made on a PRO FORMA Basis or a Post-Test Period PRO FORMA Basis), Consolidated
EBITDA for Holdings' fiscal quarters ended June 30, 2002, September 30, 2002 and
December 31, 2002 shall be deemed to be $26,700,000, $31,600,000 and
$26,600,000, respectively. Notwithstanding anything to the contrary contained
above, Consolidated EBITDA for the Test Periods ended March 31, 2003, June 30,
2003, September 30, 2003 and December 31, 2003 shall be increased (without
duplication) by $4 million, $3 million, $2 million and $1 million, respectively,
thereby giving Holdings credit for anticipated cost savings (following the
consummation of the Acquisition) which may not be fully realized during the
respective Test Period described above in this sentence.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including the portion that is attributable to Capital Leases
in accordance with GAAP) of Holdings and its Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of Holdings and its
Subsidiaries (including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and without duplication net costs and/or net benefits under
Interest Rate Protection Agreements, but excluding, however, amortization of
deferred financing costs to the extent included in total interest expense), less
interest income of Holdings and its Subsidiaries on a consolidated basis for
such period; PROVIDED that (subject to adjustments which may be required to be
made for Significant Acquisitions and Significant Asset Sales occurring after
the Effective Date, in the case of determinations of Consolidated Interest
Expense being made on a Post-Test Period PRO FORMA Basis), Consolidated Interest
Expense for each of Holdings' fiscal quarters ended June 30, 2002, September 30,
2002, and December 31, 2002 shall be deemed to be to be $11,100,000.
"Consolidated Leverage Ratio" shall mean, at any date of
determination, the ratio of (i) Consolidated Debt on such date to (ii)
Consolidated EBITDA for the Test Period then most recently ended; PROVIDED that
(x) in the case of any determination of the Consolidated Leverage Ratio being
made on the last day of a Test Period, Consolidated Debt shall be determined
based on the actual amount of Consolidated Debt outstanding on the last day of
the respective Test Period in accordance with the provisions of Section 10.02
and Consolidated EBITDA shall be determined on a PRO FORMA Basis (in accordance
with Section 10.02) to give effect to all Significant Acquisitions and
Significant Asset Sales (in each case, if any) made after the
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Effective Date and during the respective Test Period and (y) in the case of any
determination of Consolidated Leverage Ratio being made on (or as at) any date
other than the last date of a Test Period, Consolidated Debt shall be calculated
as the actual amount outstanding on the date of determination in accordance with
the provisions of Section 10.02 and Consolidated EBITDA shall be determined on a
Post-Test Period PRO FORMA Basis to give effect to all Significant Acquisitions
and Significant Asset Sales (in each case, if any) actually made after the
Effective Date and during the respective Test Period or thereafter and on or
prior to the date of the required determination thereof (in the case of any
determinations pursuant to Section 7.12 and the definition of Applicable Margin,
after giving effect to the respective events which require the determination to
be made on a Post-Test Period PRO FORMA Basis).
"Consolidated Net Income" shall mean for any period, the net income
(or loss) of Holdings and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
PROVIDED that (i) the net income of any Person which is not a Subsidiary of
Holdings or is accounted for by Holdings by the equity method of accounting
shall be included only to the extent of the payment of cash dividends or other
cash distributions by such other Person to Holdings or any of its Subsidiaries
during such period, (ii) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary of Holdings or is merged into or consolidated with
Holdings or any of its Subsidiaries or that Person's assets are acquired by
Holdings or any of its Subsidiaries shall be excluded and (iii) to the extent
that Consolidated Net Income reflects amounts attributable to minority interests
in Subsidiaries, Consolidated Net Income shall be reduced by the amounts
attributable to such minority interests.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intending to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) 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 (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof, PROVIDED, HOWEVER, that
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated
maximum of the Contingent Obligation or, if none, the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if there is no stated or determinable amount of the primary
obligation, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Continuing Directors" shall mean the directors of Holdings on the
date of consummation of the first Qualified Public Offering to occur after the
Initial Borrowing Date,
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and each other director if such director's nomination for the election to the
Board of Directors of Holdings is recommended by a majority of the then
Continuing Directors.
"Credit Documents" shall mean this Agreement, the Notes, the Security
Documents, the Subsidiaries Guaranty, each Joinder Agreement (after the
execution and delivery thereof) and any related documents executed in connection
therewith.
"Credit Event" shall mean and include the making of a Loan or the
issuance of a Letter of Credit.
"Credit Party" shall mean Holdings, the Borrower and the Subsidiary
Guarantors.
"CSFB Cayman" shall mean Credit Suisse First Boston, acting through
its Cayman Island Branch, in its individual capacity.
"DB Cayman" shall mean Deutsche Bank AG, Cayman Island Branch, in its
individual capacity.
"DBSI" shall mean Deutsche Bank Securities Inc., in its individual
capacity.
"DBTCA" shall mean Deutsche Bank Trust Company Americas, in its
individual capacity.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
"Dividends" shall have the meaning provided in Section 8.09.
"Documents" shall mean, collectively, the Credit Documents and the
Transaction Documents.
"Dollar Equivalent" of an amount denominated in an Alternate Currency
shall mean, at any time for the determination thereof, the amount of Dollars
which could be purchased with the amount of the Alternate Currency involved in
such computation at the spot exchange rate therefor as quoted by the
Administrative Agent as of 11:00 a.m. (New York time) on the date two Business
Days prior to the date of any determination thereof for purchase on such date,
PROVIDED that the Dollar Equivalent of any unpaid drawing under a Letter of
Credit expressed in an Alternate Currency shall be determined at the time the
drawing under the related Letter of Credit was paid or disbursed by the
respective Letter of Credit Issuer, PROVIDED FURTHER, that for purposes of (x)
determining compliance with Sections 1.01(b), 1.01(c), 2.01(b) and 4.02(A)(a)(i)
and (y) calculating fees pursuant to Sections 3.01(b) and (c), the Dollar
Equivalent of any amounts denominated in an Alternate Currency shall be revalued
on a monthly basis using the spot exchange rates therefor as shown in The Wall
Street Journal (or, if same does not provide such exchange rates, on such other
basis as is reasonably satisfactory to the Administrative Agent) on the last
Business Day of each calendar month.
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"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower that
is not a Foreign Subsidiary.
"Effective Date" shall have the meaning provided in Section 12.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other Person in the business of purchasing or investing
in extensions of credit of the types made pursuant to this Agreement, or any
other institutional "accredited investor" (as defined in Regulation D of the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder), but in any event excluding Holdings and its Subsidiaries.
"End Date" shall have the meaning provided in the definition of
Applicable Margin.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by Holdings or any of its Subsidiaries solely in the ordinary course of such
Person's business and not in response to any third party action or request of
any kind) or proceedings relating in any way to any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment.
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code and rule of common law now
or hereafter in effect and in each case as amended, and any binding judicial or
administrative interpretation thereof, including any binding judicial or
administrative order, consent decree or judgment, relating to the environment or
Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. Section 7401 et seq.; the Clean Air Act,
42 U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section
3808 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; and
any applicable state and local or foreign counterparts or equivalents.
"EP Percentage" shall mean in the case of (i) (x) equity issued to, or
equity contributions made by, the Initial Investors, Affiliates thereof and
management and (y) equity issued to, or equity contributions made by, any other
Person the proceeds of which are utilized within 180 days of the respective
issuance or contribution solely to finance Permitted Acquisitions, Consolidated
Capital Expenditures or investments in Joint Ventures or Foreign Subsidiaries,
in each case permitted hereunder, 0%, (it being understood and agreed that in
any case where this clause (y) is applicable, to the extent the respective
proceeds are not actually
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utilized as described above (or returned to the respective Person to whom such
equity was issued or who made such equity contribution as provided in Section
8.09(ix)) within 180 days of the respective issuance or contribution, then on
such 180th day the EP Percentage which would originally have been applicable if
preceding clause (y) did not apply shall be deemed applicable, and such
respective proceeds (to the extent not actually applied as described above)
shall be required on such date to be applied pursuant to the provisions of
Section 4.02(A)(e)) and (ii) all other equity issuances and equity contributions
not described in preceding clause (i), 50%, PROVIDED that (A) if at any time the
Consolidated Leverage Ratio (as established on the last day of the respective
fiscal quarter or year of Holdings pursuant to the officer's certificate last
delivered (or required to be delivered) pursuant to Section 7.01(a) or (b) but
after giving effect to repayments of Loans (but in the case of repayments of
Revolving Loans only to the extent the Total Revolving Commitment was
contemporaneously reduced) made after the last day of such fiscal quarter or
year and prior to the respective application of cash proceeds pursuant to the
provisions of Section 4.02(A)(e)) is equal to or less than 3.00:1.00, then the
EP Percentage for purposes of this clause (ii) shall instead be 0%, PROVIDED
FURTHER, that (i) if the EP Percentage would otherwise be 50% but after giving
effect the respective application of cash proceeds pursuant to Section
4.02(A)(e) in a percentage less than 50%, the Consolidated Leverage Ratio would
be equal to or less than 3.00:1.00, the EP Percentage for the purposes of this
clause (ii) shall instead be such percentage above 0% and below 50% as may be
necessary to reduce the Consolidated Leverage Ratio to 3.00:1.00 after giving
effect to such application and (B) notwithstanding anything to the contrary
contained above, at any time that a Default or an Event of Default is then in
existence, the EP Percentage for the purposes of this clause (ii) shall be 50%.
"Equity Interests" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, any limited or general partnership interest and any limited liability
company membership interest.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings, the Borrower or a Subsidiary of the
Borrower would be deemed to be a "single employer" (i) within the meaning of
Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of Holdings or a
Subsidiary of Holdings being or having been a general partner of such person.
"ERISA Affiliate Plan" shall mean (i) any pension plan as defined in
Section 3(2) of ERISA (other than a Foreign Pension Plan), which is maintained
or contributed to by (or which there is an obligation to contribute of) an ERISA
Affiliate (other than Holdings, the Borrower or any Subsidiary thereof), after
giving effect to the Transaction, and (ii) each such plan for the five year
period immediately following the latest date on which an ERISA Affiliate (other
than Holdings, the Borrower or any Subsidiary thereof), maintained, contributed
to or had
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an obligation to contribute to such plan and with respect to which Holdings, the
Borrower or a Subsidiary thereof may incur any liability (including any
indirect, contingent or secondary liability).
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period for
a Eurodollar Loan, (i) the offered quotation to first-class banks in the
interbank Eurodollar market by the Administrative Agent for dollar deposits of
amounts in same day funds comparable to the principal amount of the applicable
Eurodollar Loan of the Administrative Agent, in its capacity as a Lender (or, if
the Administrative Agent is not a Lender under the respective Facility, the
principal amount of the Eurodollar Loan then being made by the Lender with the
largest commitment at such time under the respective Facility), for which the
interest rate is then being determined with maturities comparable to the
Interest Period to be applicable to such Eurodollar Loans, determined as of
10:00 A.M. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period divided (and rounded upward to the next
whole multiple of 1/100 of 1%) by (ii) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation D).
"Event of Default" shall have the meaning provided in Section 9.
"Excess Cash Flow" shall mean, for any period, the remainder of (i)
Adjusted Cash Flow for such period, PLUS (ii) to the extent not included in (i)
above, any amounts received by Holdings and its Subsidiaries in settlement of,
or in payment of any judgments resulting from, actions, suits or proceedings
with respect to Holdings and/or its Subsidiaries from the first day to the last
day of such period, PLUS (iii) the amount of the decrease (if any) in Adjusted
Consolidated Working Capital from the first day of the respective period to the
last day of the respective period, MINUS (iv) the sum of (A) the amount of
Consolidated Capital Expenditures made in compliance with Section 8.05 during
such period (less any amount thereof financed through the incurrence of
Indebtedness or equity issuances or contributions), (B) the aggregate amount of
permanent principal payments of Indebtedness for borrowed money of Holdings and
its Subsidiaries and the repayment of the principal component of Capitalized
Lease Obligations of Holdings and its Subsidiaries (excluding without
duplication (1) payments with proceeds of incurrences of Indebtedness, equity
issuances or contributions, asset sales or with casualty or condemnation
proceeds, (2) payments to Holdings or any Subsidiary thereof, (3) payments of
Indebtedness outstanding pursuant to Section 8.04(i) or (r)), (4) payments of
Loans or other Obligations pursuant to Sections 4.02(A)(c) through (g) and (5)
any repayment of Revolving Loans or Swingline Loans which is not accompanied by
permanent reduction to the Total Revolving Commitment in a like amount) during
such period, (C) to the extent not already deducted in determining Excess Cash
Flow, purchase price adjustments paid by Holdings and/or its Subsidiaries during
the respective period in connection with the Acquisition, (D) to the extent not
already deducted in determining Excess Cash Flow, in the case of the period
ending March 31, 2004 only, fees and expenses incurred in connection with the
Transaction and the Documents
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during such period, provided that no more than $1,000,000 shall be deducted
pursuant to this clause (D), (E) the net amount of investments, loans and
advances made pursuant to clauses (c)(i), (q) (other than in respect of Joint
Ventures that are Subsidiaries) and (r) (other than in Subsidiaries) of Section
8.06 during such period (after giving effect to any return on any investments,
loans or advances made pursuant to said clauses of Section 8.06), (F) to the
extent not already deducted in determining Excess Cash Flow, cash expenditures
made in connection with Permitted Acquisitions (except to the extent financed
with proceeds of Indebtedness or equity contributions or issuances), (G) to the
extent not already deducted in determining Adjusted Cash Flow, amounts paid by
Holdings and its Subsidiaries in settlement of, or in payment of any judgments,
actions, suits or proceedings with respect to Holdings and/or its Subsidiaries
from the first date to the last date of such period and (H) any increase in
Adjusted Consolidated Working Capital from the first day of such period to the
last day of such period.
"Excess Cash Payment Date" shall mean the date occurring 90 days after
the last day of each fiscal year of Holdings (beginning with its fiscal year
ending on March 31, 2004).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Existing Indebtedness" shall have the meaning provided in
Section 5.01(o).
"Expiration Date" shall mean February 15, 2003.
"Facility" shall mean any of the credit facilities established under
this Agreement, i.e., the Term Facility or the Revolving Facility.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 3.01.
"Foreign Asset Sale" shall mean an Asset Sale by a Foreign Subsidiary
of the Borrower.
"Foreign Cash Equivalents" shall mean (i) certificates of deposit or
bankers acceptances of, and bank deposits with, any bank organized under the
laws of any country that is a member of the European Economic Community, whose
short-term commercial paper rating from S&P is at least A-1 or the equivalent
thereof or from Xxxxx'x is at least P-1 or the equivalent thereof, in each case
with maturities of not more than six months from the date of acquisition, (ii)
commercial paper maturing not more than one year from the date of creation
thereof and, at the time of acquisition, having the highest rating obtainable
from either S&P's or
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Moody's and (iii) shares of any money market mutual fund that (a) has its assets
invested continuously in the types of investments referred to in clauses (i) and
(ii) above, (b) has net assets not less than $500,000,000 and (c) has the
highest rating obtainable from either S&P's or Moody's.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by Holdings, the Borrower or any
one or more of its Subsidiaries, after giving effect to the Transaction,
primarily for the benefit of employees of the Borrower or such Subsidiaries
residing outside the United States of America, which plan, fund or other similar
program provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower which
is not incorporated or organized in the United States or any State or territory
thereof.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date of this Agreement; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 8, including defined terms as used therein, are subject (to the
extent provided therein) to Section 12.07(a).
"GECC" shall mean General Electric Capital Corporation, in its
individual capacity.
"Guaranteed Creditors" shall mean and include each of the
Administrative Agent, the Collateral Agent, the Joint Lead Arrangers, each
Letter of Credit Issuer, the Lenders and each party (other than any Credit
Party) party to an Interest Rate Protection Agreement or Other Hedging Agreement
to the extent such party constitutes a Secured Creditor under the Security
Documents.
"Guaranteed Obligations" shall mean (i) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each Note issued by, and all Loans made to, the
Borrower under this Agreement and all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit, together with all the other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due), indebtedness and
liabilities (including, without limitation, indemnities, fees and interest
(including any interest accruing after the commencement of any bankruptcy,
insolvency, receivership or similar proceeding at the rate provided for herein,
whether or not such interest is an allowed claim in any such proceeding)
thereon) of the Borrower to the Lenders, each Letter of Credit Issuer, the
Administrative Agent and the Collateral Agent now existing or hereafter incurred
under, arising out of or in connection with this Agreement and each other Credit
Document to which the Borrower is a party and the due performance and compliance
by the Borrower with all the terms, conditions and agreements contained in the
Credit Agreement and in each such other Credit Document and (ii) the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the
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Bankruptcy Code, would become due), liabilities and indebtedness (including any
interest accruing after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding at the rate provided for herein, whether or
not such interest is an allowed claim in any such proceeding) of the Borrower
owing under any Interest Rate Protection Agreement or Other Hedging Agreement
(unless it is expressly provided in the respective Interest Rate Protection
Agreement or Other Hedging Agreement that the liabilities and Indebtedness
thereunder are not "Guaranteed Obligations" for the purposes of the Credit
Documents) entered into by the Borrower with any Lender or any affiliate thereof
(even if such Lender subsequently ceases to be a Lender under this Agreement for
any reason) so long as such Lender or affiliate participates in such Interest
Rate Protection Agreement or Other Hedging Agreement and their subsequent
assigns, if any, whether now in existence or hereafter arising, and the due
performance and compliance with all terms, conditions and agreements contained
therein.
"Guaranties" shall mean and include each of the Holdings Guaranty and
the Subsidiaries Guaranty.
"Guarantor" shall mean Holdings and each Subsidiary Guarantor.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contains
electric fluid containing levels of polychlorinated biphenyls, and radon gas and
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," "toxic substances,"
"toxic pollutants," "contaminants," or "pollutants," or words of similar import,
under any applicable Environmental Law.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Guaranty" shall mean the guaranty of Holdings pursuant to
Section 13.
"Immaterial Subsidiary" shall mean any Subsidiary of Holdings (other
than the Borrower) which individually has aggregate assets of not greater than
$25,000,000 and which, if aggregated with all other Subsidiaries of Holding with
respect to which an event described in Section 9.05 or 9.09 has occurred and is
continuing, would have assets of not greater than $25,000,000.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services (excluding pension and post-retirement liabilities and
other deferred compensation arrangements for employees generally, in each case
entered into in the ordinary course of business) which in accordance with GAAP
would be shown on the liability side of the balance sheet of such Person, (iii)
the maximum amount available to be drawn under all letters of credit, bankers'
acceptances and similar obligations issued for the account of such Person and
all unpaid drawings or unreimbursed payments in respect of such letters of
credit, bankers' acceptances and similar obligations, (iv) all Indebtedness of
the types described in clause (i), (ii), (iii), (v), (vi), (vii) or
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(viii) of this definition secured by any Lien on any property owned by such
Person, whether or not such Indebtedness has been assumed by such Person
(PROVIDED that, if the Person has not assumed or otherwise become liable in
respect of such Indebtedness, such Indebtedness shall be deemed to be in an
amount equal to the lesser of the aggregate amount of such Indebtedness and the
fair market value of the property to which such Lien relates as determined in
good faith by such Person), (v) all Capitalized Lease Obligations and Synthetic
Lease Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vii) all net obligations
of such Person under Interest Rate Protection Agreements and Other Hedging
Agreements and (viii) all Contingent Obligations of such Person, PROVIDED that
Indebtedness shall not include trade payables, accrued expenses and receipt of
progress and advance payments, in each case arising in the ordinary course of
business.
"Industrial Chain Business" shall mean Holdings' and its Subsidiaries'
engineered chain, roller chain, leaf chain and conveying equipment business
(including sprockets, accessories and conveyor components that are complementary
to their chain and conveying equipment products).
"Initial Borrowing Date" shall mean the date upon which the initial
Borrowing of Loans occurs.
"Initial Investors" shall mean Xxxxxxx, Xxxxxxx Affiliates, management
and employees of Holdings and its Subsidiaries and the other owners of the
capital stock of Holdings on the Initial Borrowing Date, after giving effect to
the Transaction.
"Interest Period" with respect to any Loan shall mean the interest
period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar agreement
or other similar agreement or arrangement designed to protect against
fluctuations in interest rates.
"Intermediate Holdco" shall mean a corporation organized under the
laws of a State of the United States, and in accordance with the requirements of
Section 8.07, which shall be a direct Wholly-Owned Subsidiary of Holdings and
shall own 100% of the Equity Interests of the Borrower.
"Joinder Agreement" shall have the meaning provided in Section 8.07.
"Joint Lead Arrangers" shall mean each of DBSI and CSFB Cayman in
their capacity as such hereunder.
"Joint Venture" shall mean any entity other than a Wholly-Owned
Subsidiary of the Borrower in which the Borrower or one or more of its
Subsidiaries hold Equity Interests representing at least 20% of the total
outstanding Equity Interests of such entity.
"Leasehold" of any Person means all of the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
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"Lender" shall mean each financial institution listed on Schedule I,
as well as any Person that becomes a "Lender" hereunder pursuant to Section 1.13
or 12.04(b).
"Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any incurrence of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) a Lender having notified the
Administrative Agent and/or the Borrower that it does not intend to comply with
the obligations under Section 1.01 or 2, in the case of either clause (i) or
(ii) as a result of the appointment of a receiver or conservator with respect to
such Lender at the direction or request of any regulatory agency or authority.
"Lender Register" shall have the meaning provided in Section 12.16.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Issuer" shall mean (i) DBTCA in its capacity as a
Letter of Credit Issuer hereunder, (ii) in the case of Trade Letters of Credit
only, M&I Xxxxxxxx & Xxxxxx Bank in its capacity as a Letter of Credit Issuer of
Trade Letters of Credit and (iii) any other Lender which at the request of the
Borrower and with the consent of the Administrative Agent (not to be
unreasonably withheld) agrees in such Lender's sole discretion to become a
Letter of Credit Issuer for the purpose of issuing Letters of Credit pursuant to
Section 2, provided that as of the Effective Date and until such time as it
agrees otherwise, neither DBTCA nor any of its Affiliates shall be the Letter of
Credit Issuer with respect to any Trade Letter of Credit. Any Letter of Credit
Issuer may, in its discretion, arrange for one or more Letters of Credit to be
issued by one or more Affiliates of such Letter of Credit Issuer who are
reasonably satisfactory to the Borrower, and the term "Letter of Credit Issuer"
shall include any such Affiliate with respect to Letters of Credit issued by it.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Lien" shall mean any mortgage, pledge, hypothecation, encumbrance,
lien (statutory or other), or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, and any lease in the nature thereof having substantially
the same effect as any of the foregoing).
"Loan" shall have the meaning provided in Section 1.01.
"Location" of any Person means such Person's "location" as determined
pursuant to Section 9-307 of the Uniform Commercial Code of the State of New
York.
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"Management Agreement" shall mean the management agreement entered
into among Carlyle and/or one or more Carlyle Affiliates and Holdings as in
effect in the Effective Date, and as same may be amended with the consent of the
Joint Lead Arrangers.
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(d).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, assets, operations or condition (financial or otherwise) of Holdings
and its Subsidiaries (or, for the purposes of Section 5.01(g) or any
representation or warranty made on the Initial Borrowing Date, the Rexnord
Business) taken as a whole.
"Maturity Date" shall mean each of the RF Maturity Date and the Term
Loan Maturity Date.
"Maximum Swingline Amount" shall mean the lesser of $20,000,000 and
the amount of the Total Revolving Commitment.
"Minimum Borrowing Amount" shall mean (i) for Term Loans, Revolving
Loans and Swingline Loans maintained as Base Rate Loans, $250,000 and (ii) for
Term Loans and Revolving Loans maintained as Eurodollar Loans, $1,000,000.
"Moody's" shall have the meaning provided in the definition of Cash
Equivalents.
"Mortgage" shall mean a mortgage, leasehold mortgage, deed of trust,
leasehold deed of trust, deed to secure debt, leasehold deed to secure debt or
similar security instrument, each in a form designated by counsel, and
reasonably satisfactory, to the Administrative Agent and the Borrower.
"Mortgage Policy" shall mean a mortgage title insurance policy or a
binding commitment with respect thereto.
"Mortgaged Properties" shall mean the Real Property of the Credit
Parties listed on Schedule III and designated as "Mortgaged Properties" therein.
"NAIC" shall mean the National Association of Insurance Commissioners.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net (without duplication) of (i) expenses of
sale or, in the case of an Asset Sale of the type described in clause (z) of the
definition thereof, of collection, (ii)(A) in the case of Foreign Asset Sales,
all payments of principal, premium and interest of Indebtedness (other than
Indebtedness to the Lenders pursuant to this
Credit Agreement) of any Foreign
Subsidiary actually made with the proceeds of the respective Foreign Asset Sale,
provided that the Permitted Foreign Subsidiary Debt Amount shall be permanently
reduced in an amount equal to the aggregate amount so applied, and (B) in the
case of all other Asset Sales, payments of principal, premium and interest of
Indebtedness (other than Indebtedness to the Lenders pursuant to this
Credit
Agreement) secured by the assets the subject of the Asset Sale and required to
be,
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and which is, repaid under the terms thereof as a result of such Asset Sale) and
(iii) the marginal increased amount of all taxes and other amounts owing to
governmental entities as a result of such Asset Sale.
"Non-Defaulting Lender" shall mean a Lender that is not a Defaulting
Lender.
"Note" shall mean and include each Term Note, each Revolving Note and
the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean (i) for credit notices, the office of the
Administrative Agent located at 00 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxx Xxxx, Telephone No.: (000) 000-0000, and Telecopier
No.: (000) 000-0000, and (ii) for operational notices, the office of the
Administrative Agent located at 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx City, New
Jersey 07302, Attention: Xxxx Xxxxx, Telephone No.: (000) 000-0000, and
Telecopier No.: (000) 000-0000, or such other office or person as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
either Joint Lead Arranger, the Administrative Agent, the Collateral Agent, any
Letter of Credit Issuer or any Lender pursuant to the terms of this Agreement or
any other Credit Document.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar arrangements, or
arrangements designed to protect against fluctuations in currency values or
commodity prices.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Administrative Agent at
00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean the acquisition by a Qualified
Credit Party or a Foreign Subsidiary of an Acquired Entity or Business
(including by way of merger of such Acquired Entity or Business with and into
such Qualified Credit Party or Foreign Subsidiary (so long as the Qualified
Credit Party or the respective Foreign Subsidiary is the surviving
corporation)), PROVIDED that (in each case) (A) the consideration paid or to be
paid by the respective Qualified Credit Party or Foreign Subsidiary consists
solely of cash (including proceeds of Revolving Loans or Swingline Loans), Cash
Equivalents, Foreign Cash Equivalents, the issuance or incurrence of
Indebtedness otherwise permitted by Section 8.04, the assumption/acquisition of
any Indebtedness (calculated at face value) which is permitted to
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remain outstanding in accordance with the requirements of Section 8.04, and the
issuance of common stock of Holdings or Qualified Preferred Stock otherwise
permitted by Section 8.13, (B) in the case of the acquisition of 100% of the
Equity Interests of any Person that is organized in the United States or a State
or territory thereof (including by way of merger), such Person shall own no
Equity Interests of any other Person (excluding DE MINIMIS amounts) unless such
Person owns 100% of the Equity Interests of such other Person, (C) the Acquired
Entity or Business acquired pursuant to the respective Permitted Acquisition is
in a business permitted by Section 8.01 and (D) all applicable requirements of
Sections 7.12, 8.02 and 8.07 applicable to Permitted Acquisitions are satisfied.
Notwithstanding anything to the contrary contained in the immediately preceding
sentence, an acquisition which does not otherwise meet the requirements set
forth above in the definition of "Permitted Acquisition" shall constitute a
Permitted Acquisition if, and to the extent, the Required Lenders agree in
writing that such acquisition shall constitute a Permitted Acquisition for
purposes of this Agreement.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the Mortgage Policy
delivered with respect thereto, all of which exceptions must be acceptable to
the Administrative Agent in its reasonable discretion.
"Permitted Factoring Transaction Outstandings" at any time shall mean
the aggregate amount of cash theretofore paid to Foreign Subsidiaries of the
Borrower in respect of the receivables and related assets sold or transferred by
them pursuant to one or more factoring arrangements, in each case to the extent
the respective receivables have not yet been repaid by the respective account
debtor or repurchased by Foreign Subsidiaries of the Borrower (it being the
intent of the parties that the amount of Permitted Factoring Transaction
Outstandings at any time outstanding approximate as closely as possible the
principal amount of Indebtedness which would be outstanding pursuant to all
factoring arrangements then in effect if same were structured as a secured
lending agreement rather than a purchase agreement).
"Permitted Foreign Investment Amount" shall mean, at the time of any
determination thereof, $35,000,000 less (without duplication) (i) the aggregate
fair market value (as determined by the Borrower in good faith, but in the case
of any lease of assets referred to below, including the fair market value of all
of the assets which are the subject of such lease) of all assets conveyed, sold,
leased or otherwise transferred (net of the amount of any cash consideration
received therefor, when and as received) pursuant to Section 8.02(i) after the
Initial Borrowing Date and on or prior to the date of such determination, (ii)
the aggregate consideration paid by the Borrower and its Subsidiaries in
connection with Permitted Acquisitions made by one or more Foreign Subsidiaries
of the Borrower or where the respective Acquired Entity or Business is outside
(or the Person that is the target Company of the respective Permitted
Acquisition owning any assets so acquired is organized outside) the United
States (or if only a portion the assets of such respective Acquired Entity or
Business is located outside of the United States, the fair market value of such
portion of assets located outside of the United States), except to the extent
such consideration is paid solely from (x) internally generated cash of a
Foreign Subsidiary, (y) cash proceeds of Indebtedness incurred by a Foreign
Subsidiary or (z) capital contributions, loans and advances or other investments
received from the Borrower or any of its Domestic Subsidiaries which have
reduced the Permitted Foreign Investment Amount as provided in clause (v) below,
(iii) the aggregate amount of Contingent Obligations then outstanding pursuant
to Section 8.04(k) (taking the maximum amount then supported by the
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respective Contingent Obligations) and outstanding at the time of determination,
(iv) all amounts theretofore paid with respect to Contingent Obligations
previously outstanding pursuant to Section 8.04(k) (less any cash payments
actually received in reimbursement thereof from the direct obligor whose
obligations were supported by such Contingent Obligations) and (v) the aggregate
amount of capital contributions, loans and advances and other investments made
pursuant to Section 8.06(k) after the Initial Borrowing Date and on or prior to
the time of such determination (net of the amount of returns on such capital
contributions, loans and advances and other investments, to the extent such
amount does not exceed the original amount of such capital contributions, loans
and advances and other investments).
"Permitted Foreign Subsidiary Debt Amount" shall mean, at the time of
any determination thereof, $25,000,000 less (without duplication) the aggregate
amount of all reductions thereto pursuant to clause (ii)(A) of the definition of
Net Cash Proceeds contained herein, as a result of the application of proceeds
of Foreign Asset Sales made after the Initial Borrowing Date and on or prior to
the time of such determination.
"Permitted Honeywell Receivables Transaction Outstandings" at any time
shall mean the aggregate amount of cash theretofore paid to the Borrower and its
Subsidiaries in respect of the receivables (and related assets) arising from
goods and services provided to Honeywell International, Inc. sold or transferred
by them pursuant to one or more factoring arrangements, in each case to the
extent the respective receivables have not yet been repaid by the respective
account debtor or repurchased by the Borrower or its Subsidiaries (it being the
intent of the parties that the amount of Permitted Honeywell Receivables
Transaction Outstandings at any time outstanding approximate as closely as
possible the principal amount of Indebtedness which would be outstanding
pursuant to all such factoring arrangements then in effect if same were
structured as a secured lending agreement rather than a purchase agreement).
"Permitted JV Investment Amount" shall mean, at the time of any
determination thereof, $10,000,000 less (without duplication) (i) the aggregate
amount of all investments deemed made pursuant to clause (3) of Section 8.02(f),
(ii) the aggregate fair market value (as determined by the Borrower in good
faith) of all assets conveyed, sold or transferred (net of the amount of any
cash consideration received therefor) pursuant to Section 8.02(j) after the
Initial Borrowing Date and on or prior to the date of such determination, (iii)
the aggregate amount of Contingent Obligations then outstanding pursuant to
Section 8.04(l) (taking the maximum amount then supported by the respective
Contingent Obligations) and outstanding at the time of determination, (iv) all
amounts theretofore paid with respect to Contingent Obligations previously
outstanding pursuant to Section 8.04(l) (less any cash payments actually
received in reimbursement thereof from the direct obligor whose obligations were
supported by such Contingent Obligations) and (v) the aggregate amount of
capital contributions, loans and advances and other investments made pursuant to
Section 8.06(q) (or deemed made pursuant to clause (3) of the proviso to Section
8.02(f)) after the Initial Borrowing Date and on or prior to the time of such
determination (net of the amount of returns on such capital contributions, loans
and advances and other investments, to the extent such amount does not exceed
the original amount of such capital contributions, loans and advances and other
investments).
"Permitted Liens" shall mean Liens described in Section 8.03.
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"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean (i) any pension plan as defined in Section 3(2) of
ERISA (other than a Foreign Pension Plan), which is maintained or contributed to
by (or to which there is an obligation to contribute of) Holdings, the Borrower
or any of its Subsidiaries or any such pension plan subject to Title IV or
Section 302 of ERISA or Section 412 of the Code which is maintained or
contributed to by (or to which there is an obligation to contribute of) an ERISA
Affiliate, after giving effect to the Transaction, and (ii) each such pension
plan for the five year period immediately following the latest date on which
Holdings, the Borrower or any such Subsidiary of the Borrower or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan and with respect to which Holdings, the Borrower or any of its Subsidiaries
may incur any liability (including any indirect, contingent or secondary
liability).
"Pledge Agreement" shall have the meaning provided in Section 5.01(i).
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreement.
"Post-Test Period PRO FORMA Basis" means the making of calculations on
a PRO FORMA basis (with calculations of Consolidated EBITDA to be based on the
Test Period most recently ended) in accordance with, and to the extent required
by, the provisions of Section 10.02, taking into account certain events
occurring after the end of the respective Test Period and on or prior to the
date of determination, in accordance with the provisions of Section 10.02 with
respect to determinations to be made on a Post-Test Period PRO FORMA Basis.
"Prime Lending Rate" shall mean the rate which the Administrative
Agent announces from time to time as its prime lending rate, the Prime Lending
Rate to change when and as such prime lending rate changes. The Prime Lending
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. The Administrative Agent may make
commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.
"PRO FORMA Basis" means, with respect to any Test Period, the making
of calculations on a PRO FORMA basis for certain events (including Significant
Acquisitions and Significant Asset Sales) in accordance with, and to the extent
required by, the provisions of Section 10.02 hereof, but without making
adjustments for events which occurred after the end of the respective Test
Period.
"Projections" shall mean the projections contained in the Confidential
Information Memorandum, dated October 2002, which were prepared by or on behalf
of the Borrower in connection with this Agreement and delivered to the
Administrative Agent and the Lenders prior to the Effective Date.
"Qualified Credit Party" shall mean (i) the Borrower and (ii) each
Wholly-Owned Domestic Subsidiary of the Borrower that is a Subsidiary Guarantor.
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"Qualified Preferred Stock" means any preferred capital stock of
Holdings so long as the terms of any such preferred capital stock (x) do not
contain any mandatory put, redemption, repayment, sinking fund or other similar
provision prior to the date occurring one year following the Term Loan Maturity
Date and (y) do not require the cash payment of dividends or distributions at
any time that such cash payment would result in a Default or an Event of Default
hereunder.
"Qualified Public Offering" shall mean an underwritten public offering
of the common stock of Holdings which generates cash proceeds to Holdings of at
least $100,000,000.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Refinancing Indebtedness" shall mean Indebtedness of the Borrower or
any of its Subsidiaries the proceeds of which are used to refinance Indebtedness
theretofore outstanding pursuant to (and as permitted by) Section 8.04(f) or
(j); PROVIDED that (i) the principal amount of such Refinancing Indebtedness
shall not exceed that of the Indebtedness being refinanced immediately before
the respective refinancing is consummated (plus the amount of any premium
actually paid on the Indebtedness so refinanced), (ii) all net proceeds of
Refinancing Indebtedness are substantially concurrently applied to permanently
repay the Indebtedness being refinanced, (iii) Refinancing Indebtedness shall
not have a final maturity or weighted average life to maturity shorter than the
remaining final maturity or weighted average life to maturity of the
Indebtedness so refinanced, (iv) the terms of Refinancing Indebtedness
(including any applicable subordination terms, but excluding interest rates and
other economic terms so long as based on then current market conditions) shall
not be materially less favorable to the Borrower or the respective Subsidiary or
the Lenders than the terms of the Indebtedness so refinanced, (v) the obligor on
Refinancing Indebtedness shall be the same as the obligor on the Indebtedness so
refinanced and (vi) the Liens, guarantees or other credit support for
Refinancing Indebtedness shall be no more favorable in any material respect to
the obligee of such Indebtedness than such credit support for the Indebtedness
being refinanced.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
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"Reinvestment Assets" shall mean any assets to be employed in the
business of the Borrower and its Subsidiaries as described in Section 8.01.
"Reinvestment Election" shall have the meaning provided in
Section 4.02(A)(c).
"Reinvestment Notice" shall mean a written notice signed by an
Authorized Officer of the Borrower stating that the Borrower, in good faith,
intends and expects to use all or a specified portion of the Net Cash Proceeds
of an Asset Sale to purchase, construct or otherwise acquire Reinvestment
Assets.
"Reinvestment Prepayment Amount" shall mean, with respect to any
Reinvestment Election, the amount, if any, on the Reinvestment Prepayment Date
relating thereto by which (a) the Anticipated Reinvestment Amount in respect of
such Reinvestment Election exceeds (b) the aggregate amount thereof expended by
the Borrower and its Subsidiaries to acquire Reinvestment Assets.
"Reinvestment Prepayment Date" shall mean, with respect to any
Reinvestment Election, the earliest of (i) the date, if any, upon which the
Administrative Agent, on behalf of the Required Lenders, shall have delivered a
written termination notice to the Borrower, PROVIDED that such notice may only
be given while an Event of Default under Section 9.01 or 9.05 exists, (ii) the
date occurring 365 days after such Reinvestment Election and (iii) the date on
which the Borrower shall have determined not to proceed with the purchase,
construction or other acquisition of Reinvestment Assets with the related
Anticipated Reinvestment Amount.
"Release" shall mean actively or passively disposing, discharging,
injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping,
emptying, pouring, seeping, migrating or the like, into or upon any land or
water or air, or otherwise entering into the environment.
"Replaced Lender" shall have the meaning provided in Section 1.13.
"Replacement Lender" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
..22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Lenders" shall mean Non-Defaulting Lenders the sum of whose
outstanding Term Loans and Revolving Commitments (or after the termination
thereof, outstanding Revolving Loans and RF Percentages of (x) outstanding
Swingline Loans and (y) Letter of Credit Outstandings) exceed 50% of the sum of
(i) all outstanding Term Loans of Non-Defaulting Lenders, and (ii) the Total
Revolving Commitment less the Revolving Commitments of all Defaulting Lenders
(or after the termination thereof, the sum of then total outstanding Revolving
Loans of Non-Defaulting Lenders and the aggregate RF Percentages of all
Non-Defaulting Lenders of the total (x) outstanding Swingline Loans and (y)
Letter of Credit Outstandings at such time).
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"Returns" shall have the meaning provided in Section 6.13.
"Revolving Commitment" shall mean, with respect to each Lender, the
amount set forth opposite such Lender's name in Schedule I hereto directly below
the column entitled "Revolving Commitment," as the same may be (x) reduced or
terminated from time to time pursuant to Section 3.02, 3.03 and/or 9 or (y)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 1.13 and/or 12.04.
"Revolving Facility" shall mean the Facility evidenced by the
Revolving Commitments (and outstandings pursuant thereto).
"Revolving Loan" shall have the meaning provided in Section 1.01(b).
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"Rexnord Business" shall mean all of the entities comprising the
Rexnord business of Invensys, plc acquired by the Borrower pursuant to the
Acquisition Agreement, including, but not limited to, the Rexnord Corporation, a
Delaware corporation.
"RF Lender" shall mean at any time each Lender with a Revolving
Commitment or with outstanding Revolving Loans.
"RF Maturity Date" shall mean November 25, 2008.
"RF Percentage" shall mean at any time for each RF Lender, the
percentage obtained by dividing such Lender's Revolving Commitment by the Total
Revolving Commitment, PROVIDED that if the Total Revolving Commitment has been
terminated, the RF Percentage of each RF Lender shall be determined by dividing
such RF Lender's Revolving Commitment immediately prior to such termination by
the Total Revolving Commitment immediately prior to such termination.
"S&P" shall have the meaning provided in the definition of Cash
Equivalents.
"Sale/Leaseback Transaction" means an arrangement relating to property
owned by a Foreign Subsidiary on the Initial Borrowing Date or thereafter
acquired by a Foreign Subsidiary whereby such Foreign Subsidiary transfers such
property to one or more third Persons and the Foreign Subsidiary leases such
property from such Person(s).
"Scheduled Repayment" shall have the meaning provided in
Section 4.02(A)(b).
"SEC" shall have the meaning provided in Section 7.01(h).
"Section 4.04 Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditor" shall mean and include any Secured Creditor as
defined in any Security Document.
"Security Agreement" shall have the meaning provided in
Section 5.01(j).
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"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean the Pledge Agreement, the Security
Agreement, each Mortgage, each Additional Mortgage, if any, and each pledge and
security agreement or similar agreement governed by local law entered into as
contemplated under Section 7.10(c), if any.
"Senior Subordinated Note Documents" shall mean and include each of
the documents, instruments (including the Senior Subordinated Notes) and other
agreements entered into by the Borrower (including, without limitation, the
Senior Subordinated Note Indenture and any documents in respect of any Senior
Subordinated Notes issued upon the exchange offer as contemplated by the Senior
Subordinated Note Indenture) relating to the issuance by the Borrower of the
Senior Subordinated Notes, as in effect on the Initial Borrowing Date and as the
same may be entered into, supplemented, amended or modified from time to time in
accordance with the terms hereof and thereof.
"Senior Subordinated Note Indenture" shall mean an Indenture entered
into by and between the Borrower and Xxxxx Fargo Minnesota National Association,
as trustee thereunder, with respect to Senior Subordinated Notes as in effect on
the Initial Borrowing Date and as the same may be modified, amended or
supplemented from time to time in accordance with the terms hereof and thereof.
"Senior Subordinated Notes" shall mean the Senior Subordinated Notes
due 2012 in an initial aggregate amount of $225,000,000 and issued by Holdings
under the Senior Subordinated Note Indenture and all Senior Subordinated Notes
issued upon the exchange offer as contemplated in the Senior Subordinated Note
Indenture, as in effect on the Initial Borrowing Date and as the same may be
issued, supplemented, amended or modified from time to time in accordance with
the terms thereof and hereof.
"Significant Acquisition" shall mean any Permitted Acquisition the
aggregate consideration (taking the amount of cash and Cash Equivalents, the
aggregate amount expected to be paid on or after the date of the respective
Acquisition pursuant to any earn-out, non-compete, consulting or deferred
compensation or purchase price adjustment of similar arrangements, the fair
market value (as determined in good faith by the Borrower) of all other non-cash
consideration and the aggregate amount of assumed Indebtedness) for which
exceeds $10,000,000.
"Significant Asset Sale" means any Asset Sale the aggregate
consideration (taking the amount of cash and Cash Equivalents, the aggregate
amount expected to be paid on or after the date of the respective Asset Sale
pursuant to any earn-out, non-compete, consulting or deferred compensation or
purchase price adjustment or similar arrangements, the fair market value (as
determined in good faith by the Borrower) of all other non-cash consideration
and the aggregate amount of assumed Indebtedness) for which exceeds $10,000,000.
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
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"Start Date" shall have the meaning provided in the definition of
Applicable Margin.
"Stated Amount" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met and using the Dollar Equivalent thereof in the case of
any Letter of Credit denominated in an Alternate Currency).
"Subsidiaries Guaranty" shall have the meaning provided in
Section 5.01(n).
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of Holdings.
"Subsidiary Guarantors" shall mean each Domestic Subsidiary other than
any such Domestic Subsidiary created as contemplated in the proviso contained in
clause (A) of Section 8.07 but only until such time as the respective Permitted
Acquisition is consummated.
"Supermajority Lenders" shall mean those Non-Defaulting Lenders which
would constitute the Required Lenders under, and as defined in, this Agreement
if (x) all outstanding Obligations in respect of the Revolving Commitments were
repaid in full and the Total Revolving Commitment was terminated and (y) the
text "exceed 50%" contained therein were changed to "exceed 66-2/3%."
"Swingline Expiry Date" shall mean the date which is two Business Days
prior to the RF Maturity Date.
"Swingline Lender" shall mean DBTCA or, in the event DBTCA ceases to
be Swingline Lender, any Lender which at the request of the Borrower and the
consent of the Administrative Agent agrees in such Lender's sole discretion to
become the Swingline Lender.
"Swingline Loan" shall have the meaning provided in Section 1.01(c).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Date" shall mean the date upon which the Total Commitment
(and related outstanding Loans) have been "Successfully Syndicated" to Lenders
under this Agreement as previously agreed to in writing between Holdings and the
Joint Lead Arrangers.
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic off-balance sheet or tax retention lease, or (b)
an agreement for the use or possession of property creating obligations that do
not appear on the balance sheet of such
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Person which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).
"Tax Benefit" has the meaning provided in Section 4.04(c).
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Commitment" shall mean, with respect to each Lender, the amount,
if any, set forth opposite such Lender's name on Schedule I hereto directly
below the column entitled "Term Commitment" as the same may be terminated
pursuant to Section 3.03 and/or 9.
"Term Facility" shall mean the Facility evidenced by the Term
Commitments (or, after the termination of the Total Term Commitment, the
outstanding Term Loans).
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Maturity Date" shall mean November 25, 2009.
"Term Note" shall have the meaning provided in Section 1.05(a).
"Test Period" shall mean each period of four consecutive fiscal
quarters of Holdings ended (for this purpose, assuming Holdings was in existence
at all times from and after January 1, 2002) after January 1, 2003, in each case
taken as one accounting period.
"Total Commitment" shall mean the sum of the Total Term Commitment and
the Total Revolving Commitment.
"Total Revolving Commitment" shall mean the sum of the Revolving
Commitments of each of the Lenders.
"Total Term Commitment" shall mean the sum of the Term Commitments of
each of the Lenders.
"Total Unutilized Revolving Commitment" shall mean, at any time, (i)
the Total Revolving Commitment at such time less (ii) the sum of the aggregate
principal amount of all Revolving Loans and Swingline Loans at such time plus
the Letter of Credit Outstandings at such time.
"Trade Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Transaction" shall mean (i) the consummation of the Common Equity
Financing, (ii) the consummation of the Acquisition, (iii) the issuance of the
Senior Subordinated Notes and (iv) the incurrence of Loans and issuance of
Letters of Credit, if any, on the Initial Borrowing Date.
"Transaction Documents" shall mean the Acquisition Documents and the
Senior Subordinated Note Documents.
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"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial assumptions
at such time consistent with those prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds the fair market value of all plan assets
allocable to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contributions).
"Unpaid Drawing" shall have the meaning provided in Section 2.03(a).
"Unutilized Revolving Commitment" for any RF Lender at any time shall
mean the excess of (i) the Revolving Commitment of such Lender over (ii) the sum
of (x) the aggregate outstanding principal amount of Revolving Loans made by
such Lender plus (y) an amount equal to such Lender's Adjusted RF Percentage of
the Letter of Credit Outstandings at such time; PROVIDED that the Unutilized
Revolving Loan Commitment of the Swingline Lender shall at any time be reduced
(but not below zero) by the aggregate amount of Swingline Loans made by it which
are then outstanding.
"U.S." shall mean the United States of America.
"Wachovia" shall mean Wachovia Bank, National Association, in its
individual capacity.
"Wholly-Owned Domestic Subsidiary" shall mean each Wholly-Owned
Subsidiary that is a Domestic Subsidiary.
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary of
such Person to the extent all of the Equity Interests in such Subsidiary, other
than directors' qualifying shares and, in the case of Foreign Subsidiaries,
nominal amounts of shares issued to other Persons in accordance with applicable
law, is owned directly or indirectly by such Person.
"Written" or "in writing" shall mean any form of written communication
or a communication by means of telex, facsimile transmission, telegraph or
cable.
10.02 CERTAIN PRO FORMA CALCULATIONS. (a) For purposes of calculating
Consolidated EBITDA for any Test Period on a PRO FORMA Basis or a Post-Test
Period PRO FORMA Basis for purposes of this Agreement, the following rules shall
apply:
(i) if at any time after the Effective Date and during the
respective Test Period (and, in the case of determinations being made on a
Post-Test Period PRO FORMA Basis only, thereafter and on or prior to the
date of determination) the Borrower or any of its Subsidiaries shall have
made any Significant Asset Sale, Consolidated EBITDA for such Test Period
shall be reduced by an amount equal to the Consolidated EBITDA (if
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positive) attributable to the assets or Equity Interests which are the
subject of such Significant Asset Sale for such Test Period or increased by
an amount equal to the Consolidated EBITDA (if negative) applicable thereto
for such Test Period;
(ii) if at any time after the Effective Date and during such Test
Period (and, in the case of determinations being made on a Post-Test Period
PRO FORMA Basis only, thereafter and on or prior to the date of
determination) the Borrower or any Subsidiaries shall have made any
Significant Acquisition, Consolidated EBITDA for such Test Period shall be
calculated after giving PRO FORMA effect thereto as if such Significant
Acquisition had occurred on the first day of such Test Period;
(iii) if during such Test Period (and, in the case of determinations
being made on a Post-Test Period PRO FORMA Basis only, thereafter and on or
prior to the date of determination) any Person that became a Subsidiary or
was merged with or into the Borrower or any of its Subsidiaries since the
beginning of such Test Period pursuant to a Significant Acquisition made
after the Effective Date shall have entered into any disposition or
acquisition transaction that would have required an adjustment pursuant to
clause (i) or (ii) above if made by the Borrower or a Subsidiary of the
Borrower during such Test Period, Consolidated EBITDA for such Test Period
shall be calculated after giving PRO FORMA effect thereto as if such
transaction occurred on the first day of such Test Period; and
(iv) pro forma calculations of Consolidated EBITDA, whether
pursuant to this Section 10.02 or otherwise, shall not give effect to
anticipated cost savings and/or increases to Consolidated EBITDA for the
relevant period, except in cases of Significant Acquisitions for factually
supportable and identifiable cost savings and expenses which would
otherwise be accounted for as an adjustment pursuant to Article 11 of
Regulation S-X under the Securities Act of 1933, as amended, as if such
cost savings or expenses were realized on the first day of the respective
period.
(b) For purposes of calculating Consolidated Debt for purposes of
this Agreement (including as used in the definition of Leverage Ratio), all
determinations thereof shall be made based on the actual amount of Consolidated
Debt outstanding on the date of the required determination of Consolidated Debt
(or of the Leverage Ratio) (in the case of determinations to be made on a
Post-Test Period PRO FORMA Basis, after giving effect to all incurrences and
repayments of Consolidated Debt in connection with the respective event or
occurrence requiring that a determination be made on a Post-Test Period PRO
FORMA Basis).
(c) For purposes of calculating the Consolidated Interest Coverage
Ratio for any Test Period on a Post-Test Period PRO FORMA Basis for purposes of
this Agreement all determinations of Consolidated Interest Coverage Ratio for
the respective Test Period shall be made, with such pro forma adjustments as may
be determined in accordance with GAAP and the rules, regulations and guidelines
of the SEC (including without limitation Article 11 of Regulation S-X), after
giving effect to all Significant Acquisitions and Significant Asset Sales
effected after the first day of the respective Test Period and on or prior to
the date of any determination on a Post-Test Period PRO FORMA Basis, as well as
to all incurrences of Indebtedness and permanent repayments of Indebtedness
(excluding normal fluctuations in
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working capital Indebtedness) during the respective Test Period or thereafter
and on or prior to the date of the respective determination on a Post-Test
Period PRO FORMA Basis as if same had occurred on the first day of the
respective Test Period.
SECTION 11. THE AGENTS.
11.01 APPOINTMENT. The Lenders hereby designate DBTCA as
Administrative Agent (for purposes of this Section 11, the terms "Administrative
Agent" shall include DBTCA in its capacity as Collateral Agent pursuant to the
Security Documents) to act as specified herein and in the other Credit
Documents. The Lenders hereby designate GECC and Wachovia as Co-Documentation
Agents to act as specified herein and in the other Credit Documents. The Lenders
hereby designate DBSI and CSFB Cayman as Joint Lead Arrangers to act as
specified herein and in the other Credit Documents. Each Lender hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, each Agent to take such action on
its behalf under the provisions of this Agreement, the other Credit Documents
and any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of each Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. Each Agent
may perform any of their duties hereunder by or through their respective
officers, directors, agents, employees or affiliates.
11.02 NATURE OF DUTIES. The Agents shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
Security Documents. No Agent nor any of its respective officers, directors,
agents, employees or affiliates shall be liable for any action taken or omitted
by them hereunder or under any other Credit Document or in connection herewith
or therewith, unless caused by their gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable
decision). The duties of the Agents shall be mechanical and administrative in
nature; no Agent shall have by reason of this Agreement or any other Credit
Document a fiduciary relationship in respect of any Lender or the holder of any
Note; and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose upon any Agent any
obligations in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein.
11.03 LACK OF RELIANCE ON THE AGENTS. Independently and without
reliance upon any Agent, each Lender and the holder of each Note, to the extent
it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of Holdings and
its Subsidiaries in connection with the making and the continuance of the Loans
and the taking or not taking of any action in connection herewith and (ii) its
own appraisal of the creditworthiness of Holdings and its Subsidiaries and,
except as expressly provided in this Agreement, no Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. No Agent shall be responsible to any Lender or the
holder of any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
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Agreement or any other Credit Document or the financial condition of Holdings
and its Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or the financial condition of Holdings
and its Subsidiaries or the existence or possible existence of any Default or
Event of Default.
11.04 CERTAIN RIGHTS OF THE AGENTS. If any Agent shall request
instructions from the Required Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, such Agent shall be entitled to refrain from such act or taking such
action unless and until such Agent shall have received instructions from the
Required Lenders; and such Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Lender nor any
holder of any Note shall have any right of action whatsoever against any Agent
as a result of such Agent acting or refraining from acting hereunder or under
any other Credit Document in accordance with the instructions of the Required
Lenders.
11.05 RELIANCE. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype, facsimile or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that such Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Credit Document and its duties hereunder and thereunder, upon advice of counsel
selected by such Agent.
11.06 INDEMNIFICATION. To the extent that any Agent is not reimbursed
and indemnified by the Borrower, each Lender will reimburse and indemnify such
Agent, in proportion to its "percentage" as used in determining the Required
Lenders (determined as if there were no Defaulting Lenders) for and against any
and all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by such Agent in performing its
duties hereunder or under any other Credit Document, in any way relating to or
arising out of this Agreement or any other Credit Document; PROVIDED that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of any Agent (as
determined by a court of competent jurisdiction in a final and non-appealable
decision).
11.07 THE AGENTS IN THEIR INDIVIDUAL CAPACITY. With respect to its
obligation to make Loans under this Agreement, each Agent shall have the rights
and powers specified herein for a "Lender" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Lenders," "Required Lenders," "Supermajority Lenders," "holders of Notes"
or any similar terms shall, unless the context clearly otherwise indicates,
include each Agent in its individual capacity. Each Agent may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or other
business with any Credit Party or any Affiliate of any Credit Party as if it
were not performing the duties specified herein, and may accept fees and other
consideration from Holdings, or any other Credit Party for
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services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
11.08 HOLDERS. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
11.09 RESIGNATION. (a) The Administrative Agent may resign from the
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 30 days' prior written notice to the
Borrower and the Lenders. Any such resignation by an Administrative Agent
hereunder shall also constitute its resignation as a Letter of Credit Issuer,
the Swingline Lender and the Collateral Agent, in which case upon the
effectiveness of such resignation in accordance with this Section 11.09 the
resigning Administrative Agent (x) shall not be required to issue any further
Letters of Credit, make any additional Swingline Loans hereunder or discharge
any duties of the "Collateral Agent" under the Security Documents and (y) shall
maintain all of its rights as a Letter of Credit Issuer, the Swingline Lender
and the Collateral Agent, as the case may be, with respect to any Letters of
Credit issued by it, Swingline Loans made by it, or actions taken (or omitted to
be taken) by it under the Security Documents, in each case prior to the
effective date of such resignation. Such resignation shall take effect upon the
appointment of a successor Administrative Agent pursuant to clauses (b) and (c)
below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders
shall appoint a successor Administrative Agent hereunder or thereunder (who must
also agree, unless the resigning Administrative Agent otherwise consents (or
another Person is appointed as Collateral Agent in a manner consistent with the
requirements of this clause (b)), to act as Collateral Agent) who shall be a
commercial bank or trust company reasonably acceptable to the Borrower (it being
understood and agreed that (i) the Borrower's acceptance of a successor
Administrative Agent pursuant to this paragraph (b) shall not be unreasonably
withheld and (ii) so long as a Default or Event of Default exists at such time
such successor Administrative Agent shall not be required to be reasonably
acceptable to the Borrower).
(c) If a successor Administrative Agent shall not have been so
appointed within such 30 day period, the Administrative Agent, with the consent
of the Borrower (which consent shall not be unreasonably withheld or delayed but
shall not be required at any time when a Default or an Event of Default exists
and is continuing), shall then appoint a successor Administrative Agent (which
successor Administrative Agent shall be required, unless the resigning
Administrative Agent otherwise consents (or another Person is appointed as
Collateral Agent in a manner consistent with the requirements of this clause
(c)), to also act as Collateral Agent) who shall serve as Administrative Agent
hereunder or thereunder until such time, if any, as the Required Lenders appoint
a successor Administrative Agent as provided above.
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(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 30th day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Lenders shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided in clause (b) above.
(e) Notwithstanding anything to the contrary contained in this
Section 11.09, the Administrative Agent's resignation as Collateral Agent as
contemplated in clause (a) above shall not become effective until a successor
Administrative Agent appointed in accordance with the provisions of clause (b)
or (c) above has agreed to act as "Collateral Agent" under the Credit Documents
or another Person has been appointed as Collateral Agent in accordance with the
provisions of clause (b) or (c).
(f) Each Joint Lead Arranger and each Co-Documentation Agent may
resign from the performance of all of its functions and duties hereunder and/or
under the other Credit Documents at any time by giving 5 Business Days' prior
written notice to the Administrative Agent. Such resignation shall take effect
on the 5th Business Day after the respective notice is given to the
Administrative Agent.
(g) Upon a resignation of any Agent pursuant to this
Section 11.09, such Agent shall remain indemnified to the extent provided in
this Agreement and the other Credit Documents and the provisions of this Section
11 shall continue in effect for the benefit of such Agent for all of its actions
and inactions while serving as an Agent.
11.10 RELEASES IN CONNECTION WITH GRANTS OF CERTAIN LIENS, etc. In
connection with the granting by the Borrower or any of its Subsidiaries of Liens
of the type described in clauses (d), (l), (m) and (n) of Section 8.03, the
Lenders hereby authorize the Administrative Agent and the Collateral Agent to
take any actions deemed appropriate by either such Agent in connection therewith
(including, without limitation, by executing appropriate lien releases or lien
subordination agreements in favor of the holder or holders of such Liens, in
either case solely with respect to the item or items of equipment or other
assets subject to such Liens).
SECTION 12. MISCELLANEOUS.
12.01 PAYMENT OF EXPENSES, ETC. The Borrower agrees to: (i) whether or
not the transactions herein contemplated are consummated, pay all reasonable,
documented, out-of-pocket fees and expenses of the Joint Lead Arrangers in
connection with the negotiation, preparation, execution and delivery of the
Credit Documents and the documents and instruments referred to therein and any
amendment, waiver or consent relating thereto (including, without limitation,
the reasonable fees and disbursements of White & Case LLP, counsel to the Joint
Lead Arrangers and other local and foreign counsel (if any)) and of each Agent
and each Lender in connection with the enforcement of the Credit Documents and
the documents and instruments referred to therein (including, without
limitation, the reasonable fees and disbursements of counsel for the Agents and
for each of the Lenders, provided that, except in the case of a bankruptcy of
any Credit Party, no more than one counsel for the Agents and the Lenders may be
used in any one jurisdiction); (ii) pay and hold each of the Lenders harmless
from and against
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any and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Lender) to pay such taxes; and (iii)
indemnify each Lender (including in its capacity as an Agent or Letter of Credit
Issuer), its officers, directors, employees, representatives agents, advisors
and trustees from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not any Agent or any
Lender is a party thereto and whether or not any such investigation, litigation
or other proceeding is between or among any Agent, any Lender, any Credit Party
or any third Person or otherwise) related to the entering into and/or
performance of any Document or the use of the proceeds of any Loans hereunder or
the Transaction or the consummation of any transactions contemplated in any
Credit Document, or (b) the actual or alleged presence of Hazardous Materials in
the air, surface water or groundwater or on the surface or subsurface of any
Real Property owned or at any time operated by the Borrower or any of its
Subsidiaries, the release, generation, storage, transportation, handling or
disposal of Hazardous Materials at any location, whether or not owned or
operated by the Borrower or any of its Subsidiaries, the non-compliance of any
Real Property with foreign, federal, state and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any Real
Property, or any Environmental Claim asserted against the Borrower, any of its
Subsidiaries or any Real Property owned or at any time operated by Holdings or
any of its Subsidiaries, including, in each case, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified or an affiliate of such Person (as determined by a court of
competent jurisdiction in a final and non-appealable decision)).
12.02 RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, if an Event of Default then exists, each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to any Credit Party or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special but not trust accounts) and any
other Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of any Credit Party against and on account of the
Obligations and liabilities of such Credit Party to such Lender under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of such Credit Party purchased by such
Lender pursuant to Section 12.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
12.03 NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier, facsimile or cable communication) and
mailed, telegraphed, telexed, telecopied, faxed, cabled or delivered, if to a
Credit Party, x/x Xxxxxxx Xxxxxxxxxxx, 0000 Xxxx Xxxxxxxxxx
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Avenue, Milwaukee, Wisconsin, 53214, attention: Chief Financial Officer,
telephone: (000) 000-0000, telecopier: (000) 000-0000; if to any Lender, at its
address specified for such Lender on Schedule II hereto; or, at such other
address as shall be designated by any party in a written notice to the other
parties hereto. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, and
shall be effective when received.
12.04 BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; PROVIDED,
HOWEVER, the Borrower may not assign or transfer any of its rights, obligations
or interest hereunder without the prior written consent of the Lenders and,
PROVIDED FURTHER, that, although any Lender may transfer participations, assign
participations or grant participations in its rights hereunder, such Lender
shall remain a "Lender" for all purposes hereunder (and may not transfer or
assign all or any portion of its Commitments hereunder except as provided in
Sections 1.13 and 12.04(b)) and the transferee, assignee or participant, as the
case may be, shall not constitute a "Lender" hereunder and, PROVIDED FURTHER,
that no Lender shall transfer or grant any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any Loan, Note or Letter
of Credit (unless such Letter of Credit is not extended beyond the RF Maturity
Date) in which such participant is participating, or reduce the rate or extend
the time of payment of interest or Fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates) or
reduce the principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement or to Section
12.07(a) shall not constitute a reduction in the rate of interest or Fees
payable hereunder), or increase the amount of the participant's participation
over the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the Total Commitment
or a mandatory prepayment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment (or the available portion
thereof) or Loan shall be permitted without the consent of any participant if
the participant's participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans or Letters of Credit hereunder in
which such participant is participating. In the case of any such participation,
the participant shall not have any rights under this Agreement or any of the
other Credit Documents (the participant's rights against such Lender in respect
of such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender
together with one or more other Lenders) may (x) assign all or a portion of its
Commitments and related outstanding Obligations (or, if the Commitments with
respect to the relevant Facility have terminated, outstanding Obligations)
hereunder to (i)(A) its parent company and/or any affiliate of such Lender which
is at least 50% owned by such Lender or its parent company or (B) to one or more
other Lenders or any affiliate of any such other Lender which is at least 50%
owned by such other Lender or its parent company (PROVIDED that any fund that
invests in loans and is
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managed or advised by the same investment advisor of another fund which is a
Lender (or by an Affiliate of such investment advisor) shall be treated as an
affiliate of such other Lender for the purposes of this sub-clause (x)(i)(B)),
or (ii) in the case of any Lender that is a fund that invests in loans, any
other fund that invests in loans and is managed or advised by the same
investment advisor of any Lender or by an Affiliate of such investment advisor
or (y) assign all, or if less than all, a portion equal to at least (i) in the
case of Revolving Commitments (and related Outstandings), $5,000,000 and (ii) in
the case of Term Loans, $1,000,000 in each case in the aggregate for the
assigning Lender or assigning Lenders, of such Commitments and related
outstanding Obligations (or, if the Commitments with respect to the relevant
Facility have terminated, outstanding Obligations) hereunder to one or more
Eligible Transferees (treating any fund that invests in loans and any other fund
that invests in loans and is managed or advised by the same investment advisor
of such fund or by an Affiliate of such investment advisor as a single Eligible
Transferee), each of which assignees shall become a party to this Agreement as a
Lender by execution of an Assignment Agreement, PROVIDED that (i) at such time,
Schedule I shall be deemed modified to reflect the Commitments and/or
outstanding Loans, as the case may be, of such new Lender and of the existing
Lenders, (ii) upon the surrender of the relevant Notes by the assigning Lender
(or, upon such assigning Lender's indemnifying the Borrower for any lost Note
pursuant to a customary indemnification agreement) new Notes will be issued, at
the Borrower's expense, to such new Lender and to the assigning Lender upon the
request of such new Lender or assigning Lender, such new Notes to be in
conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments and/or
outstanding Loans, as the case may be, (iii) the consent of the Administrative
Agent and, at all times after the earlier of (A) 60 days following the Initial
Borrowing Date and (B) the Syndication Date (so long as no Default or Event of
Default then exists and is continuing), the Borrower shall be required in
connection with any such assignment pursuant to clause (y) above (each of which
consents shall not be unreasonably withheld or delayed), (iv) in the case of any
assignment of Revolving Commitments and relating outstanding Obligations, the
consent of each Letter of Credit Issuer shall be required (which consent shall
not be unreasonably withheld or delayed), (v) the Administrative Agent shall,
except in the cases of assignments by CSFB Cayman, receive at the time of each
such assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500 and (vi) no such transfer or assignment
will be effective until recorded by the Administrative Agent on the Lender
Register pursuant to Section 12.16. To the extent of any assignment pursuant to
this Section 12.04(b), the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Commitments and outstanding Loans
(including obligations to participate in Letters of Credit and Swingline Loans
and in indemnification payments under Section 11.06 (other than to the extent
not then due)). At the time of each assignment pursuant to this Section 12.04(b)
to a Person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
Federal income tax purposes, the respective assignee Lender shall, to the extent
legally entitled to do so, provide to the Borrower the appropriate Internal
Revenue Service Forms (and, if applicable, a Section 4.04 Certificate) described
in Section 4.04(b) to the extent such forms would provide a complete exemption
from or reduction in United States withholding tax. To the extent that an
assignment of all or any portion of a Lender's Commitments and related
outstanding Obligations pursuant to Section 1.13 or this Section 12.04(b) would,
at the time of such assignment, result in increased costs under Section 1.10,
2.05 or 4.04 from those being charged by the respective assigning Lender prior
to
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such assignment, then the Borrower shall not be obligated to pay such increased
costs (although the Borrower, in accordance with and pursuant to the other
provisions of this Agreement, shall be obligated to pay any other increased
costs of the type described above resulting from changes after the date of the
respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank and, with prior
notification to the Administrative Agent (but without the consent of the
Administrative Agent or the Borrower), any Lender which is a fund may pledge all
or any portion of its Loans and Notes to its trustee, to a collateral agent or
to another creditor providing credit or credit support to such Lender in support
of its obligations to such trustee, such collateral agent or a holder of such
obligations, or such other creditor as the case may be. No pledge pursuant to
this clause (c) shall release the transferor Lender from any of its obligations
hereunder.
(d) Notwithstanding any other provisions of this Section 12.04 to
the contrary, no transfer or assignment of the interests or obligations of any
Lender hereunder or any grant of participation therein shall be permitted if
such transfer, assignment or grant would require the Borrower to file a
registration statement with the SEC or to qualify the Loans under the "Blue Sky"
laws of any State.
(e) Each Lender initially party to this Agreement hereby
represents, and each Person that became a Lender pursuant to an assignment
permitted by this Section 12.04 will, upon its becoming party to this Agreement,
represent that it is an Eligible Transferee which is in the business of making,
purchasing or investing in extensions of credit of the types made under this
Agreement and that it will make or acquire Loans for its own account, PROVIDED
that subject to the preceding clauses (a), (b) and (d), the disposition of any
promissory notes or other evidences of or interests in Indebtedness held by such
Lender shall at all times be within its exclusive control.
12.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of any Agent or any Lender in exercising any right, power or privilege hereunder
or under any other Credit Document and no course of dealing between any Credit
Party and any Agent or any Lender shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
under any other Credit Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege hereunder or thereunder.
The rights and remedies herein expressly provided are cumulative and not
exclusive of any rights or remedies which any Agent or any Lender would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of any Agent or any
Lender to any other or further action in any circumstances without notice or
demand.
12.06 PAYMENTS PRO RATA. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of any Credit Party
in respect of any Obligations of such Credit Party hereunder, it shall
distribute such payment to the Lenders (other than any Lender that has expressly
waived its right to receive its pro rata share thereof) PRO RATA
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based upon their respective shares, if any, of the Obligations with respect to
which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a proportional participation by all of the Lenders in such
amount, PROVIDED that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 12.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders
and in connection with repayments of Loans pursuant to Section 4.01(b).
12.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders), PROVIDED that (x) except as otherwise
specifically provided herein, all computations of Excess Cash Flow and all
computations determining compliance with Sections 8.11 and 8.12, including
definitions used therein, shall utilize accounting principles and policies in
effect at the time of the preparation of, and in conformity with those used to
prepare, the historical financial statements of the Rexnord Business delivered
to the Lenders pursuant to Section 6.10(b) and (y) if, as a result of any change
after the Effective Date in GAAP, any change in such accounting principles and
policies used in the preparation of such financial statements occurs, then,
following the request of the Borrower, or the Administrative Agent or the
Required Lenders, the parties hereto shall negotiate in good faith modifications
to the definitions, covenants and other provisions of this Agreement relating to
the financial covenant calculations required to be made under this Agreement in
order to reflect the impact and the projected impact of such change on the
consolidated financial position and results of operations of Holdings and its
Subsidiaries (and if an amendment to this Agreement is entered into as
contemplated above in this clause (y), then from and after the date thereof the
computations pursuant to preceding clause (x) of this proviso shall be made in
conformity with the accounting principles and policies referenced in preceding
clause (x), but adjusted to give effect to the changes to GAAP made after the
Effective Date and on or prior to the date of the respective such amendment),
PROVIDED FURTHER, that until such time as any modifications have become
effective as contemplated by clause (y) of the immediately preceding proviso, if
there has been any change after the Effective Date (or the date of the last
amendment effected pursuant to clause (y) of the immediately preceding proviso)
in GAAP, then the
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financial statements furnished to the Lenders pursuant hereto shall be
accompanied by reconciliation worksheets showing the information required to
determine compliance with the provisions referenced in clause (x) of the
immediately preceding proviso.
(b) All computations of interest, Commitment Commission and other
Fees hereunder shall be made on the basis of a year of 360 days (or 365/366 days
in the case of interest on Base Rate Loans based on the Prime Lending Rate) for
the actual number of days.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN THE MORTGAGES OR ANY OTHER SECURITY DOCUMENT, BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE
COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT, EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF HOLDINGS AND
THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS
LACK PERSONAL JURISDICTION OVER HOLDINGS OR THE BORROWER, AND AGREES NOT TO
PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT
SUCH COURTS LACK PERSONAL JURISDICTION OVER HOLDINGS OR THE BORROWER. EACH OF
HOLDINGS AND THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
HOLDINGS OR THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW
UNTIL ANOTHER ADDRESS IS PROVIDED TO THE ADMINISTRATIVE AGENT IN WRITING IN
ACCORDANCE WITH SECTION 12.03, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER
ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE IF IN CONFORMITY WITH THE FOREGOING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF ANY AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST HOLDINGS OR THE BORROWER IN ANY OTHER JURISDICTION.
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(b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.09 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10 EFFECTIVENESS. This Agreement shall become effective on the date
(the "Effective Date") on which Holdings, the Borrower and each of the Lenders
shall have signed a copy hereof (whether the same or different copies) and shall
have delivered the same to the Administrative Agent or, in the case of the
Lenders, shall have given to the Administrative Agent telephonic (confirmed in
writing), written telex or facsimile transmission notice (actually received)
that the same has been signed and mailed to it.
12.11 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12 AMENDMENT OR WAIVER, ETC. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party hereto or thereto and
the Required Lenders (although additional parties may be added to (and annexes
may be modified to reflect such additions), and Subsidiaries of the Borrower may
be released from, the Subsidiaries Guaranty and the Security Documents (in
connection with permitted sales or dispositions of Equity Interests in the
respective Subsidiary Guarantor or Subsidiary Guarantors being released) in
accordance with the provisions hereof and thereof without the consent of the
other Credit Parties party thereto or the Required Lenders), PROVIDED that no
such change, waiver, discharge or termination shall, without the written consent
of each Lender (other than a Defaulting Lender) (with Obligations being directly
adversely affected in the case of following clause (i)), (i) extend, waive or
postpone the final scheduled maturity of any Loan or Note or extend, waive or
postpone the stated expiration date of any Letter of Credit beyond the RF
Maturity Date, or reduce the rate or extend, waive or postpone
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the time of payment of interest or Fees thereon (except in connection with the
waiver of applicability of any post-default increase in interest rates), or
reduce the principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement or to Section
12.07(a) shall not constitute a reduction in the rate of interest or Fees for
the purposes of this clause (i)), (ii) release all or substantially all of the
Collateral under the Security Documents (except as expressly provided in the
Credit Documents (x) in connection with the termination of commitments hereunder
and repayment in full of all amounts owing pursuant hereto and (y) with respect
to permitted sales or dispositions of property), or release all or substantially
all of the Guarantors from the Guaranties (except (x) in connection with the
termination of commitments hereunder and repayment in full of all amounts owing
pursuant hereto and (y) in the case of Subsidiary Guarantors as expressly
provided in the Subsidiaries Guaranty in connection with permitted sales or
dispositions of Equity Interests in the respective Subsidiary Guarantor or
Subsidiary Guarantors being released), (iii) amend, modify or waive any
provision of this Section 12.12 (except for technical amendments with respect to
additional extensions of credit pursuant to this Agreement which afford the
protections to such additional extensions of credit of the type provided to the
Term Loans and the Revolving Commitments on the Effective Date), (iv) reduce the
percentage specified in the definition of Required Lenders (it being understood
that, with the consent of the Required Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of the Required
Lenders on substantially the same basis as the extensions of Term Loans and
Revolving Commitments are included on the Effective Date), (v) consent to the
assignment or transfer by Holdings or the Borrower of any of its rights and
obligations under this Agreement (it being understood that, in each case with
the consent of the Required Lenders, Holdings may be released from the Holdings
Guaranty and the Security Documents to which it is a party in connection with
the consummation of a Qualified Public Offering or after the establishment of
Intermediate Holdco, provided that Intermediate Holdco has taken all action
required by Section 8.07) or (vi) amend, modify or waive any provisions of
Section 12.06(a) providing for payments to be made ratably by the Lenders (it
being understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in determining
any ratable share pursuant to Section 12.06(a) and adjustments to any such
Section may be made consistent therewith); PROVIDED FURTHER, that no such
change, waiver, discharge or termination shall (1) increase the Commitment of
any Lender over the amount thereof then in effect without the consent of such
Lender (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory reduction
in the Total Commitment shall not constitute an increase of the Commitment of
any Lender, and that an increase in the available portion of any Commitment of
any Lender shall not constitute an increase of the Commitment of such Lender),
(2) without the consent of each Letter of Credit Issuer, amend, modify or waive
any provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit, (3) without the consent of the Swingline Lender, alter the
Swingline Lender's rights or obligations with respect to Swingline Loans, (4)
without the consent of the respective Agent, amend, modify or waive any
provision of Section 12 or any other provision as same relates to the rights or
obligations of such Agent, (5) without the consent of Collateral Agent, amend,
modify or waive any provision relating to the rights or obligations of the
Collateral Agent, or (6) reduce the amount of, or extend the date of, any
Scheduled Repayment without the consent of the Supermajority Lenders holding
Term Loans, or amend the definition of Supermajority Lenders without the consent
of the Supermajority Lenders holding Term Loans
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(it being understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Supermajority Lenders on substantially the same basis as
the extensions of Term Loans and Revolving Commitments are included on the
Effective Date). Notwithstanding anything to the contrary contained above, the
provisions of Section 12.18 hereof may be modified (and may only be modified) in
accordance with the express requirements of Section 12.18(b) as originally in
effect.
(b) If, in connection with any proposed change, waiver, discharge
or termination of any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 12.12(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then the
Borrower shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clauses (A) or
(B) below, to either (A) replace each such non-consenting Lender or Lenders with
one or more Replacement Lenders pursuant to Section 1.13 so long as at the time
of such replacement, each such Replacement Lender consents to the proposed
change, waiver, discharge or termination or (B) terminate such non-consenting
Lender's Commitments and/or repay each Facility of outstanding Loans of such
Lender in accordance with Sections 3.02(b) and/or 4.01(b), provided that, unless
the Commitments that are terminated, and Loans repaid, pursuant to preceding
clause (B) are immediately replaced in full at such time through the addition of
new Lenders or the increase of the Commitments and/or outstanding Loans of
existing Lenders (who in each case must specifically consent thereto), then in
the case of any action pursuant to preceding clause (B) the Required Lenders
(determined after giving effect to the proposed action) shall specifically
consent thereto, provided further, that in any event the Borrower shall not have
the right to replace a Lender, terminate its Commitments or repay its Loans
solely as a result of the exercise of such Lender's rights (and the withholding
of any required consent by such Lender) pursuant to the second proviso to
Section 12.12(a).
12.13 SURVIVAL. All indemnities set forth herein including, without
limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.06 or 12.01 shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
12.14 DOMICILE OF LOANS. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, PROVIDED that the Borrower shall not be responsible for costs arising
under Section 1.10, 2.05 or 4.04 resulting from any such transfer (other than a
transfer pursuant to Section 1.12) to the extent not otherwise applicable to
such Lender prior to such transfer (although the Borrower shall be obligated to
pay any other increased costs of the type described above resulting from changes
after the date of the respective transfer).
12.15 CONFIDENTIALITY. Each of the Lenders agrees that it will use its
commercially reasonable efforts not to disclose without the prior consent of the
Borrower (other than to its employees, auditors, counsel or other professional
advisors, to affiliates or to another Lender if the Lender or such Lender's
holding or parent company in its reasonable discretion determines that any such
party should have access to such information) any information with respect to
Holdings or any of its Subsidiaries which is furnished pursuant to this
Agreement; PROVIDED, that any Lender may disclose any such information (a) as
has become generally available to the public, (b) as may be required or
appropriate in any report, statement or
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testimony submitted to any municipal, state or Federal regulatory body having or
claiming to have jurisdiction over such Lender or to the Federal Reserve Board
or the Federal Deposit Insurance Corporation or similar organizations (whether
in the United States or elsewhere) or their successors or to the NAIC, (c) as
may be required or appropriate in response to any summons or subpoena or in
connection with any litigation (notice of which will be promptly sent to the
Borrower to the extent permitted by Law), (d) in order to comply with any law,
order, regulation or ruling applicable to such Lender, and (e) to any
prospective transferee in connection with any contemplated transfer of any of
the Notes or any interest therein by such Lender; PROVIDED, that such
prospective transferee is notified of the confidentiality requirements relating
thereto and (f) to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisors; PROVIDED,
that such contractual counterparty or such contractual counterparty's
professional advisors, as the case may be, is notified of the confidentiality
requirements relating thereto. No Lender shall be obligated or required to
return any materials furnished by Holdings or any Subsidiary. Holdings and the
Borrower hereby agree that the failure of a Lender to comply with the provisions
of this Section 12.15 shall not relieve the Credit Parties of any of their
obligations to such Lender under this Agreement and the other Credit Documents.
12.16 LENDER REGISTER. The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for purposes of
this Section 12.16, to maintain a register (the "Lender Register") on which it
will record the Commitments from time to time of each of the Lenders, the Loans
made by each of the Lenders and each repayment in respect of the principal
amount of the Loans of each Lender. Failure to make any such recordation, or any
error in such recordation shall not affect the Borrower's obligations in respect
of such Loans. With respect to any Lender, the transfer of the Commitments of
such Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Lender Register maintained by the Administrative Agent with
respect to ownership of such Commitments and Loans and prior to such recordation
all amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of assignment or transfer
of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Lender Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment Agreement
pursuant to Section 12.04(b). The Borrower agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this Section
12.16 (but excluding such losses, claims, liabilities or liabilities incurred by
reason of the Administrative Agent's gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable
decision)). The Lender 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.
12.17 ACQUISITION OF CHANGZHOU XXXXXX JIANGLANG TRANSMISSIONS CO. LTD
AND XXXXX XXXXXX S.A.. Notwithstanding anything to the contrary contained in the
Credit Agreement, it is understood and agreed that the acquisition of Changzhou
Xxxxxx Jianglang Transmissions Co. Ltd and Xxxxx Xxxxxx S.A. pursuant to the
Acquisition shall not be required to be consummated on the Initial Borrowing
Date, and if either such acquisition is not consummated on such date such
acquisition may later be consummated following (i) in the case
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of the acquisition of Changzhou Xxxxxx Jianglang Transmissions Co. Ltd, the
receipt by Changzhou Xxxxxx Jianglang Transmissions Co. Ltd of the approval of
the Wujin Foreign Economic Relations and Trade Commission so long as no further
consideration is paid therefor and (ii) in the case of Xxxxx Xxxxxx S.A., the
receipt by Rexnord France Holdings SAS of the approval of the Director General
of Competition, Consumer Affairs, and Repression of Frauds so long as the
aggregate purchase price therefor does not exceed $13,000,000. In the event that
either such acquisition is consummated after the Initial Borrowing Date as
contemplated above, the Borrower shall be permitted to make an intercompany loan
to Rexnord France Holdings SAS and a subsequent sale of such loan to Rexnord
Finance BV in exchange for an intercompany loan on substantially the same term
to effect such acquisition, provided that the aggregate principal amount of any
such intercompany loan made to Rexnord France Holdings SAS shall not exceed
$13,000,000.
12.18 LIMITATION ON CERTAIN ENFORCEMENT ACTIONS. (a) The Agents and
the Lenders hereby acknowledge and agree that, notwithstanding anything to the
contrary contained herein or in any other Credit Document, none of the following
actions shall be taken without the prior written consent of each Agent (if any)
who would have a voting percentage of at least 5% in determining the Required
Lenders at such time: (A) the purchase or other acquisition of any direct
ownership interest by any Agent (in such capacity or on behalf of any or all of
the Secured Creditors) or any Lender or Lenders (except as a result of any
purchase by one or more Lenders in their individual capacities pursuant to a
foreclosure sale) of any Equity Interests of any of Rexnord North America
Holding, Inc. or Clarkson Industries, Inc.; (B) the exercise of any voting
rights by any Agent (in such capacity or behalf of any or all of the Secured
Creditors) or any Lender or Lenders (except following any purchase by one or
more Lenders in their individual capacities pursuant to a foreclosure sale) with
respect to the Equity Interests of any of Rexnord North America Holdings, Inc.
or Clarkson Industries, Inc.; or (C) the purchase or other acquisition of any
direct ownership interest by any Agent (in such capacity or on behalf of the
Secured Creditors) or any Lender or Lenders (except as a result of any purchase
by one or more Lenders in their individual capacities pursuant to a foreclosure
sale) in any of the real property listed as items 1, 2, 4, 11 and 13 on Schedule
III, whether through purchase upon foreclosure of any lien granted to the
Administrative Agent for the benefit of the Secured Parties under the Security
Agreement or any Mortgage or otherwise.
(b) It is acknowledged and agreed by all parties hereto that
provisions of this Section 12.18 are solely for the benefit of the Agents and
Lenders (and not the Borrower or any other Credit Party), and, that
notwithstanding anything to the contrary contained herein, the provisions hereof
may be modified, waived or amended only with the consent of the Required Lenders
and each Agent (if any) who would have a voting percentage of at least 5% in
determining Required Lenders at such time, with no consent of any Credit Party
being required in connection with any modification, amendment or waiver of the
provisions of this Section 12.18 effected in accordance with the preceding
portion of this sentence.
SECTION 13. HOLDINGS GUARANTY.
13.01 THE GUARANTY. In order to induce the Lenders to enter into this
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Holdings from the proceeds of the Loans and the
issuance of the Letters of Credit, Holdings
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hereby unconditionally and irrevocably guarantees, as primary obligor and not
merely as surety the full and prompt payment when due, whether upon maturity,
acceleration or otherwise, of any and all of the Guaranteed Obligations. If any
of the Guaranteed Obligations becomes due and payable hereunder, Holdings
unconditionally promises to pay such indebtedness to the Guaranteed Creditors,
on demand, together with any and all expenses which may be actually incurred by
the Guaranteed Creditors in collecting any of the Guaranteed Obligations. If
claim is ever made upon any Guaranteed Creditor for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of said amount by
reason of (i) any judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property or (ii) any
settlement or compromise of any such claim effected by such payee with any such
claimant (including the Borrower), then and in such event Holdings agrees that
any such judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation of this Guaranty or any other
instrument evidencing any liability of the Borrower, and Holdings shall be and
remain liable to the aforesaid payees hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such payee.
13.02 BANKRUPTCY. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
to the Guaranteed Creditors whether or not due or payable by the Borrower upon
the occurrence in respect of the Borrower of any of the events specified in
Section 9.05, and unconditionally promises to pay such indebtedness on demand,
in Dollars.
13.03 NATURE OF LIABILITY. The liability of Holdings hereunder is
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations whether executed by Holdings, any other guarantor or by
any other party, and the liability of Holdings hereunder is not affected or
impaired by (a) any direction as to application of payment by the Borrower or by
any other party, or (b) any other continuing or other guaranty, undertaking or
maximum liability of a guarantor or of any other party as to the Guaranteed
Obligations, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Guaranteed
Creditors on the Guaranteed Obligations which any such Guaranteed Creditor
repays to the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
Holdings waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding.
13.04 INDEPENDENT OBLIGATION. The obligations of Holdings hereunder
are independent of the obligations of any other guarantor, any other party or
the Borrower, and a separate action or actions may be brought and prosecuted
against Holdings whether or not action is brought against any other guarantor,
any other party or the Borrower and whether or not any other guarantor, any
other party or the Borrower be joined in any such action or actions. Holdings
waives, to the full extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement hereof. Any
payment by the Borrower or other circumstance which operates to toll any statute
of limitations as to the Borrower shall operate to toll the statute of
limitations as to Holdings.
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13.05 AUTHORIZATION. Holdings authorizes the Guaranteed Creditors
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed, increased or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors,
the Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may substitute the
payment of all or any part thereof to the payment of any liability (whether due
or not) of the Borrower to its creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors regardless
of what liability or liabilities of the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise amend,
modify or supplement this Agreement, any other Credit Document or any of such
other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Guaranty.
13.06 RELIANCE. It is not necessary for the Guaranteed Creditors to
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on its behalf, and any Guaranteed
Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
13.07 SUBORDINATION. Any of the indebtedness of the Borrower now or
hereafter owing to Holdings is hereby subordinated to the Guaranteed Obligations
of the Borrower; and if
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the Administrative Agent so requests at a time when an Event of Default exists,
all such indebtedness of the Borrower to Holdings shall be collected, enforced
and received by Holdings for the benefit of the Guaranteed Creditors and be paid
over to the Administrative Agent on behalf of the Guaranteed Creditors on
account of the Guaranteed Obligations, but without affecting or impairing in any
manner the liability of Holdings under the other provisions of this Guaranty.
Prior to the transfer by Holdings of any note or negotiable instrument
evidencing any of the indebtedness of the Borrower to Holdings, Holdings shall
xxxx such note or negotiable instrument with a legend that the same is subject
to this subordination. Without limiting the generality of the foregoing,
Holdings hereby agrees with the Guaranteed Creditors that it will not exercise
any right of subrogation which it may at any time otherwise have as a result of
this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
13.08 WAIVER. (a) Holdings waives any right (except as shall be
required by applicable statute and cannot be waived) to require any Guaranteed
Creditor to (i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor's power whatsoever. Holdings waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any other
party, other than payment in full of the Guaranteed Obligations, based on or
arising out the disability of the Borrower, any other guarantor or any other
party, or the unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
other than payment in full of the Guaranteed Obligations. The Guaranteed
Creditors may, at their election, foreclose on any security held by the
Collateral Agent or any other Guaranteed Creditor by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by applicable law), or exercise
any other right or remedy the Guaranteed Creditors may have against the Borrower
or any other party, or any security, without affecting or impairing in any way
the liability of Holdings hereunder except to the extent the Guaranteed
Obligations have been paid.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
Guaranteed Obligations. Holdings assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances, bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which Holdings assumes
and incurs hereunder, and agrees that the Guaranteed Creditors shall have no
duty to advise Holdings of information known to them regarding such
circumstances or risks.
13.09 ENFORCEMENT. The Guaranteed Creditors agree that this Guaranty
may be enforced only by the action of the Administrative Agent or the Collateral
Agent, in each case acting upon the instructions of the Required Lenders and no
Guaranteed Creditor shall have any right individually to seek to enforce or to
enforce this Guaranty or to realize upon the security to be granted by the
Security Documents, it being understood and agreed that such rights and remedies
may be exercised by the Administrative Agent or the Collateral Agent for the
benefit of the Guaranteed Creditors upon the terms of this Guaranty and the
Security Documents.
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
RBS GLOBAL, INC.
By /s/
----------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
REXNORD CORPORATION
By /s/
----------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President & CFO
DEUTSCHE BANK TRUST COMPANY
AMERICAS, Individually and as Administrative
Agent
By /s/
----------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
DEUTSCHE BANK SECURITIES INC.,
as a Joint Lead Arranger
By /s/
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
By /s/
----------------------------
Name: Xxxx [illegible]
Title: MD
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GENERAL ELECTRIC CAPITAL
CORPORATION, Individually and as Co-
Documentation Agent
By /s/
----------------------------
Name: Laurent Paris, VP
Title: Duly Authorized Signatory
WACHOVIA BANK, NATIONAL
ASSOCIATION, Individually and as Co-
Documentation Agent
By /s/
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Director
CREDIT SUISSE FIRST BOSTON, acting through
its Cayman Islands Branch, Individually and
as a Joint Lead Arranger
By /s/
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
By /s/
----------------------------
Name: Xxxx X. Xxxxxxx
Title: Director
CREDIT LYONNAIS NEW YORK BRANCH
By /s/
----------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: VP
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M&I XXXXXXXX & XXXXXX BANK
By /s/
----------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By /s/
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
TRANSAMERICA BUSINESS CAPITAL
CORPORATION
By /s/
----------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President
CIT LENDING SERVICES CORPORATION
By /s/
----------------------------
Name: Xxxx X. Xxxxxx, XX
Title: Vice President
NATIONAL CITY BANK
By /s/
----------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Account Officer
PROTECTIVE LIFE INSURANCE COMPANY
By /s/
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: AVP
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SCHEDULE I
COMMITMENTS
Term Revolving
Lender Commitment Commitment
------ ---------- ----------
Deutsche Bank Trust Company
Americas $______________ $______________
Credit Suisse First Boston, acting
through its Cayman Islands Branch $______________ $______________
$______________ $______________
Total: $360,000,000.00 $75,000,000.00
============== =============
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SCHEDULE II
LENDER ADDRESSES
