CREDIT AGREEMENT
Dated as of February 1, 2000
among
MSC INDUSTRIAL DIRECT CO., INC.,
The Banks signatory hereto,
THE CHASE MANHATTAN BANK, as Syndication Agent,
and
FLEET BANK, NATIONAL ASSOCIATION
as Administrative Agent and as Issuing Bank
arranged by
FLEET BANK, NATIONAL ASSOCIATION and CHASE SECURITIES, INC.,
As Co-lead Arrangers
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS_______________________________________1
Section 1.1. Definitions._________________________________________________1
Section 1.2. Accounting Terms.___________________________________________20
Section 1.3. Interpretation._____________________________________________20
ARTICLE 2. THE LOANS__________________________________________________________20
Section 2.1. The Loans Generally.________________________________________20
Section 2.2. The Notes.__________________________________________________22
Section 2.3. Use of Proceeds.____________________________________________22
Section 2.4. Borrowing Procedures for Revolving Credit Loans and
Term Loans._________________________________________________23
Section 2.5. Bid Procedure.______________________________________________23
Section 2.6. Interest on Loans.__________________________________________26
Section 2.7. Reductions in Revolving Credit Commitments._________________26
Section 2.8. Adjustments to Applicable Margin and Applicable
Unused Percentage.__________________________________________27
ARTICLE 3. LETTERS OF CREDIT__________________________________________________27
Section 3.1. Agreement to Issue._________________________________________27
Section 3.2. Amounts; Tenor._____________________________________________27
Section 3.3. Conditions._________________________________________________28
Section 3.4. Issuance of Letters of Credit.______________________________29
Section 3.5. Letter of Credit Obligations; Duties of Issuing Bank._______29
Section 3.6. Participations._____________________________________________30
Section 3.7. Payment of Letter of Credit Reimbursement Obligations.______31
Section 3.8. Indemnification; Exoneration._______________________________32
Section 3.9. Prior Letters of Credit and Sid Tool Letters of Credit._____33
ARTICLE 4. GENERAL CREDIT PROVISIONS;_________________________________________33
Section 4.1. Certain Notices.____________________________________________33
Section 4.2. Prepayments.________________________________________________34
Section 4.3. Agency and Arranger Fees.___________________________________35
Section 4.4. Unused Fee; Origination Fee.________________________________35
Section 4.5. Compensation for Letters of Credit._________________________35
Section 4.6. Payments Generally._________________________________________36
Section 4.7. Conversion and Continuation of Revolving Credit Loans.______38
- i -
ARTICLE 5. YIELD PROTECTION, ETC._____________________________________________40
Section 5.1. Additional Costs.___________________________________________40
Section 5.2. Limitation on Types of Loans._______________________________42
Section 5.3. Illegality._________________________________________________42
Section 5.4. Certain Loans Pursuant To Sections 5.1, 5.2 and 5.3.________43
Section 5.5. Certain Compensation._______________________________________43
ARTICLE 6. CONDITIONS PRECEDENT_______________________________________________44
Section 6.1. Initial Conditions Precedent._______________________________44
Section 6.2. Additional Conditions Precedent.____________________________47
Section 6.3. No Default Certificate and Deemed Representations.__________48
ARTICLE 7. REPRESENTATIONS AND WARRANTIES_____________________________________48
Section 7.1. Incorporation, Good Standing and Due Qualification;
Compliance with Law.________________________________________48
Section 7.2. Power and Authority; No Conflicts.__________________________49
Section 7.3. Legally Enforceable Agreements._____________________________49
Section 7.4. Litigation._________________________________________________49
Section 7.5. Financial Statements._______________________________________50
Section 7.6. Ownership and Liens.________________________________________50
Section 7.7. Taxes.______________________________________________________50
Section 7.8. ERISA.______________________________________________________51
Section 7.9. Subsidiaries and Ownership of Stock.________________________51
Section 7.10. Credit Arrangements.________________________________________51
Section 7.11. Operation of Business.______________________________________52
Section 7.12. No Default on Outstanding Judgments or Orders.______________52
Section 7.13. No Defaults on Other Agreements.____________________________53
Section 7.14. Labor Disputes and Acts of God._____________________________53
Section 7.15. Governmental Regulation.____________________________________53
Section 7.16. Partnerships._______________________________________________53
Section 7.17. No Forfeiture Proceedings.__________________________________53
Section 7.18. No Default or Event of Default._____________________________54
Section 7.19. Solvency.___________________________________________________54
Section 7.20. Material Adverse Change.____________________________________54
Section 7.21. Name._______________________________________________________54
- ii -
Section 7.22. Debt._______________________________________________________54
Section 7.23. Nature of Business._________________________________________54
Section 7.24. Fiscal Year End.____________________________________________55
Section 7.25. Environmental Matters.______________________________________55
Section 7.26. Year 2000 Issue.____________________________________________56
ARTICLE 8. AFFIRMATIVE COVENANTS______________________________________________57
Section 8.1. Maintenance of Existence.___________________________________57
Section 8.2. Conduct of Business.________________________________________57
Section 8.3. Maintenance of Properties.__________________________________57
Section 8.4. Maintenance of Records._____________________________________57
Section 8.5. Maintenance of Insurance.___________________________________57
Section 8.6. Compliance with Laws._______________________________________58
Section 8.7. Right of Inspection.________________________________________58
Section 8.8. Reporting Requirements._____________________________________58
Section 8.9. Payment of Obligations._____________________________________62
Section 8.10. Affiliate Guarantee.________________________________________62
Section 8.11. Notices With Respect to Certain Debts.______________________62
Section 8.12. Use of Proceeds.____________________________________________62
Section 8.13. Solvency.___________________________________________________62
Section 8.14. Additional Subsidiary Guarantees and Other Subsidiary
Guarantee Issues.___________________________________________62
Section 8.15. Indemnity (Environmental Matters).__________________________63
Section 8.16. Year 2000 Issue.____________________________________________63
ARTICLE 9. NEGATIVE COVENANTS_________________________________________________63
Section 9.1. Debt._______________________________________________________63
Section 9.2. Liens.______________________________________________________64
Section 9.3. Investments.________________________________________________65
Section 9.4. Sale of Assets._____________________________________________66
Section 9.5. Transactions with Affiliates._______________________________67
Section 9.6. Mergers, Etc._______________________________________________67
Section 9.7. Acquisitions._______________________________________________67
Section 9.8. No Activities Leading to Forfeiture.________________________68
Section 9.9. Corporate Documents; Fiscal Year.___________________________68
- iii -
Section 9.10. Redemptions, Etc.___________________________________________68
Section 9.11. Creation of Subsidiaries, etc.______________________________68
Section 9.12. Real Estate Loans to Affiliates.____________________________68
Section 9.13. Loans to Affiliates; Distributions._________________________68
Section 9.14. Broker's Fees.______________________________________________69
Section 9.15. Dividends.__________________________________________________69
Section 9.16. Nature of Business._________________________________________69
ARTICLE 10. FINANCIAL COVENANTS_______________________________________________69
Section 10.1. Minimum Effective Net Worth.________________________________69
Section 10.2. Quick Ratio.________________________________________________69
Section 10.3. Maximum Leverage.___________________________________________70
Section 10.4. Maximum Cash Flow Coverage Ratio.___________________________70
Section 10.5. Minimum Interest Coverage Ratio.____________________________70
Section 10.6. Positive Earnings.__________________________________________70
ARTICLE 11. EVENTS OF DEFAULT_________________________________________________70
Section 11.1. Events of Default.__________________________________________70
Section 11.2. Remedies.___________________________________________________73
ARTICLE 12. THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT AND THE ISSUING
BANK;RELATIONS AMONG BANKS________________________________________73
Section 12.1. Appointment, Powers and Immunities of Agents; Certain
Other Matters.______________________________________________73
Section 12.2. Reliance by Administrative Agent and Issuing Bank.__________74
Section 12.3. Defaults.___________________________________________________75
Section 12.4. Rights of Administrative Agent, the Syndication Agent and
Issuing Bank._______________________________________________75
Section 12.5. Indemnification of Administrative Agent, Syndication
Agent, Issuing Bank and Arrangers.__________________________76
Section 12.6. Documents.__________________________________________________76
Section 12.7. Non-Reliance on Administrative Agent, Syndication Agent,
Arrangers, Issuing Bank and Other Banks.____________________77
Section 12.8. Failure of Administrative Agent or the Issuing Bank to Act._77
Section 12.9. Resignation or Removal of Administrative Agent or
Syndication Agent.__________________________________________78
Section 12.10. Amendments Concerning Agency, Arrangement and Issuing
Bank Function.______________________________________________78
Section 12.11. Liability of Agents, Issuing Bank and Banks.________________79
- iv -
Section 12.12. Transfer of Agency Function.________________________________79
Section 12.13. Non-Receipt of Funds by the Administrative Agent.___________79
Section 12.14. Withholding Taxes.__________________________________________79
Section 12.15. Several Obligations and Rights of Banks.____________________80
Section 12.16. Pro Rata/Non Pro Rata Treatment of Loans.___________________81
Section 12.17. Sharing of Payments Among Banks.____________________________81
ARTICLE 13. MISCELLANEOUS_____________________________________________________82
Section 13.1. Amendments and Waivers.______________________________________82
Section 13.2. Usury._______________________________________________________83
Section 13.3. Expenses.____________________________________________________83
Section 13.4. Survival.____________________________________________________84
Section 13.5. Assignment; Participation.___________________________________84
Section 13.6. Special Provisions with Respect to Equity Investments
and Acquisitions.____________________________________________85
Section 13.7. Notices._____________________________________________________86
Section 13.8. Setoff.______________________________________________________87
Section 13.9. JURISDICTION; WAIVER OF JURY TRIAL; IMMUNITIES.______________87
Section 13.10. Table of Contents; Headings._________________________________88
Section 13.11. Severability._______________________________________________88
Section 13.12. Counterparts._______________________________________________88
Section 13.13. Integration.________________________________________________89
Section 13.14. Governing Law.______________________________________________89
Section 13.15. Treatment of Certain Information.___________________________89
Section 13.16. Further Rights of the Administrative Agent._________________90
Section 13.17. Lost Notes._________________________________________________90
- v -
EXHIBITS AND SCHEDULES
Exhibits
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Term Note
Exhibit B-1 Form of Bid Request
Exhibit B-2 Form of Bid
Exhibit B-3 Form of Bid Acceptance/Rejection
Exhibit C Form of Subsidiary Guaranty
Exhibit D Form of Oinion of Borrower's Counsel
Exhibit E-1 Form of Notice of Borrowing
Exhibit E-2 Form of Notice of Conversion/Continuation
Schedules:
Schedule 7.1 Exceptions to Due Incorporation, Good Standing and Due
Qualification; Compliance with Law
Schedule 7.2 Exceptions to Power and Authority; No Conflicts
Schedule 7.4 Pending and Threatened Litigation
Schedule 7.8 ERISA
Schedule 7.9 Subsidiaries
Schedule 7.10 Debt Agreements and Liens
Schedule 7.16 Partnerships
Schedule 7.17 Forfeiture Proceedings
Schedule 7.21 Trade Names and Trade Styles
Schedule 7.25 Environmental
- vi -
CREDIT AGREEMENT dated as of February 1, 2000, among MSC INDUSTRIAL DIRECT
CO., INC., a corporation organized under the laws of New York (the "Borrower"),
each of the banks now or hereafter parties hereto, THE CHASE MANHATTAN BANK
("Chase"), as syndication agent (in such capacity, together with its successors
in such capacity, the "Syndication Agent"), and FLEET BANK, NATIONAL ASSOCIATION
("Fleet"), as administrative agent for the Banks (in such capacity, together
with its successors in such capacity, the "Administrative Agent") and as issuing
bank (in such capacity, together with its successors in such capacity, the
"Issuing Bank").
W I T N E S S E T H:
WHEREAS, the Borrower, certain banks parties thereto (the "Prior Banks")
and the Administrative Agent entered into a Credit Agreement dated as of June
12, 1997, (the "Prior Credit Agreement"), pursuant to which the Prior Banks made
certain financial accommodations thereunder on the terms and subject to the
conditions contained therein; and
WHEREAS, the Borrower intends (a) to finance (i) its working capital and
Capital Expenditures needs and the working capital and Capital Expenditures
needs of its Consolidated Subsidiaries (as defined below) and (ii) Permitted
Acquisitions by the Borrower and any of its Acquisition Subsidiaries and (b) to
refinance revolving credit loans made to the Borrower under the Prior Credit
Agreement, in each such case by obtaining Loans and the issuance of Letters of
Credit for the account of the Borrower and on behalf of the Borrower and its
Subsidiaries; and
WHEREAS, the Borrower has requested the Banks to provide a commitment to
make Loans to the Borrower and issue Letters of Credit; and
WHEREAS, the Banks are willing to make such Loans and the Issuing Bank is
willing to issue such Letters of Credit on the terms and subject to the
conditions contained herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS
Section 1.1. Definitions.
As used in this Agreement, "Administrative Agent," "Borrower," "Chase,"
"Fleet," "Issuing Bank" and "Syndication Agent" shall have the meaning provided
therefor in the introductory paragraph to this Agreement and the following terms
have the following meanings (terms defined in the singular to have a correlative
meaning when used in the plural and vice versa):
"Acquisition" means (i) the acquisition by purchase or otherwise of the
business or assets of or Capital Stock of another Person whereby, after giving
effect thereto, the acquiror has the power to direct the management of the
Person so acquired or the acquiror has the power to direct at least a majority
of the voting interests of the Capital Stock of the Person so acquired or (ii) a
Joint Venture Acquisition.
"Acquisition Cost" means with respect to any Permitted Acquisition,
without duplication, the sum of (i) all cash consideration paid or agreed to be
paid by the acquiror to make such Acquisition (inclusive of payments by such
Person of the seller's professional fees and expenses and other out-of-pocket
costs and/or expenses in connection therewith), plus (ii) the fair market value
of all non-cash consideration paid by such Person in connection therewith, plus
(iii) an amount equal to the principal or stated amount of all liabilities
assumed or incurred by such Person in connection therewith, plus (iv) the
maximum amount of any purchase price to be paid pursuant to any "earn out" or
similar provision contained in the documents related to such Acquisition, plus
(v) any deferred portion of the purchase price related to such Acquisition,
including without limitation consulting arrangements, non-compete arrangements
and other similar arrangements, plus (vi) any optional or mandatory capital
contributions made to such entity by such Person, plus (vii) the amount of all
Investments in Acquisition Subsidiaries with respect to such Permitted
Acquisition, plus (viii) the amount of all Investments in any Person that is the
subject of such Permitted Acquisition, plus (ix) the amount of all other
Investments made in connection with such Permitted Acquisition. The principal or
stated amount of any liability assumed or incurred by an acquiror in connection
with an Acquisition which is a contingent liability shall be an amount equal to
the stated amount of such liability or, if the same is not stated, the maximum
reasonably anticipated amount payable by such Person in respect thereof as
determined by such Person in good faith. For purposes of determining the
Acquisition Cost, any amounts within items (vii), (viii), or (ix) above that are
part of the consideration for a Permitted Acquisition and included in items (i)
or (vi) above, shall only be included once.
"Acquisition Subsidiary" means each now or hereafter acquired or
established Subsidiary of the Borrower that, pursuant to and subject to the
limitations of Section 13.6 hereof, may make Permitted Acquisitions and
Permitted Equity Investments.
"Additional Costs" shall have the meaning given to that term in Article 5
hereof.
"Adjusted Aggregate Outstandings" means, without duplication, at a
particular time, the sum of (a) the Aggregate Letter of Credit Outstandings at
such time, plus (b) the Aggregate Revolving Credit Loans Outstandings at such
time.
"Adjustment Amount" means, with respect to any fiscal quarter of the
Borrower, 50% of the Borrower's Net Income for such fiscal quarter. If with
respect to any fiscal quarter the Borrower has Net Income of less than zero, the
Adjustment Amount shall be deemed zero for such fiscal quarter.
- 2 -
"Affiliate" means any Person: (a) which directly or indirectly controls,
or is controlled by, or is under common control with, the Borrower; (b) which
directly or indirectly beneficially owns or holds 5% or more of any class of
voting stock of the Borrower; (c) 5% or more of the voting stock of which is
directly or indirectly beneficially owned or held by the Borrower; or (d) which
is a partnership in which the Borrower is a general partner. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.
"Affiliate Advances" means all amounts due at any time and from time to
time from Affiliates of the Borrower and/or Affiliates of any Subsidiary of the
Borrower to the extent that such amounts are included in the determination of
Total Assets.
"Aggregate Bid Loan Outstandings" means, at a particular time, the
aggregate principal amount of the Borrower's obligations to the Banks, or any of
them, in connection with Bid Loans.
"Aggregate Letter of Credit Outstandings" means, at a particular time, the
sum of (a) the aggregate maximum amount then available or available in the
future to be drawn under all Letters of Credit outstanding and all Prior Letters
of Credit and all Sid Tool Letters of Credit at such time plus (b) the aggregate
amount of any payments made by the Issuing Bank or any Bank under, or with
respect to, any Letter of Credit, any Prior Letter of Credit or any Sid Tool
Letter of Credit that has not theretofore been reimbursed by or on behalf of the
Borrower or one or more of its Subsidiaries.
"Aggregate Outstandings" means, without duplication, at a particular time,
the sum of (a) the Aggregate Letter of Credit Outstandings at such time, plus
(b) the Aggregate Revolving Credit Loans Outstandings at such time, plus (c) the
Aggregate Bid Loan Outstandings at such time, plus (d) the Aggregate Term Loan
Outstandings.
"Aggregate Revolving Credit Loans Outstandings" means, at a particular
time, the aggregate principal amount of the Borrower's obligations to the Banks,
or any of them, in connection with Revolving Credit Loans.
"Aggregate Revolver Outstandings" means, without duplication, at a
particular time, the sum of (a) the Aggregate Letter of Credit Outstandings at
such time, plus (b) the Aggregate Revolving Credit Loans Outstandings at such
time, plus (c) the Aggregate Bid Loan Outstandings at such time.
"Aggregate Term Loan Outstandings" means, at a particular time, the
aggregate principal amount of the Borrower's obligations to the Banks, or any of
them, in connection with Term Loans.
"Agreement" means this Credit Agreement, as amended or supplemented from
time to time. References to Articles, Sections, Exhibits, Schedules and the like
refer to
- 3 -
the Articles, Sections, Exhibits, Schedules and the like of this Agreement
unless otherwise indicated.
"Applicable Margin" means, with respect to BA Rate Loans and LIBOR Loans,
(i) if the ratio of Total Senior Debt to EBITDA is less than 1.00:1.00, 0.65%;
(ii) if the ratio of Total Senior Debt to EBITDA is equal to or greater than
1.00:1.00 but less than 1.50:1.00, 0.75%; (iii) if the ratio of Total Senior
Debt to EBITDA is equal to or greater than 1.50:1.00 but less than 2.00:1.00,
1.00%; and (iv) if the ratio of Total Senior Debt to EBITDA is equal to or
greater than 2.00:1.00, 1.25%. Nothing contained in this definition of
"Applicable Margin" shall affect the rights of the Banks under Article 11 of
this Agreement.
"Applicable Unused Percentage" means, with respect to the Unused Fee, (i)
if the ratio of Total Senior Debt to EBITDA is less than 1.00:1.00, 0.150%; (ii)
if the ratio of Total Senior Debt to EBITDA is equal to or greater than
1.00:1.00 but less than 1.50:1.00, 0.175%; (iii) if the ratio of Total Senior
Debt to EBITDA is equal to or greater than 1.50:1.00 but less than 2.00:1.00,
0.200%; and (iv) if the ratio of Total Senior Debt to EBITDA is equal to or
greater than 2.00:1.00, 0.225%. Nothing contained in this definition of
"Applicable Unused Percentage" shall affect the rights of the Banks under
Article 11 of this Agreement.
"Arranger" means Chase Securities, Inc. or Fleet Bank, National
Association, each as a co-lead arranger, together with their successors in such
capacity.
"Arrangers" means Chase Securities, Inc. and Fleet Bank, National
Association, collectively as co-lead arrangers, together with their successors
in such capacity.
"Banking Day" means any day on which commercial banks are not authorized
or required to close in New York City and whenever such day relates to a LIBOR
Loan or notice with respect to any LIBOR Loan, such a day on which dealings in
Dollar deposits are also carried out in the London interbank market.
"Banks" means each Bank listed on the signature pages hereof under the
caption "Banks" and any of their permitted assigns pursuant to Section 13.5
hereof, and any successors of any of the foregoing and any other financial
institution that becomes a party hereto as a "Bank."
"BA Rate" means, with respect to any Borrowing consisting of BA Rate
Loans, the higher of the rates per annum quoted by Fleet and Chase (each in its
capacity as a Bank) at approximately 11:00 a.m. (New York time), as determined
by the Administrative Agent, on the first day of the Interest Period for such
Borrowing for the acceptance of drafts having a maturity and in a face amount
comparable to such Interest Period and principal amount of the BA Rate Loan to
be made by Fleet or Chase, as the case may be, each in its capacity as a Bank
with respect to such Borrowing.
- 4 -
"BA Rate Loan" means any Revolving Credit Loan or Term Loan when and to
the extent the interest rate therefor is based on the BA Rate.
"Base Rate" means that rate of interest from time to time announced by the
entity which is the Administrative Agent at the Principal Office as its prime
commercial lending rate. The Base Rate is a reference rate and does not
necessarily represent the lowest or best rate being charged to any customer.
"Base Rate Loan" means any Loan when and to the extent the interest rate
therefor is based on the Base Rate.
"Bid" means an offer by a Bank to make a Bid Loan pursuant to Section 2.5
hereof substantially in the form of Exhibit B-2 hereto.
"Bid Acceptance/Rejection" means a notification made by the Borrower
pursuant to Section 2.5 hereof substantially in the form of Exhibit B-3 hereto.
"Bid Loan" means a Loan made pursuant to the bidding procedure described
in Section 2.5 hereof. Each Bid Loan shall be a Fixed Rate Loan unless otherwise
provided by Article 5, Article 11 or any other applicable provisions of this
Agreement.
"Bid Request" means a request made pursuant to Section 2.5 hereof
substantially in the form of Exhibit B-1 hereto.
"Borrowing" means the aggregate amount of Revolving Credit Loans and/or
Term Loans to be made by the Banks, or any of them, to the Borrower pursuant to
any one Notice of Borrowing.
"Capital Expenditures" means expenditures by the Borrower and the
Borrower's Consolidated Subsidiaries for any fixed assets or improvements,
replacements, substitutions, or additions thereto which have a useful life of
more than one (1) year and which would be treated as capital expenditures under
GAAP including, but not limited to, payments under any Capital Leases.
"Capital Lease" means any lease which has been capitalized on the balance
sheet of the lessee in accordance with GAAP.
"Capital Stock" shall mean, as to any Person, all shares, interests,
partnership interests, limited liability company interests, participations,
rights in or other equivalents (however designated) of such Person's equity
(however designated) and any rights, warrants or options exchangeable for or
convertible into such shares, interests, participations, rights or other equity.
"Change of Control" means a change in the composition of the Managing
Person of the Borrower shall have occurred in which the individuals who
constituted the Managing Person of the Borrower at the beginning of the two year
period immediately
- 5 -
preceding such change (together with any other director whose election by the
Managing Person of the Borrower or whose nomination for election by the
shareholders of the Borrower was approved by a vote of at least two-thirds of
the members of such Managing Person then in office who either were members of
such Managing Person at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the members of such Managing Person then in office.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, with respect to each Bank, the Revolving Credit
Commitment, the Term Loan Commitment and the obligation of such Bank to
otherwise extend credit to the Borrower hereunder in the aggregate principal
amounts listed on the signature pages hereof with respect to such Bank under the
column "Total Commitment" or in the assignment agreement pursuant to which such
Bank became a "Bank" hereunder in accordance with Section 13.5 hereof (as such
amounts may be reduced or otherwise modified from time to time as provided in
this Agreement).
"Commitment Proportion" means, with respect to each Bank at the time of
determination, that proportion that its Commitment bears to the Total
Commitment.
"Consolidated Subsidiary" means any Subsidiary of any Person the financial
statements of which are, or should be, consolidated with the financial
statements of such Person in accordance with GAAP.
"Debt" means, with respect to any Person (without duplication): (a)
indebtedness of such Person for borrowed money; (b) indebtedness for the
deferred purchase price of property or services; (c) Unfunded Vested Liabilities
of such Person; (d) the face amount of any outstanding letters of credit issued
for the account or upon the application of such Person and any unreimbursed
amounts owing with respect to any such letters of credit; (e) obligations
arising under acceptance facilities; (f) guaranties, endorsements (other than
for collection in the ordinary course of business) and other contingent
obligations to purchase, to provide funds for payment, to supply funds to invest
in any Person, or otherwise to assure a creditor against loss; (g) obligations
secured by any Lien on property of such Person; (h) obligations of such Person
as lessee under Capital Leases; and (i) indebtedness of such Person evidenced by
a note, bond, indenture or similar instrument.
"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.
"Default Rate" means, with respect to any Loan, a rate per annum equal to
2% plus the rate of interest otherwise (assuming no Event of Default has
occurred and is continuing) applicable to the relevant Loan and, with respect to
each Letter of Credit, a
- 6 -
rate per annum equal to 2% plus the rate of commission fee otherwise (assuming
no Event of Default has occurred and is continuing) applicable to such Letter of
Credit.
"Dividends" means, for any period, dividends paid by the Borrower, other
than dividends payable solely in capital stock of the Borrower.
"Dollars" and the sign "$", mean lawful money of the United States of
America.
"EBITDA" means, for any period, the sum of (i) Operating Income for such
period plus (ii) all amounts treated as expenses for depreciation and the
amortization of intangibles of any kind to the extent included in the
determination of Operating Income for such period.
"Effective Date" means the date this Agreement has been executed by the
Borrower, the Banks, the Issuing Bank and the Administrative Agent.
"Effective Net Worth" means, at any particular date, (i) the sum of
capital surplus, earned surplus, capital stock and the principal amount of, and
the accrued interest with respect to, any Subordinated Debt minus (ii) deferred
charges, deferred tax assets, Affiliate Advances, treasury stock and intangibles
(including, without limitation, organizational expenses, patents, trademarks,
copyrights, goodwill, covenants not to compete, research and developmental costs
and training costs), all determined in accordance with GAAP.
"Environmental Law" means any federal, state or local statute or
regulation relating to hazardous or toxic wastes or substances or the removal
thereof.
"Equity Investment" means a prudent investment, other than an Acquisition,
in the Capital Stock of any Person.
"Equity Investment Cost" means, with respect to any Permitted Equity
Investment, without duplication, (i) the aggregate amount of cash and other
property invested in connection with such Permitted Equity Investment, plus (ii)
the amount of all Investments in Acquisition Subsidiaries with respect to such
Permitted Equity Investment, plus (iii) the amount of all other Investments made
in connection with such Permitted Equity Investment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is
aggregated with the Borrower under Section 414(b), (c), (m) or (o) of the Code
or Section 4001 of ERISA.
"Event of Default" has the meaning ascribed to such term in Section 11.1
hereof.
- 7 -
"Excluded Subsidiaries" means Subsidiaries of the Borrower that have not
executed, or become a party to, a Subsidiary Guarantee.
"Facility Documents" means this Agreement, the Notes, the Subsidiary
Guarantees and all other agreements, documents and instruments executed in
connection herewith or therewith including, but not limited to, all documents
and instruments executed by the Borrower or an Acquisition Subsidiary in
connection with a Permitted Acquisition.
"Federal Funds Rate" means, for any day, the rate per annum (expressed on
an actual number of days to 365/366 days basis of calculation) equal to the
weighted average of the rates on overnight federal funds transactions as
published by the Federal Reserve Bank of New York for such day (or for any day
that is not a Banking Day, for the immediately preceding Banking Day).
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System, and its successors.
"Fixed Rate" means, with respect to any Borrowing consisting of Fixed Rate
Loans, the rate of interest established by each Bank as the rate of interest for
the Bid Loan bearing interest at a fixed rate made or to be made by such Bank
pursuant to a Bid Request.
"Fixed Rate Loan" means each Bid Loan that bears interest at a Fixed Rate.
"Forfeiture Proceeding" means the commencement of any action or proceeding
affecting the Borrower or any of its Subsidiaries before any court, governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, which may result in the seizure or forfeiture of any of their property
which would cause a material adverse effect upon the operations, business,
properties or financial condition of the Borrower and its Subsidiaries, taken as
a whole, or, when the term (Forfeiture Proceeding) is used in Section 6.17
hereof, on the ability of the Borrower or any of its Subsidiaries to perform its
obligations hereunder, or, when the term (Forfeiture Proceeding) is used in
Section 11.1(h) hereof, on the ability of the Borrower and its Subsidiaries,
taken as a whole, to perform their obligations hereunder or under any of the
other Facility Documents.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, applied on a basis consistent with
those used in the preparation of the financial statements referred to in Section
7.5 hereof.
"Hazardous Substance" means any hazardous or toxic substance, material,
waste or other pollutants, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes,
- 8 -
radioactive materials or any other substance or waste regulated pursuant to any
Environmental Law.
"Installment Payment Date" means any date on which all or any portion of
the principal amount of the Term Loans is due and payable.
"Interest Expense" means the Borrower's interest expense as reflected in
its financial statements and calculated in accordance with GAAP.
"Interest Payment Date" means (i) in the case of LIBOR Loans, Fixed Rate
Loans and BA Rate Loans, the last day of the Interest Period applicable thereto
and, in the case of an Interest Period for any BA Rate Loan or Fixed Rate Loan
longer than 90 days or an Interest Period for any LIBOR Loan longer than three
months, every 90 days and every three months, respectively, (ii) in the case of
any Base Rate Loans, the last day of each calendar month, commencing February
29, 2000, (iii) in the case of all Loans, no later than the applicable Loan
Maturity Date.
"Interest Period" means (a) in the case of LIBOR Loans, the period
commencing on the date a LIBOR Loan is made or deemed made pursuant to a
conversion or continuation and ending, as the Borrower may select, on the
numerically corresponding day in the first, second, third, or (as available)
fourth or sixth calendar month thereafter, (b) in the case of BA Rate Loans, the
period commencing on the date a BA Rate Loan is made or deemed made pursuant to
a conversion or continuation and ending, as the Borrower may select, on the
30th, 60th, 90th or (as available) 120th or 180th day thereafter, and (c) in the
case of Fixed Rate Loans, the period commencing on the date a Fixed Rate Loan is
made and ending such number of days thereafter (which shall be not less than 30
days or more than 180 days after the date such Fixed Rate Loan is made) , as the
Borrower may select; provided that (x) if any Interest Period would otherwise
end on a day that is not a Banking Day, such Interest Period shall be extended
to the next succeeding Banking Day unless, in the case of an Interest Period
pertaining to a LIBOR Loan, the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest Period
shall end on the immediately preceding Banking Day and (y) each such Interest
Period pertaining to a LIBOR Loan which commences on the last Banking Day of a
calendar month, or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month, shall end on the last Banking
Day of the appropriate calendar month. In no event shall any Interest Period
extend beyond the applicable Loan Maturity Date and no portion of the Term Loans
shall have an Interest Period which extends beyond an Installment Payment Date
if, after giving effect to such Interest Period, the amount payable on any
Installment Payment Date would exceed the sum of (i) the aggregate principal
amount of the outstanding portion of the Term Loans constituting LIBOR Loans and
BA Rate Loans with Interest Periods ending prior to such Installment Payment
Date and (ii) the aggregate outstanding portion of the Term Loans constituting
Base Rate Loans.
- 9 -
"Interest Rate Protection Arrangement" means any interest rate swap, cap
or collar arrangement or any other derivative product customarily offered by
banks or other financial institutions to their customers in order to reduce the
exposure of such customers to interest rate fluctuations, as the same may be
amended, supplemented or otherwise modified from time to time.
"Investment" or "Investments" means any loan or advance to any Person, or
any Acquisition of any Person, or any capital contribution to, or other
investment in, or acquisition of any interest in, any Person.
"Joint Venture Acquisition" means the acquisition by purchase or otherwise
of Capital Stock interests in Joint Venture Companies.
"Joint Venture Companies" means Persons established directly or indirectly
by the Borrower or one of the Borrower's Subsidiaries or Affiliates with one or
more other Persons on a partnership or similar basis with respect to a specific
project or line of business.
"Lending Office" means, for each Bank and for each type of Loan, the
lending office of such Bank (or of an affiliate of such Bank) designated as such
for such type of Loan on its signature page hereof or in an assignment agreement
pursuant to Section 13.5 hereof or such other office of such Bank (or of an
affiliate of such Bank) as such Bank may from time to time specify to the
Administrative Agent and the Borrower as the office by which its Loans of such
type are to be made and maintained.
"Letter of Credit" means any letter of credit (including, without
limitation, any Special Letter of Credit) issued by the Issuing Bank for the
account of the Borrower directly or as a financial accommodation for a
Subsidiary of the Borrower pursuant to the terms of this Agreement.
"Letter of Credit Commission Fee" means the letter of credit commission
fee payable by the Borrower to the Administrative Agent, for the ratable account
of the Banks or for the account of the Issuing Bank, as the case may be,
pursuant to Section 4.5(a) hereof.
"L/C Subfacility" means that portion of the Total Revolving Credit
Commitment available for the issuance by the Issuing Bank of Letters of Credit,
in an aggregate amount not to exceed $20,000,000 at any time.
"LIBOR" means with respect to any Borrowing consisting of LIBOR Loans, the
rate per annum (rounded upward, if necessary, to the nearest 1/32 of one
percent) as determined by the Administrative Agent on the basis of the offered
rates for deposits in Dollars, for a period comparable to the Interest Period
applicable to such LIBOR Loan which appears on the Telerate page 3750 as of
11:00 a.m. London time on the day that is two Banking Days preceding the first
day of such Interest Period; provided, however, if
- 10 -
the rate described above does not appear on the Telerate System on any
applicable interest determination date, LIBOR shall be the rate (rounded upwards
as described above, if necessary) for deposits in Dollars for a period
substantially equal to such Interest Period on the Reuters Page "LIBO" (or such
other page as may replace the LIBO Page on that service for the purpose of
displaying such rates), as of 11:00 a.m.(London Time), on the day that is two
(2) Banking Days prior to the beginning of such Interest Period.
If both the Telerate and Reuters system are unavailable, then the rate for
that date will be determined on the basis of the offered rates for deposits in
Dollars for a period comparable to the Interest Period applicable to such LIBOR
Loan which are offered by four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the day that is two (2) Banking Days
preceding the first day of such Interest Period as selected by the
Administrative Agent. The principal London office of each of the four major
London banks will be requested to provide a quotation of its Dollar deposit
offered rate. If at least two such quotations are provided, the rate for the
date will be the arithmetic mean of the quotations. If fewer than two quotations
are provided as requested, the rate for that date will be determined on the
basis of the rates quoted for loans in Dollars to leading European banks for a
period of time comparable to such Interest Period offered by major banks in New
York City at approximately 11:00 a.m. New York City time, on the day that is two
Banking Days preceding the first day of such Interest Period. In the event that
the Administrative Agent is unable to obtain any such quotation as provided
above, it will be deemed that LIBOR for such LIBOR Loan cannot be determined. In
the event that the Federal Reserve Board shall impose a Reserve Percentage with
respect to LIBOR deposits of any Bank, then for any period during which such
Reserve Percentage shall apply, LIBOR shall be equal to the amount determined
above divided by an amount equal to 1 minus such Reserve Percentage. "Reserve
Percentage" shall mean the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is imposed on member
banks of the Federal Reserve System against "Euro-currency Liabilities" as
defined in Regulation D.
"LIBOR Loan" means any Revolving Credit Loan or Term Loan when and to the
extent the interest rate therefor is determined on the basis of LIBOR.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, Capital Lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.
"Loan" means any Revolving Credit Loan, Term Loan or Bid Loan made by a
Bank pursuant to Article 2 hereof.
"Loan Maturity Date" means (A) with respect to each Revolving Credit Loan
and each Bid Loan, the earlier of (a) the date on which (i) such Loans shall be
indefeasibly
- 11 -
paid in full, (ii) all Letters of Credit shall be indefeasibly reimbursed in
full, (iii) the Revolving Credit Commitments shall terminate hereunder and (iv)
all obligations of the Borrower in connection with such Loans, Letters of Credit
and Revolving Credit Commitments have been satisfied or (b) November 1, 2004;
provided that if such date is not a Banking Day, the Loan Maturity Date for such
Loans shall be the next succeeding Banking Day (or, with respect to LIBOR Loans,
if such next succeeding Banking Day falls in the next calendar month, the next
preceding Banking Day) and (B) with respect to the Term Loans, the earlier of
(a) the date on which (i) such Loans shall be indefeasibly paid in full, and
(ii) all obligations of the Borrower in connection with such Loans have been
satisfied or (b) November 1, 2004; provided that if such date is not a Banking
Day, the Loan Maturity Date for such Loans shall be the next succeeding Banking
Day (or, with respect to LIBOR Loans, if such next succeeding Banking Day falls
in the next calendar month, the next preceding Banking Day).
"Long Term Debt" means indebtedness for borrowed money which by its terms
matures more than 12 months after the date incurred or if maturing sooner, the
maturity thereof may be extended at the option of the debtor beyond such 12
month period
"Managing Person" means with respect to any Person that is (i) a
corporation, its board of directors, (ii) a limited liability company, its board
of control, managing member or members, (iii) a limited partnership, its general
partner or general partners, (iv) a general partnership or a limited liability
partnership, its managing partner or executive committee or (v) any other
Person, the managing body thereof or other Person analogous to the foregoing.
"Material Debt Agreement" has the meaning ascribed to such term in Section
7.10 hereof.
"Material Subsidiary" means any Subsidiary of the Borrower that has Total
Subsidiary Assets of at least $1,000,000, subject to Section 8.14 hereof.
"Multiemployer Plan" means a Plan defined as such in Section 4001(a)(3) of
ERISA to which contributions have been made by the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Income" means, with respect to any Person for any period, such
Person's and its Consolidated Subsidiaries' net income for such period
determined on a consolidated basis in accordance with GAAP as reflected on such
Person's consolidated financial statements.
"Note" means any Revolving Credit Note or Term Note.
"Notes" means collectively each Revolving Credit Note and each Term Note.
- 12 -
"Notice of Borrowing" means an irrevocable notice, substantially in the
form of Exhibit D-1 hereto, given by the Borrower to the Administrative Agent in
connection with any Borrowing consisting of Revolving Credit Loans or Term
Loans.
"Notice of Conversion/Continuation" means an irrevocable notice,
substantially in the form of Exhibit D-2 hereto, given by the Borrower to the
Administrative Agent with respect to the conversion of Base Rate Loans to LIBOR
Loans or BA Rate Loans, BA Rate Loans to Base Rate Loans or LIBOR Loans or LIBOR
Loans to Base Rate Loans or BA Rate Loans, as the case may be, or a continuation
of BA Rate Loans or LIBOR Loans as such, as the case may be.
"Obligations" means all present and future loans, advances, liabilities,
obligations, covenants, duties, and debts, owing by the Borrower to the
Administrative Agent, the Syndication Agent, the Issuing Bank or any Bank,
arising under or relating to this Agreement or any other Facility Document,
whether or not evidenced by any note, or other instrument or document, whether
arising from an extension of credit, opening of a letter of credit, acceptance,
loan, guaranty, indemnification or otherwise, whether direct or indirect
(including, without limitation, those acquired by assignment from others, and
any participation by the Banks in any of the Borrower's debts owing to others),
absolute or contingent, due or to become due, primary or secondary, as principal
or guarantor, and including, without limitation, all interest, charges,
expenses, fees, attorneys' fees, filing fees and any other sums chargeable to
the Borrower hereunder, under another Facility Document, or under any other
agreement or instrument with the Administrative Agent, the Syndication Agent,
the Issuing Bank or any Bank.
"Operating Income" means, for any period, for the Borrower and its
Consolidated Subsidiaries on a consolidated basis, earnings (or loss) from
operations, calculated in accordance with the methodology used for calculating
"Income from Operations" in the financial statements referred to in Section 7.5
hereof.
"Original Investment Amount" means, with respect to a Permitted Equity
Investment or a Permitted Joint Venture Acquisition, the amount of cash and
other property invested by the Borrower in connection with such Permitted Equity
Investment or Permitted Joint Venture Acquisition, as the case may be.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permissible Business" means (i) any business engaged in (or, in the case
of acquired assets, used in) a business comparable to the business in which Sid
Tool is engaged as of the Effective Date or (ii) any business that furthers or
facilitates the internet related electronic commerce business conducted directly
or indirectly by the Borrower or one of its Affiliates, Subsidiaries or Joint
Venture Companies.
- 13 -
"Permissible Reinvestment Proceeds" means, as to any Permitted Equity
Investment or any Permitted Joint Venture Acquisition, the amount actually
realized by the Borrower upon the sale or other disposition of such Permitted
Equity Investment or Permitted Joint Venture Acquisition, as the case may be, up
to but not in excess of the Original Investment Amount with respect to such
Permitted Equity Investment or Permitted Joint Venture Acquisition, as the case
may be, but solely to the extent of such proceeds that are thereafter utilized
(i) toward a Permitted Equity Investment or a Permitted Acquisition, or (ii) as
a prepayment of the Term Loans in accordance with Section 4.2(d) hereof.
"Permitted Acquisition" means an Acquisition permitted by and made within
the limitations of Section 13.6 hereof.
"Permitted Assumed Acquisition Debt" means, with respect to any Subsidiary
of the Borrower or any Joint Venture Company that is acquired in a Permitted
Acquisition, any of the following Debt of such Subsidiary that was outstanding
immediately prior to the closing of such Permitted Acquisition, was not created
or incurred by such Subsidiary in contemplation of such Permitted Acquisition,
remains outstanding Debt of such Subsidiary on and after such closing or is
assumed by the Borrower or an Acquisition Subsidiary, and does not breach (and
does not cause or result in any breach of) any term of this Agreement:
(a) Mortgage term loans secured by Liens on interests in real estate owned
by or leased to such Subsidiary;
(b) Debt in respect of industrial revenue bonds issued for the benefit of,
or issued to finance projects for the benefit of, such Subsidiary, which Debt
may be secured by Liens on interests in the projects so financed and owned by or
leased to such Subsidiary;
(c) Unsecured term debt evidenced by publicly-traded notes issued by such
Subsidiary pursuant to a trust indenture and subject to the Trust Indenture Act
of 1939, as amended; and
(d) Debt arising in respect of revolving credit facilities, letter of
credit facilities, bankers' acceptance facilities and other similar credit
facilities, which Debt may be secured by Liens on current assets of such
Subsidiary; provided, however, that (i) the maximum amount of all Debt
outstanding and available under all of the foregoing facilities shall not exceed
$10,000,000 in the aggregate at any time, and (ii) within six months after the
date of the closing of such Permitted Acquisition, all of the foregoing
facilities shall have been terminated, all Debt thereunder shall have been
repaid in full or otherwise extinguished, and all Liens securing the same shall
have been released and extinguished.
- 14 -
"Permitted Disposition" means the sale by the Borrower, within the
limitations of Section 9.4(iv) hereof, of all or part of its Capital Stock
interests in Joint Venture Companies.
"Permitted Equity Investment" means an Equity Investment permitted by and
made within the limitations of Section 13.6 hereof.
"Permitted Joint Venture Acquisition" means a Joint Venture Acquisition
permitted by and made within the limitations of Section 13.6 hereof.
"Permitted Liens" means those certain Liens defined in Section 9.2 hereof.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, limited liability company, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
"Plan" means any employee benefit or other plan established or maintained,
or to which contributions have been made, by the Borrower or any ERISA
Affiliate.
"Principal Office" means the principal office of the Administrative Agent,
presently located at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000.
"Prior Credit Agreement" has the meaning set forth in the recitals to this
Agreement.
"Prior Loan" means each BA Rate Loan or LIBOR Loan which is a Pro Rata
Loan (as each such term is defined in the Prior Credit Agreement) made under the
Prior Credit Agreement and which is outstanding on the date hereof.
"Prior Credits" means any and all extensions of credit under or pursuant
to the Prior Credit Agreement.
"Prior Letters of Credit" means all letters of credit issued for the
account of the Borrower under the Prior Credit Agreement and not returned to the
Issuing Bank (as defined in the Prior Credit Agreement) on or prior to the date
hereof.
"Real Estate Affiliates" means certain Affiliates of the Borrower from
whom the Borrower leases certain Real Property.
"Real Property" means any real property owned or leased by the Borrower or
any of its Subsidiaries.
"Regulation D" means Regulation D of the Federal Reserve Board as the same
may be amended or supplemented from time to time.
- 15 -
"Regulatory Change" means, with respect to any Bank, or any Person
controlling any Bank, any change in United States federal, state, municipal or
foreign laws or regulations (including Regulation D) or the adoption or making
of any interpretations, directives or requests applying to a class of banks
including such Bank (or such Person controlling such Bank) of or under any
United States, federal, state, municipal or foreign laws or regulations (whether
or not having the force of law) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"Reportable Event" means any of the events set forth in Section 4043(b) of
ERISA as to which events the PBGC by regulation has not waived the requirement
of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence
of such event, provided that a failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA shall be a Reportable Event
regardless of any waivers given under Section 412(d) of the Code.
"Required Banks" means, at any time, Banks having at least 71% of the
aggregate amount of the Commitments and, if the Commitments have been
terminated, Banks having at least 71% of the Loans (excluding Bid Loans)
outstanding at such time and participation interests in Aggregate Letter of
Credit Outstandings at such time.
"Revolving Credit Commitment" means, with respect to each Bank, the
obligation of such Bank to extend credit to the Borrower pursuant to Section
2.1(a) hereof in the aggregate principal amount listed on the signature pages
hereof with respect to such Bank under the column "Revolving Credit Commitment"
or in the assignment agreement pursuant to which such Bank became a "Bank"
hereunder in accordance with Section 13.5 hereof (as such amounts may be reduced
or otherwise modified from time to time as provided in this Agreement).
"Revolving Credit Commitment Proportion" means, with respect to each Bank
at the time of determination, that proportion that its Revolving Credit
Commitment bears to the Total Revolving Credit Commitment; provided, that, each
Bank's Revolving Credit Commitment Proportion shall equal such Bank's Term Loan
Commitment Proportion.
"Revolving Credit Facility" means the revolving credit facility provided
for in Section 2.1(a) hereof.
"Revolving Credit Loan" means any Loan made by a Bank pursuant to Section
2.1(a) hereof. Each Revolving Credit Loan shall be a LIBOR Loan, a BA Rate Loan
or a Base Rate Loan, unless otherwise provided by Article 5, Article 11 or any
other applicable provisions of this Agreement.
"Revolving Credit Note" means a promissory note of the Borrower in the
form of Exhibit A-1 hereto evidencing the Revolving Credit Loans made or to be
made by a Bank hereunder and any other promissory note of the Borrower issued in
addition thereto or in substitution therefor that evidence the Revolving Credit
Loans.
- 16 -
"Sid Tool" means Sid Tool Co., Inc., a New York corporation and a
wholly-owned Subsidiary of the Borrower.
"Sid Tool Letters of Credit" means all letters of credit issued for the
account of Sid Tool under the Prior Credit Agreement and not returned to the
Issuing Bank (as defined in the Prior Credit Agreement) on or prior to the date
hereof.
"Solvent" means, when used with respect to any Person on a particular
date, that on such date: (a) the fair saleable value of its assets is in excess
of the total amount of its liabilities, including, without limitation, the
reasonably expected amount of such Person's obligations with respect to
contingent liabilities, (b) the present fair saleable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts and liabilities as they become
absolute and matured, (c) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature and (d) such Person is not engaged in business
or a transaction for which such Person's property would constitute an
unreasonably small capital.
"Special Letter of Credit" means each standby Letter of Credit issued to
the respective beneficiary thereof by the Issuing Bank for the account of the
Borrower pursuant to the terms of this Agreement, having an expiration date not
more than one (1) year after the date of issuance thereof and having a face
amount which, when added to all Letters of Credit then outstanding or issued
contemporaneously therewith, would not exceed the L/C Subfacility.
"Special Letter of Credit Commission Fee" means the special letter of
credit commission fee payable by the Borrower to the Administrative Agent for
the ratable account of the Banks pursuant to Section 4.5(c) hereof.
"Subordinated Debt" means unsecured Debt of the Borrower that is
subordinated on terms satisfactory to the Banks to the Borrower's obligations to
the Banks under this Agreement and the other Facility Documents.
"Subsidiary" or "Subsidiaries" means, as to any Person, any corporation,
corporations or other entity or entities of which such Person alone, or such
Person and/or one or more of its Subsidiaries, owns, directly or indirectly, at
least a majority of the securities or other ownership interests having ordinary
voting power (absolutely or contingently) for the election of the Managing
Person or other persons performing similar functions.
"Subsidiary Guarantee" means the guarantees of the obligations of the
Borrower by each Material Subsidiary in favor of the Administrative Agent and
the Banks in the form of Exhibit C, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms and executed
as of the Effective Date or, if
- 17 -
later, on the date of the Permitted Acquisition pursuant to which a Person
became a Material Subsidiary.
"Term Loan" means any Loan made by a Bank pursuant to Section 2.1(c)
hereof. Each Term Loan shall be a LIBOR Loan, a BA Rate Loan or a Base Rate
Loan, unless otherwise provided by Article 5, Article 11 or any other applicable
provisions of this Agreement.
"Term Loan Commitment" means, with respect to each Bank, the obligation of
such Bank to extend Term Loans to the Borrower hereunder in the aggregate
principal amount listed on the signature pages hereof with respect to such Bank
under the column "Term Loan Commitment" or in the assignment agreement pursuant
to which such Bank became a "Bank" hereunder in accordance with Section 13.5
hereof (less, as the context requires, the principal amount of the Term Loans
repaid as at any time of determination thereof, and as such amounts may be
reduced or otherwise modified from time to time as provided in this Agreement).
"Term Loan Commitment Proportion" means, with respect to each Bank at the
time of determination, that proportion that its Term Loan Commitment bears to
the Total Term Loan Commitment; provided, that, each Bank's Term Loan Commitment
Proportion shall equal such Bank's Revolving Credit Commitment Proportion.
"Term Note" means a promissory note of the Borrower in the form of Exhibit
A-2 hereto evidencing the Term Loans made or to be made by a Bank hereunder and
any other promissory note of the Borrower issued in addition thereto or in
substitution therefor that evidence the Term Loans.
"Total Assets" means, at a particular date, all amounts which would, in
conformity with GAAP, be included as assets on a balance sheet of the Borrower
and its Consolidated Subsidiaries as at such date.
"Total Commitment" means, at any time, the aggregate of the Commitments in
effect at such time. On the Effective Date, the Total Commitment is
$160,000,000.
"Total Cost" means the sum of (i) the aggregate Equity Investment Cost
with respect to all Permitted Equity Investments made after January 1, 2000
(regardless of whether the assets acquired have been disposed of), plus (ii) the
aggregate Acquisition Cost of all Permitted Acquisitions entered into or
consummated after August 28, 1999 (regardless of whether the assets acquired
have been disposed of); provided, that, Total Cost shall not include any
Permissible Reinvestment Proceeds.
"Total Current Liabilities" means, at a particular date, all amounts which
would, in conformity with GAAP, be included as current liabilities on a balance
sheet of the Borrower and its Consolidated Subsidiaries as at such date and
shall include, without
- 18 -
limitation all obligations payable on demand or within one year after the date
on which the determination is made.
"Total Revolving Credit Commitment" means, at any time, the aggregate of
the Revolving Credit Commitments in effect at such time. On the Effective Date,
the Total Revolving Credit Commitment is $110,000,000.
"Total Senior Debt" shall be determined for the Borrower and its
Consolidated Subsidiaries on a consolidated basis and means, at a particular
date: (a) indebtedness for borrowed money; (b) obligations arising under
acceptance facilities; (c) guaranties, endorsements (other than for collection
in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person,
or otherwise to assure a creditor against loss with respect to obligations of
the type described in this definition; (d) obligations secured by any Lien on
any of its/their property; (e) obligations as lessee under Capital Leases; and
(f) indebtedness evidenced by a note, bond, indenture or similar instrument,
excluding, however, from the determination of Total Senior Debt the principal
amount of, and the accrued interest with respect to, any Subordinated Debt.
"Total Senior Liabilities" means, as to the Borrower and its Consolidated
Subsidiaries, at a particular date, all amounts which would, in conformity with
GAAP, be included as liabilities on a balance sheet of the Borrower and its
Consolidated Subsidiaries as at such date, excluding, however, from the
determination of Total Senior Liabilities, deferred tax liabilities and the
principal amount of, and the accrued interest with respect to, any Subordinated
Debt.
"Total Subsidiary Assets" means, as to any Subsidiary of the Borrower at a
particular date, all amounts which would, in conformity with GAAP, be included
as assets on a balance sheet of such Subsidiary and its consolidated
Subsidiaries as at such date.
"Total Term Loan Commitment" means, at any time, the aggregate of the Term
Loan Commitments in effect at such time. On the Effective Date, the Total Term
Loan Commitment is $50,000,000.
"Unfunded Vested Liabilities" means, with respect to any Plan, the amount
(if any) by which the present value of all vested benefits under such Plan
exceeds the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of such Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrower
or any ERISA Affiliate to the PBGC or such Plan under Title IV of ERISA.
"Unused Fee" means the Unused Fee as defined in Section 4.4(a) hereof and
payable by the Borrower to the Administrative Agent for the ratable account of
the Banks pursuant to such Section 4.4(a).
- 19 -
"Year 2000 Issue" means failure of computer software, hardware and
firmware systems and equipment containing embedded computer chips to properly
receive, transmit, process, manipulate, store, retrieve, retransmit or in any
other way utilize data and information due to the occurrence of the year 2000 or
the inclusion of dates on or after January 1, 2000.
Section 1.2. Accounting Terms.
All accounting terms not specifically defined herein shall be construed in
accordance with GAAP, and all financial data required to be delivered hereunder
shall be prepared in accordance with GAAP.
Section 1.3. Interpretation.
All references in this Agreement to any other agreement or instrument
shall include such other agreement or instrument as the same may be amended,
modified or supplemented from time to time in accordance with this Agreement. In
the computation of interest and fees payable from a specified date to a later
specified date, unless otherwise indicated, the word "from" means "from and
including" and the words "to" and "until" both mean "to but not including."
Wherever appropriate in the context, terms used herein in the singular also
include the plural, and vice versa, and each masculine, feminine or neuter
pronoun shall also include the other genders.
ARTICLE 2. THE LOANS
Section 2.1. The Loans Generally.
(a) Subject to the terms and conditions of this Agreement
(including, but not limited to, the provisions of Section 12.16 hereof) and in
reliance upon the representations and warranties set forth herein and upon the
provisions of each Subsidiary Guarantee, each of the Banks severally agrees to
make revolving credit loans in Dollars on a pro rata basis based on its
Revolving Credit Commitment Proportion (the "Revolving Credit Loans") to the
Borrower and to purchase on a pro rata basis based on its Revolving Credit
Commitment Proportion participation interests in Aggregate Letter of Credit
Outstandings from time to time from and including the Effective Date to but
excluding the Loan Maturity Date applicable to the Revolving Credit Loans up to
but not exceeding at any one time outstanding the amount of its Revolving Credit
Commitment; provided, that (i) at no time shall any Revolving Credit Loan be
made if after giving effect to such Revolving Credit Loan the sum of the
Aggregate Revolver Outstandings at such time, plus the aggregate principal
amount of Loans (other than Term Loans) to be made pursuant to a Bid Acceptance
/Rejection or a Notice of Borrowing would exceed the Total Revolving Credit
Commitment in effect at such time and (ii) at all times the outstanding
aggregate principal amount of all Revolving Credit Loans made by each Bank shall
equal the product of (a) its Revolving Credit Commitment Proportion times
- 20 -
the aggregate outstanding principal amount of all Revolving Credit Loans.
Subject to the foregoing limits, the Borrower may borrow, repay and reborrow, on
or after the Effective Date and prior to the Loan Maturity Date, all or a
portion of the Revolving Credit Commitments hereunder.
(b) Each Revolving Credit Loan shall be made as part of a Borrowing
consisting of Revolving Credit Loans made by the Banks ratably in accordance
with their respective Revolving Credit Commitments; provided, however, that the
failure of any Bank to make any Revolving Credit Loan shall not in itself
relieve any other Bank of its obligation to lend hereunder (it being understood,
however, that no Bank shall be responsible for the failure of any other Bank to
make any Revolving Credit Loan required to be made by such other Bank). Each
Borrowing of Revolving Credit Loans shall be (A) with respect to BA Rate Loans,
in an aggregate principal amount which is an integral multiple of $100,000 and
not less than $2,000,000, (B) with respect to LIBOR Loans, in an aggregate
principal amount which is an integral multiple of $100,000 and not less than
$5,000,000 and (C) with respect to Base Rate Loans, in an aggregate principal
amount which is not less than $250,000, and, if greater than $250,000, which is
an integral multiple of $100,000 (or an aggregate principal amount equal to the
remaining balance of the available Revolving Credit Commitments). Subject to the
provisions of Article 4 and Article 11 hereof, the Borrower shall pay the
principal amount of each Revolving Credit Loan in full on its Loan Maturity
Date.
(c) Subject to the terms and conditions of this Agreement
(including, but not limited to, the provisions of Section 12.16 hereof) and in
reliance upon the representations and warranties set forth herein and upon the
provisions of each Subsidiary Guarantee, on the Effective Date, provided that
the Borrower is then in compliance with the conditions set forth in Article 6
hereof, each of the Banks severally agrees to make a term loan in Dollars on a
pro rata basis based on its Term Loan Commitment Proportion (the "Term Loans")
to the Borrower up to but not exceeding at any one time outstanding the amount
of its Term Loan Commitment; provided, that (i) the Term Loans shall not be made
if after giving effect to such Term Loans the sum of the Term Loans made by all
the Banks would exceed the Total Term Loan Commitment in effect at such time and
(ii) the outstanding aggregate principal amount of the Term Loan made by each
Bank shall equal the product of (a) its Term Loan Commitment Proportion times
(b) the aggregate outstanding principal amount of all Term Loans. Each Term Loan
shall be made as part of a single Borrowing and shall be made by the Banks
ratably in accordance with their respective Term Loan Commitments; provided,
however, that the failure of any Bank to make any Term Loan shall not in itself
relieve any other Bank of its obligation to lend hereunder (it being understood,
however, that no Bank shall be responsible for the failure of any other Bank to
make any Term Loan required to be made by such other Bank).
(d) Each Borrowing consisting of Revolving Credit Loans and/or Term
Loans shall be comprised entirely of LIBOR Loans, BA Rate Loans or Base Rate
Loans, as the Borrower may request pursuant to Section 2.4 hereof. Borrowings of
more than one type of Loan may be outstanding at the same time; provided, that
not more than
- 21 -
fifteen (15) LIBOR Loans and BA Rate Loans may be outstanding at any one time.
For purposes of the foregoing, Loans having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Loans.
Section 2.2. The Notes.
(a) The Revolving Credit Loans of each Bank shall be evidenced by a
single Revolving Credit Note in favor of such Bank, with appropriate insertions,
duly executed and completed by the Borrower. Each Bank is hereby authorized to
record the date and amount of each Revolving Credit Loan, the date and amount of
each payment of principal thereof, and the principal amount subject thereto and
interest rate with respect thereto in such Bank's records and/or on the
schedules annexed to and constituting a part of its Revolving Credit Note, and,
absent manifest error, any such recordation shall constitute conclusive evidence
of the information so recorded; provided that the failure to make any such
recordation shall not in any way affect the Borrower's obligation to repay the
Revolving Credit Loans. Each Revolving Credit Note (a) shall be dated the
Effective Date, (b) be stated to mature on the Loan Maturity Date applicable to
the Revolving Credit Loans and (c) shall bear interest from and including the
Effective Date on the unpaid principal amount thereof from time to time
outstanding as provided herein.
(b) The Term Loans of each Bank shall be evidenced by a single Term
Note in favor of such Bank, with appropriate insertions, duly executed and
completed by the Borrower and dated the Effective Date. The principal amount of
each Term Note shall be payable in eight consecutive semi-annual installments,
the first seven of which shall each be in an amount equal to the original face
amount of such Term Note divided by eight (rounded upwards to the next higher
full dollar), and the eighth and final installment shall be in an amount equal
to the then unpaid principal balance thereof, payable on the first day of each
July and January commencing July 1, 2001 until the Loan Maturity Date applicable
to the Term Loans at which time the entire unpaid principal balance of such Term
Note together with all interest accrued and unpaid shall be paid in full. Each
Term Note shall bear interest from and including the Effective Date on the
unpaid principal amount thereof from time to time outstanding as provided
herein. Amounts repaid under the Term Loans (whether pursuant to regularly
scheduled payments, prepayments or otherwise) may not be reborrowed.
Section 2.3. Use of Proceeds.
The Borrower shall use the proceeds of the Loans and Letters of Credit
solely to refinance the Prior Credits outstanding on the date hereof under the
Prior Credit Agreement and certain other obligations owing to the Banks, to
finance its working capital and Capital Expenditures needs and the working
capital and Capital Expenditures needs of its Consolidated Subsidiaries, to
finance Permitted Acquisitions by the Borrower and any of its Acquisition
Subsidiaries and to refinance any extensions of credit made in connection with
any of the foregoing. No part of the proceeds of any of any extension of
- 22 -
credit hereunder will be used for any purpose which violates the provisions of
Regulation G, T, U or X of the Federal Reserve Board as in effect on the date of
making such Loans.
Section 2.4. Borrowing Procedures for Revolving Credit Loans and Term
Loans.
In order to request Revolving Credit Loans and the Term Loans, the
Borrower shall give the Administrative Agent a duly completed Notice of
Borrowing (i) for each Borrowing consisting of BA Rate Loans or Base Rate Loans,
not later than 10:00 a.m. (New York time) on the date of such Borrowing; and
(ii) for each Borrowing consisting of LIBOR Loans, not later than 10:00 a.m.
(New York time) three Banking Days before the date of such Borrowing. Each such
Notice of Borrowing shall specify: (i) the type of Loans comprising such
Borrowing; (ii) the amount of such Borrowing; (iii) the date of such Borrowing,
which shall be a Banking Day prior to the applicable Loan Maturity Date; and
(iv) in the case of a Borrowing consisting of LIBOR Loans or BA Rate Loans, the
duration of the Interest Period applicable to the Loans comprising such
Borrowing, which shall be a period permitted by the definition of "Interest
Period" in Article 1 hereof. Each Borrowing consisting of Revolving Credit Loans
and/or Term Loans shall be made ratably from the Banks in proportion to each
Bank's Revolving Credit Commitment Proportion or Term Loan Commitment
Proportion, as the case may be. Upon receipt by the Administrative Agent of a
Notice of Borrowing as aforesaid, the Administrative Agent shall promptly advise
each Bank thereof (i) by telephone (confirmed in writing), in the case of BA
Rate Loans and Base Rate Loans and (ii) by telecopy, in the case of LIBOR Loans.
Not later than 11:00 a.m. (New York time) on the date of such Borrowing, each
Bank shall, through its Lending Office and subject to the conditions of this
Agreement, make the amount of the Revolving Credit Loan and/or Term Loan, as the
case may be, to be made by it on such day available to the Administrative Agent,
at the Principal Office and in immediately available funds for the account of
the Borrower. The amount received by the Administrative Agent shall, subject to
the conditions of this Agreement, be made available by the Administrative Agent
to the Borrower, not later than 1:00 p.m. on such date, in immediately available
funds, by the Administrative Agent crediting an account of the Borrower
designated by the Borrower and maintained with the Administrative Agent at 000
Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000.
Section 2.5. Bid Procedure.
(a) In order to request Bid Loans, the Borrower shall hand deliver
or telecopy to the Administrative Agent a duly completed Bid Request, to be
received by the Administrative Agent not later than 10:00 a.m. (New York time)
one Banking Day before such proposed Borrowing. A Bid Request that does not
conform substantially to the format of Exhibit B-1 hereto may be rejected in the
Administrative Agent's sole discretion, and the Administrative Agent shall
promptly notify the Borrower of such rejection by telecopy. Each Bid Request
shall refer to this Agreement and specify (x) the date of such Borrowing of Bid
Loans (which shall be a Banking Day) and the aggregate
- 23 -
principal amount of such Borrowing which shall be in a minimum principal amount
of $5,000,000 (or an aggregate principal amount equal to the remaining balance
of the Total Revolving Credit Commitment) and a maximum principal amount of
$25,000,000, subject to the provisions of Section 2.5(d) hereof and (y) the
Interest Period with respect thereto; provided, that at no time shall any Bid
Loan be made if after giving effect to such Bid Loan the sum of the Aggregate
Revolver Outstandings at such time, plus the aggregate principal amount of Loans
(other than Term Loans) to be made pursuant to a Bid Acceptance /Rejection or a
Notice of Borrowing would exceed the Total Revolving Credit Commitment in effect
at such time. In no event shall the Aggregate Bid Loan Outstandings at any time
exceed fifty percent (50%) of the Total Revolving Credit Commitment at such
time. Promptly after its receipt of a Bid Request that is not rejected as
aforesaid, the Administrative Agent shall telecopy to the Banks a copy of the
Bid Request inviting the Banks to bid, on the terms and conditions of this
Agreement, to make Bid Loans. Each Borrowing of Bid Loans shall be comprised
entirely of Fixed Rate Loans.
(b) Each Bank may, in its sole discretion, make one or more Bids to
the Borrower responsive to the Borrower's Bid Request. Each Bid by a Bank must
be received by the Administrative Agent by telecopy not later than 10:00 a.m.
(New York time) on the day of such proposed Borrowing. Multiple Bids will be
accepted by the Administrative Agent. Bids that do not conform substantially to
the format of Exhibit B-2 hereto may be rejected by the Administrative Agent,
and the Administrative Agent shall notify the Bank making such nonconforming Bid
of such rejection as soon as practicable. Each Bid shall refer to this Agreement
and specify (x) the principal amount of the Bid Loan or Bid Loans that the
applicable Bank is willing to make, (y) the Fixed Rate or Fixed Rates at which
such Bank is prepared to make such Bid Loan or Bid Loans and (z) the Interest
Period and the last day thereof. If any Bank invited to bid shall elect not to
make a Bid, such Bank shall so notify the Administrative Agent by telecopy not
later than 10:00 a.m. (New York time) on the day of such proposed Borrowing;
provided, however, that failure by any Bank to give such notice shall be deemed
to be an election not to make a Bid, and such failure shall accordingly not
cause such Bank to be obligated to make any Bid Loan as part of such Borrowing.
(c) The Administrative Agent shall promptly notify the Borrower, by
telecopy, of all the conforming Bids made, the Fixed Rate and the principal
amount of each Bid Loan in respect of which a Bid was made and the identity of
the Bank that made each Bid. The Administrative Agent shall send a copy of all
Bids to the Borrower for its records as soon as practicable after completion of
the bidding process set forth in this Section 2.5.
(d) The Borrower may in its sole and absolute discretion, subject
only to the provisions of this paragraph (d), accept or reject any Bid referred
to in paragraph (c) above. The Borrower shall notify the Administrative Agent by
telephone, confirmed by telecopy in the form of a Bid Acceptance /Rejection,
whether and to what extent it has decided to accept or reject any of or all the
Bids referred to in paragraph (c) above not
- 24 -
more than one hour after it shall have been notified of such Bids by the
Administrative Agent pursuant to such paragraph (c); provided, however, that (i)
the failure of the Borrower to give such notice shall be deemed to be a
rejection of all the Bids referred to in paragraph (c) above, (ii) the Borrower
shall not accept a Bid made at a particular Fixed Rate if it has decided to
reject a Bid made at a lower Fixed Rate, (iii) the aggregate amount of the Bids
accepted by the Borrower shall not exceed the principal amount it specified in
the related Bid Request, (iv) if the Borrower shall accept a Bid or Bids made at
a particular Fixed Rate but the amount of such Bid or Bids shall cause the total
amount of Bids to be accepted to exceed the amount specified in the related Bid
Request, then the Borrower shall accept a portion of such Bid or Bids in an
amount equal to the amount specified in such Bid Request less the amount of all
other Bids accepted with respect to such Bid Request, which acceptance, in the
case of multiple Bids at such Fixed Rate, shall be made pro rata in accordance
with the amount of each such Bid and such Fixed Rate, and (v) except pursuant to
clause (iv) above, no Bid shall be accepted for a Bid Loan unless such Bid Loan
is in a minimum principal amount of $2,000,000 and a maximum principal amount of
$25,000,000 provided further, however, that if a Bid Loan must be in an amount
less than $2,000,000 because of the provisions of clause (iv) above, such Bid
Loan shall be for a minimum of $1,000,000, and in calculating the pro rata
allocation of acceptances of portions of multiple Bids at a particular Fixed
Rate pursuant to clause (iv) above the amounts shall be rounded to integral
multiples of $1,000,000 in a manner which shall be in the discretion of the
Administrative Agent.
(e) The Administrative Agent shall promptly notify each bidding Bank
whether or not its Bid has been accepted (and if so, in what amount and at what
Fixed Rate) by telecopy, and each successful bidder will thereupon become bound,
subject to the other applicable conditions hereof, to make the Bid Loan in
respect of which its Bid has been accepted.
(f) No Bid Loan shall be requested or made hereunder if after giving
effect thereto any of the conditions set forth in clause (i) or (ii) of Section
2.1(a) hereof would not be met.
(g) If the entity which is the Administrative Agent shall elect to
submit a Bid in its capacity as a Bank, it shall submit such Bid directly to the
Borrower one quarter of an hour earlier than the latest time at which the other
Banks are required to submit their bids to the Administrative Agent pursuant to
paragraph (b) above.
(h) All notices, submissions and other communications pursuant to
this Section 2.5 shall be irrevocable.
(i) Subject to the provisions of Article 4 and Article 11 hereof,
the Borrower shall pay the principal amount of each Bid Loan in full on the last
day of the Interest Period thereof.
- 25 -
Section 2.6. Interest on Loans.
(a) Subject to the provisions of subsection (e) of this Section 2.6,
LIBOR Loans and BA Rate Loans shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to LIBOR or the BA Rate, as the case may be, for the Interest Period in effect
for such Loan plus the Applicable Margin from time to time in effect.
(b) Subject to the provisions of subsection (e) of this Section 2.6,
Base Rate Loans shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 360 days) at a rate per annual equal to the Base
Rate. Each change in the interest rate for any Base Rate Loans shall take effect
simultaneously with the corresponding change in the Base Rate.
(c) Subject to the provisions of subsection (e) of this Section 2.6,
each Fixed Rate Loan shall bear interest at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 360 days) equal to the
fixed rate of interest offered by the Bank making such Loan and accepted by the
Borrower pursuant to Section 2.5 hereof.
(d) Interest on each Loan shall be payable on each Interest Payment
Date applicable to such Loan except as otherwise provided in this Agreement. The
applicable BA Rate for each Interest Period applicable to BA Rate Loans shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
(e) Any amount not paid when due (at maturity, on acceleration, or
otherwise) shall bear interest thereafter until paid at the Default Rate. Such
interest shall be payable on demand.
Section 2.7. Reductions in Revolving Credit Commitments.
(a) At any time after the date twelve (12) months after the date of
this Agreement, the Borrower shall have the right on three Banking Days prior
written notice to reduce or terminate the amount of the unused Total Revolving
Credit Commitment, provided that: (i) the Borrower shall give notice of each
such reduction or termination to the Administrative Agent as provided in Section
4.1 hereof; and (ii) each partial reduction shall be in an aggregate amount at
least equal to $10,000,000 or, if greater, in integral multiples of $1,000,000.
(b) The Total Revolving Credit Commitment, once reduced or
terminated, may not be reinstated or increased.
(c) Each reduction in the Total Revolving Credit Commitment pursuant
to this Section 2.7 shall reduce the Total Commitment by the same amount and
shall reduce
- 26 -
each Bank's obligation to make Revolving Credit Loans proportionately in
accordance with its Revolving Credit Commitment Proportion.
Section 2.8. Adjustments to Applicable Margin and Applicable Unused
Percentage.
The Applicable Margin and the Applicable Unused Percentage shall be reset
quarterly for the next succeeding fiscal quarter, based upon the Borrower's
ratio of Total Senior Debt to EBITDA for the four consecutive fiscal quarters
then ended, as reflected in the Borrower's quarterly and year-end financial
statements, effective, in each case, as of the date such financial statements
are required to be delivered hereunder. During the period commencing on the
Effective Date hereof and ending on the date of delivery to the Banks of the
financial statements required for the fiscal quarter ended November 27, 1999,
for purposes of calculating the Applicable Margin and the Applicable Unused
Percentage, Total Senior Debt to EBITDA shall be deemed to be less than
1.00:1.00. Notwithstanding anything to the contrary contained herein, if the
Borrower shall fail to deliver any of the quarterly or year-end financial
statements required to be delivered pursuant to this Agreement on or prior to
any date required by this Agreement, for purposes of calculating the Applicable
Margin and the Applicable Unused Percentage, Total Senior Debt to EBITDA shall
be deemed to be 2.00:1.00 for the period from and including such date to the
date of delivery of such required financial statements.
ARTICLE 3. LETTERS OF CREDIT
Section 3.1. Agreement to Issue.
Subject to the terms and conditions of this Agreement and in reliance upon
the representations and warranties of the Borrower herein set forth and upon the
provisions of each Subsidiary Guarantee, the Issuing Bank hereby agrees to issue
for the account of the Borrower and as a financial accommodation for the
Borrower's Subsidiaries, or any of them, one or more Letters of Credit in
accordance with this Section 3.1, from time to time during the period commencing
on the Effective Date and ending on the Loan Maturity Date applicable to the
Revolving Credit Loans.
Section 3.2. Amounts; Tenor.
The Issuing Bank shall not have any obligation to issue any Letter of
Credit at any time:
(a) if after giving effect to the issuance of the requested Letter
of Credit, (i) the sum of the Aggregate Letter of Credit Outstandings would
exceed the L/C Subfacility then in effect, or (ii) the Aggregate Revolver
Outstandings at such time plus the aggregate principal amount of Loans (other
than Term Loans) to be made pursuant to
- 27 -
a Bid Acceptance /Rejection or a Notice of Borrowing would exceed the Total
Revolving Credit Commitment in effect at such time; or
(b) (i) in the case of any Special Letter of Credit, if such Letter
of Credit has an expiration date more than one (1) year after the date of
issuance thereof, and (ii) in the case of any other Letter of Credit, if such
Letter of Credit has an expiration date more than 180 days after the date of
issuance thereof.
Section 3.3. Conditions.
In addition to being subject to the satisfaction of the conditions
precedent contained in Article 6 hereof, the obligation of the Issuing Bank to
issue any Letter of Credit is subject to the following conditions precedent
having been satisfied in a manner satisfactory to the Issuing Bank and the
Administrative Agent:
(a) The Borrower shall have delivered to the Issuing Bank at such
times and in such manner as the Issuing Bank may prescribe an application in
form and substance satisfactory to the Issuing Bank for the issuance of such
Letter of Credit and such documents as may be required pursuant to the terms
thereof, and the form and terms of the proposed Letter of Credit shall be
satisfactory to the Administrative Agent and the Issuing Bank;
(b) as of the date of issuance, no order of any court, arbitrator or
public authority having jurisdiction or authority over the Issuing Bank shall
purport by its terms to enjoin or restrain money center banks generally from
issuing letters of credit of the type and in the amount of the proposed Letter
of Credit and no law, rule or regulation applicable to money center banks
generally and no request or directive (whether or not having the force of law)
from any public authority with jurisdiction over money center banks generally
shall prohibit, or request that the Issuing Bank refrain from, the issuance of
letters of credit generally or the issuance of such Letter of Credit, as the
case may be; and
(c) the Borrower shall have appointed the Administrative Agent as
its attorney, with full power and authority: (i) to sign and/or endorse the
Borrower's name upon any warehouse or other receipts or Letter of Credit
applications; (ii) to sign the Borrower's name on bills of lading; (iii) to
clear inventory through U.S. Customs in the Borrower's name or the name of the
Administrative Agent, and to sign and deliver to U.S. Customs officials powers
of attorney in the Borrower's name for such purpose; (iv) to complete in the
Borrower's name or Administrative Agent's name any order, sale or transaction,
obtain the necessary documents in connection therewith and collect the proceeds
thereof; and (v) to do such other acts and things as are necessary to carry out
the terms of this Agreement in order to enable the Administrative Agent to
obtain payment of all obligations of the Borrower hereunder.
- 28 -
Section 3.4. Issuance of Letters of Credit.
(a) Request for Issuance. The Borrower shall give the Administrative
Agent written notice, no later than one (1) Banking Day prior to the proposed
date of issuance of the Letter of Credit, containing the original signature of
an authorized officer of the Borrower, of the Borrower's request for the
issuance of a Letter of Credit. Such notice shall be irrevocable and shall
specify the face amount of the Letter of Credit requested, the effective date
(which date shall be a Banking Day) of issuance of such requested Letter of
Credit, the date on which such requested Letter of Credit is to expire (which
date shall be a Banking Day), the purpose for which such Letter of Credit is to
be issued, the beneficiary of the requested Letter of Credit, whether such
Letter of Credit may be drawn in a single or in partial draws and whether such
Letter of Credit is to be issued to replace a letter of credit (including
letters of credit issued other than pursuant to this Agreement). The Borrower
shall attach to such notice the form of the Letter of Credit that the Borrower
requests that the Issuing Bank issue.
(b) Responsibilities of the Administrative Agent; Issuance. The
Administrative Agent shall determine, as of the Banking Day immediately
preceding the requested effective date of issuance of the Letter of Credit set
forth in the notice from the Borrower, the amount of the unused L/C Subfacility
and the unused Total Revolving Credit Commitment as of such date. If (i) the
form of the Letter of Credit delivered by the Borrower to the Administrative
Agent is acceptable to the Administrative Agent and the Issuing Bank in their
reasonable discretion, (ii) the undrawn face amount of the requested Letter of
Credit is less than or equal to each of such unused L/C Subfacility and the
unused Total Revolving Credit Commitment, and (iii) the applicable conditions
set forth in Article 6 hereof have been satisfied, then the Administrative Agent
shall direct the Issuing Bank to issue such Letter of Credit for the account of
the Borrower.
Section 3.5. Letter of Credit Obligations; Duties of Issuing Bank.
(a) Reimbursement. Notwithstanding any provisions to the contrary in
any document or documents delivered pursuant to Section 3.3 hereof, the Borrower
shall reimburse the Issuing Bank for any drawings or payments (whether partial
or full) under any Letter of Credit immediately after the payment by the Issuing
Bank. Any drawings not paid when due shall bear interest, payable on demand, at
the Default Rate until the Issuing Bank is reimbursed in full.
(b) Duties of Issuing Bank. Any action taken or omitted to be taken
by the Issuing Bank under or in connection with any Letter of Credit, if taken
or omitted in the absence of gross negligence or willful misconduct, shall not
put the Issuing Bank under any resulting liability to any Bank, or relieve any
Bank of its obligations hereunder to the Issuing Bank. In determining whether to
pay under any Letter of Credit, the Issuing Bank shall have no obligation
relative to any Bank other than to confirm that any documents required to have
been delivered under such Letter of Credit appear to comply on their face with
the requirements of such Letter of Credit.
- 29 -
(c) Notice of Outstanding Letters of Credit. The Issuing Bank shall
use its best efforts to notify the Administrative Agent, not later than five (5)
Banking Days after the end of each calendar month, as to the aggregate undrawn
stated amount of all Letters of Credit, Prior Letters of Credit and Sid Tool
Letters of Credit outstanding as of the last Banking Day of such calendar month.
The Administrative Agent shall use its best efforts to forward such information
to the Banks promptly.
Section 3.6. Participations.
(a) Purchase of Participations. Immediately upon issuance by the
Issuing Bank of any Letter of Credit in accordance with Section 3.4 hereof, each
Bank shall be deemed to have irrevocably and unconditionally purchased and
received, without recourse or warranty, an undivided interest and participation
in such Letter of Credit equal to such Bank's Revolving Credit Commitment
Proportion of the face amount thereof (including, without limitation, all
obligations of the Borrower with respect thereto, other than amounts owing to
the Issuing Bank under Section 3.5 hereof, and any security therefor or guaranty
pertaining thereto).
(b) Sharing of Letter of Credit Payments. In the event that the
Issuing Bank makes a payment under any Letter of Credit and the Issuing Bank
shall not have been repaid such amount pursuant to Section 3.7 hereof, the
Administrative Agent shall notify each Bank, and each Bank shall unconditionally
pay to the Administrative Agent at its principal office for the account of the
Issuing Bank, as and when provided hereinbelow, an amount equal to such Bank's
Revolving Credit Commitment Proportion of the amount of such payment in Dollars
and in immediately available funds. If the Administrative Agent so notifies the
Banks by not later than 11:00 a.m. (New York time) on any Banking Day, each Bank
shall make available to the Administrative Agent the amount of such payment, as
provided in the immediately preceding sentence, on such Banking Day. If the
Administrative Agent so notifies the Banks after 11:00 a.m. (New York time) on
any Banking Day, each Bank shall make available to the Administrative Agent the
amount of such payment, as provided in the second preceding sentence, together
with interest thereon at the Federal Funds Rate, by not later than 11:00 a.m.
(New York time) on the next Banking Day. Such amounts paid by the Banks to the
Administrative Agent shall constitute Revolving Credit Loans which shall be
deemed to have been requested by the Borrower pursuant to Article 2 hereof.
(c) Sharing of Reimbursement Obligation Payments. Whenever the
Administrative Agent receives a payment from the Borrower on account of a
reimbursement obligation as to which the Administrative Agent has previously
received for the account of the Issuing Bank payment from a Bank pursuant to
this Section 3.6, the Administrative Agent shall promptly pay to such Bank such
Bank's Revolving Credit Commitment Proportion of such payment from the Borrower
in Dollars. Each such payment shall be made by the Administrative Agent on the
Banking Day on which the Administrative Agent receives immediately available
funds paid to such Person pursuant
- 30 -
to the immediately preceding sentence, if received prior to 11:00 a.m. (New York
time) on such Banking Day and otherwise on the next succeeding Banking Day.
(d) Obligations Irrevocable. The obligations of each Bank to make
payments to the Administrative Agent with respect to any Letter of Credit or
with respect to any obligation of the Administrative Agent or the Issuing Bank,
as the case may be, with respect to any Letter of Credit, and the obligations of
the Borrower to make payments to the Administrative Agent, for the account of
the Banks, shall be irrevocable, not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement (assuming, in the case of the obligations of the Banks to make such
payments, that the Administrative Agent has caused such Letter of Credit to be
issued in accordance with Section 3.4 hereof), including, without limitation,
any of the following circumstances:
(i) Any lack of validity or enforceability of this Agreement or any
of the other Facility Documents;
(ii) The existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in a
Letter of Credit or any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), any Bank, the Issuing Bank,
or any other Person, whether in connection with this Agreement, any Letter
of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transactions between the Borrower
or any other Person and the beneficiary named in any Letter of Credit) or
any failure of the Administrative Agent to notify a Bank of the issuance,
extension or renewal of a Letter of Credit;
(iii) Any draft, certificate or any other document presented under
any Letter of Credit upon which payment has been made in good faith and
according to its terms 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 Facility Documents; or
(v) The occurrence of any Default or Event of Default.
Section 3.7. Payment of Letter of Credit Reimbursement Obligations.
(a) Payment to Issuing Bank. The Borrower absolutely and
unconditionally agrees to pay to the Administrative Agent the amount of all
Letter of Credit reimbursement obligations and other amounts payable to the
Issuing Bank under or in connection with any Letter of Credit immediately when
due in immediately available funds, irrespective of any claim, set-off, defense
or other right which the
- 31 -
Borrower may have at any time against the Issuing Bank or any other Person. The
obligation of the Borrower to reimburse or pay the Administrative Agent, the
Issuing Bank or the Banks as provided hereunder in respect of drawings under
Letters of Credit shall rank pari passu with the obligation of the Borrowers to
repay the Loans hereunder, and shall be absolute and unconditional under any and
all circumstances. Without limiting the generality of the foregoing, the
obligations of the Borrower to reimburse the Administrative Agent in respect of
drawings under Letters of Credit shall not be subject to any defense based on
the non-application or misapplication by the beneficiary of any of the proceeds
of any such drawing or the legality, validity, regularity or enforceability of
the Letters of Credit or any related document or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financial
institution or other party to which any Letter of Credit may be transferred.
(b) Recovery or Avoidance of Payments. In the event any payment by
or on behalf of the Borrower received by the Administrative Agent with respect
to any Letter of Credit (or any guaranty or reimbursement obligation relating
thereto) and distributed by the Administrative Agent to the Banks on account of
their respective participations therein is thereafter set aside, avoided or
recovered from the Administrative Agent or the Issuing Bank in connection with
any receivership, liquidation or bankruptcy proceeding, the Banks shall, upon
demand by the Administrative Agent, pay to the Administrative Agent, for its
account or the account of the Issuing Bank, their respective Revolving Credit
Commitment Proportions of such amount set aside, avoided or recovered together
with interest at the rate required to be paid by the Administrative Agent or the
Issuing Bank upon the amount required to be repaid by it.
Section 3.8. Indemnification; Exoneration.
(a) Indemnification. In addition to amounts payable as elsewhere
provided in this Article 3, the Borrower agrees to protect, indemnify, pay and
save harmless the Banks, the Issuing Bank, the Syndication Agent and the
Administrative Agent from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable attorneys'
fees) which any Bank, the Issuing Bank, the Syndication Agent or the
Administrative Agent may incur or be subject to as a consequence, directly or
indirectly, of (i) the issuance of any Letter of Credit other than as a result
of its gross negligence or willful misconduct, or (ii) the failure of the
Issuing Bank to honor a drawing under any Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto public authority (all such acts or omissions being hereinafter
referred to collectively as "Government Acts").
(b) Assumption of Risk by the Borrower. As among the Borrower, the
Banks, the Issuing Bank, the Syndication Agent and the Administrative Agent, the
Borrower assumes all risks of the acts and omissions of, or misuse of any Letter
of Credit by, the respective beneficiaries of such Letter of Credit. In
furtherance and not in limitation of the foregoing, subject to the provisions of
the applications for the issuance
- 32 -
of Letters of Credit, the Banks, the Issuing Bank, the Syndication Agent and the
Administrative Agent shall not be responsible for and the Borrower's obligations
shall not be affected by: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any Person in
connection with the application for and issuance of and presentation of drafts
with respect to any of the Letters of Credit, even if it should prove to be in
all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (iv) errors in
interpretation of technical terms; (v) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any Letter
of Credit or of the proceeds thereof; (vi) the misapplication by the beneficiary
of any Letter of Credit or the proceeds of any drawing under any Letter of
Credit; or (vii) any consequences arising from causes beyond the control of the
Banks, the Issuing Bank, the Syndication Agent or the Administrative Agent,
including, without limitation, any Government Acts. None of the foregoing shall
affect, impair or prevent the vesting of any of the Issuing Bank's, the
Syndication Agent's, the Administrative Agent's or any Bank's rights or powers
under this Section 3.8.
(c) Exoneration. In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any action taken or
omitted by the Administrative Agent, Syndication Agent or Issuing Bank under or
in connection with any Letter of Credit or any related certificates, if taken or
omitted in good faith, shall not put any Bank, the Issuing Bank, the Syndication
Agent or the Administrative Agent under any resulting liability to the Borrower
or relieve the Borrower of any of its obligations hereunder to any such Person.
Section 3.9. Prior Letters of Credit and Sid Tool Letters of Credit.
In the event that any Prior Letter of Credit and/or Sid Tool Letter of
Credit is outstanding on the date hereof and is not returned as provided in
Section 6.1(a)(ii) hereof, all provisions of Sections 3.5, 3.6, 3.7, 3.8 and
11.2 hereof shall apply to each such Prior Letter of Credit and Sid Tool Letter
of Credit, as the case may be, to the same extent as if it were a Letter of
Credit issued pursuant to the terms of this Agreement and, for purposes of
determining the available L/C Subfacility at any time, the face amount of all
such Prior Letters of Credit and Sid Tool Letters of Credit shall be added to
the face amount of all Letters of Credit then outstanding or to be issued at
such time.
ARTICLE 4. GENERAL CREDIT PROVISIONS;
FEES AND PAYMENTS; NOTICE OF CONVERSION/CONTINUATION
Section 4.1. Certain Notices.
- 33 -
Notices by the Borrower to the Administrative Agent of each Borrowing
pursuant to Section 2.4 hereof or Section 2.5 hereof, each Notice of
Conversion/Continuation pursuant to Section 4.7 hereof, each prepayment pursuant
to Section 4.2 hereof and each reduction or termination of Commitments pursuant
to Section 2.7 hereof shall be in writing and shall be irrevocable. The
Administrative Agent shall promptly notify the Banks of the contents of each
such notice.
Section 4.2. Prepayments.
(a) Mandatory Prepayment on Reduction of Revolving Credit
Commitment. On the date of any reduction of the Revolving Credit Commitments as
provided in Section 2.7 hereof, the Borrower shall pay or prepay so much of the
Revolving Credit Loans and the Aggregate Letter of Credit Outstandings as shall
be necessary in order that the Aggregate Revolver Outstandings will not exceed
the Total Revolving Credit Commitment after giving effect to such reduction.
(b) Application of Mandatory Prepayments. All prepayments required
by paragraph (a) above shall be applied pro rata first to Revolving Credit Loans
outstanding and to Aggregate Letter of Credit Outstandings; provided, that, with
respect to all Letters of Credit with respect to which presentment for honor
shall not have occurred, such amount shall be deposited by the Borrower in a
cash collateral account maintained with the Administrative Agent and the unused
portion thereof, if any, shall be returned to the Borrower after the later of
the respective expiry dates of the Letters of Credit and the date that the
obligations of the Borrower in connection with such Letters of Credit are paid
in full.
(c) Voluntary Prepayment. The Borrower may prepay any Loan in whole
or in part without premium or penalty (except for amounts required by Article 5
hereof); provided, however, that each partial prepayment on account of any Loan
shall be in an amount not less than $250,000. Any amount prepaid on account of a
Revolving Credit Loan may be reborrowed in accordance with the provisions of
Section 2.1(a) hereof. Any partial prepayment of the Term Loans may not be
reborrowed and shall be applied to the last maturing installments in inverse
order of their respective maturities.
(d) Mandatory Prepayment from Permitted Dispositions. Upon a
Permitted Disposition pursuant to Section 9.4(iv) hereof, 100% of the net cash
proceeds received by the Borrower and/or an Acquisition Subsidiary in connection
with such Permitted Disposition shall be applied by the Borrower as a prepayment
of the Term Loans pro rata against the outstanding principal balance of the Term
Loans of the Banks and to the last maturing installments in inverse order of
their respective maturities; provided, that, if at the time of any such
Permitted Disposition there are no Term Loans outstanding, the Borrower may
retain all of such net cash proceeds. In connection with any prepayment pursuant
to this Section 4.2(d), Base Rate Loans shall be prepaid first and then, to the
extent further prepayments are required, the balance shall be deposited in a
cash collateral account maintained with the Administrative Agent and held as
cash
- 34 -
collateral for the Obligations until the expiration of Interest Periods with
respect to LIBOR Loans and BA Rate Loans and then applied against such LIBOR
Loans and/or BA Rate Loans on the expiration of such Interest Periods until the
full amount of required prepayments shall have been effected; provided, that,
while such amounts are held as such cash collateral, interest shall continue to
accrue on such LIBOR Loans and BA Rate Loans, as the case may be, until so paid.
(e) Accrued Interest and Other Compensation. All prepayments made
pursuant to this Section 4.2 shall be accompanied by (i) the payment of all
accrued interest on the amount so prepaid and (ii) any and all amounts related
thereto under Article 5 hereof.
Section 4.3. Agency and Arranger Fees.
The Borrower shall pay to the Administrative Agent, the Syndication Agent
and each Arranger, each for its own account, the fees set forth in the letter
agreement dated January 26, 2000, as the same has been or hereafter may be
amended, supplemented, restated or otherwise modified, between the Borrower and
the Administrative Agent, the Syndication Agent and the Arrangers.
Section 4.4. Unused Fee; Origination Fee.
(a) The Borrower shall pay to the Administrative Agent for the
account of each Bank an unused commitment fee for the period from and including
the Effective Date to the Loan Maturity Date applicable to the Revolving Credit
Loans equal to such Bank's Revolving Credit Commitment Proportion of the product
of (i) the Applicable Unused Percentage multiplied by (ii) the average daily
difference of (a) the Total Revolving Credit Commitment minus (b) the Adjusted
Aggregate Outstandings (the "Unused Fee"). The Unused Fee shall be calculated on
the basis of a year of 360 days for the actual number of days elapsed. The
Unused Fee shall be due and payable quarterly in arrears on the last day of each
March, June, September and December in respect of such quarter then ending,
commencing March 31, 2000, and on the Loan Maturity Date applicable to the
Revolving Credit Loans. The Unused Fee shall be earned as accrued and be
non-refundable when paid.
(b) The Borrower shall pay to the Administrative Agent for the pro
rata account of each Bank in proportion to each Bank's Commitment Proportion an
origination fee in the aggregate amount of $200,000 (representing 1/8 of 1% of
the Total Commitment). The origination fee shall be earned as accrued and be
non-refundable when paid.
Section 4.5. Compensation for Letters of Credit.
(a) In connection with the establishment of each Letter of Credit
which is not also a Special Letter of Credit, the Borrower agrees to pay to the
Administrative
- 35 -
Agent, for the sole account of the Issuing Bank, such fees and other charges as
are charged by the Issuing Bank for Letters of Credit issued by it, including,
without limitation, its standard fees for issuing, administering, amending,
renewing, paying and canceling letters of credit, as and when assessed.
(b) Notwithstanding subsection (a) of this Section 4.5 and except as
otherwise provided in subsection (c) of this Section 4.5, with respect to
payment commissions on Letters of Credit (i.e., commissions that are calculated
based on a percentage of the face amount of the applicable Letter of Credit), to
the extent any such payment commission results in an amount that is less than
the Issuing Bank's minimum then in effect for such Letters of Credit:
(i) the portion of the fee paid by the Borrower equal to such
payment commission shall be allocated by the Administrative Agent to the
Banks pro rata in accordance with their respective Revolving Credit
Commitment Proportions; and
(ii) that portion of the fee paid by the Borrower over such payment
commission shall be distributed by the Administrative Agent to the Issuing
Bank for its own account.
To the extent that any such payment commission results in an amount that exceeds
the Issuing Bank's minimum then in effect for such Letters of Credit, the entire
payment commission shall be allocated by the Administrative Agent to the Banks
pro rata in accordance with their respective Revolving Credit Commitment
Proportions.
(c) In connection with the establishment of each Special Letter of
Credit, the Borrower agrees to pay to the Administrative Agent a commission fee
(the "Special Letter of Credit Commission Fee") equal to one percent (1.0%) per
annum of the undrawn face amount of such Special Letter of Credit. The Special
Letter of Credit Commission Fee shall be payable in advance (i) upon the
issuance of each Special Letter of Credit for the number of days remaining in
the month during which such Special Letter of Credit was issued and (ii)
thereafter, monthly, on the first day of each month or part thereof during which
such Special Letter of Credit remains outstanding. The Special Letter of Credit
Commission Fee shall be computed on the basis of a 360-day year for the actual
number of days elapsed and shall be allocated by the Administrative Agent to the
Banks pro rata in accordance with their respective Revolving Credit Commitment
Proportions.
Section 4.6. Payments Generally.
(a) Unless otherwise specified in this Agreement, all payments under
this Agreement or the Notes, other than payments of fees and expenses with
respect to Letters of Credit which shall be made directly by the Borrower to the
Issuing Bank pursuant to the procedures and requirements of the Issuing Bank and
the terms of this Agreement,
- 36 -
shall be made in Dollars in immediately available funds not later than 1:00 p.m.
(New York time) on the relevant dates specified above (each such payment made
after such time on such due date to be deemed to have been made on the next
succeeding Banking Day) to the Administrative Agent, at 000 Xxxxx Xxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxx 00000 for the benefit of the applicable Lending Office of
each Bank. The Borrower will notify each of the Banks of any payment to the
Administrative Agent pursuant to the provisions of this Section 4.6(a) at the
same time it makes any such payment and will notify the Administrative Agent of
any payment to the Issuing Bank of any amounts payable with respect to a Letter
of Credit hereunder at the same time it makes any such payment. The
Administrative Agent may (but shall not be obligated to) debit the amount of any
such payment which is not made by such time to any ordinary deposit account of
the Borrower with the Administrative Agent and the Administrative Agent may (but
shall not be obligated to) require each of the Banks to debit its pro rata
portion (subject to Section 12.16 hereof) of the amount of any such payment
which is not made by such time to any ordinary deposit account of the Borrower
with any such Bank; provided, however, that no Bank shall be required to debit
any funds which are not available to the Borrower other than on an overdraft
basis. The Borrower shall, at the time of making each payment under this
Agreement or the Notes, specify to the Administrative Agent the principal or
other amount payable by the Borrower under this Agreement or the Notes to which
such payment is to be applied; provided, however, that in the event that the
Borrower fails to so specify, or if a Default or Event of Default has occurred
and is continuing, the Administrative Agent shall apply such payment as it may
elect in its sole discretion (subject to Section 12.16 hereof). If the due date
of any payment under this Agreement or the Notes would otherwise fall on a day
which is not a Banking Day, such date shall be extended to the next succeeding
Banking Day and interest shall be payable for any principal so extended for the
period of such extension. Each payment received by the Administrative Agent
hereunder or under any Note for the account of a Bank or the Issuing Bank shall
be paid promptly to such Bank or to the Issuing Bank, as the case may be, in
immediately available funds, for the account of such Bank's Lending Office or
for the account of the office specified by the Issuing Bank to the
Administrative Agent, as the case may be.
(b) All payments made by the Borrower under this Agreement, the
Notes or the other Facility Documents shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any governmental or taxing authority of any jurisdiction located
outside of the United States, excluding, in the case of the Administrative
Agent, the Syndication Agent, the Issuing Bank and each Bank, income taxes and
franchise taxes (imposed in lieu of income taxes) imposed on the Administrative
Agent, the Syndication Agent, the Issuing Bank or such Bank, as the case may be,
as a result of a connection between the jurisdiction of the government or the
taxing authority imposing such tax and the Administrative Agent, the Syndication
Agent, the Issuing Bank or such Bank (excluding a connection arising solely from
the
- 37 -
Administrative Agent, the Syndication Agent, the Issuing Bank or such Bank
having executed, delivered, or performed its obligations or received a payment
under, or enforced, this Agreement, the Notes or the other Facility Documents),
or any political subdivision or taxing authority thereof or therein (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"). If any Taxes are withheld from
any amounts payable to the Administrative Agent, the Syndication Agent, the
Issuing Bank or any Bank hereunder or under the other Facility Documents, the
amounts so payable to the Administrative Agent, the Syndication Agent, the
Issuing Bank or such Bank shall be increased to the extent necessary to yield to
the Administrative Agent, the Syndication Agent, the Issuing Bank or such Bank
(after payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement, the Notes
and the other Facility Documents. Whenever any Taxes are payable by the
Borrower, as promptly as possible thereafter, the Borrower shall send to the
Administrative Agent, the Issuing Bank for its own account or for the account of
the Issuing Bank or such Bank, as the case may be, a certified copy of an
original official receipt received by the Borrower showing payment thereof. If
the Borrower fails to pay any Taxes when due to the appropriate taxing authority
or fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Administrative
Agent, the Syndication Agent, the Issuing Bank and the Banks for any incremental
taxes, interest or penalties that may become payable by the Administrative
Agent, the Syndication Agent, the Issuing Bank or any Bank as a result of any
such failure.
Section 4.7. Conversion and Continuation of Revolving Credit Loans.
The Borrower shall have the right at any time upon prior irrevocable
notice to the Administrative Agent (i) not later than 10:00 a.m. (New York time)
on the day of the conversion, to convert all or any part of any Borrowing
consisting of LIBOR Loans or BA Rate Loans into a Borrowing consisting of Base
Rate Loans, (ii) not later than 10:00 a.m. (New York time) on the day of the
conversion or continuation, to convert all or any part of any Borrowing
consisting of LIBOR Loans or Base Rate Loans into a Borrowing consisting of BA
Rate Loans or to continue any Borrowing consisting of BA Rate Loans for an
additional Interest Period and (iii) not later than 10:00 a.m. (New York time)
three Banking Days prior to conversion or continuation, to convert any Borrowing
consisting of Base Rate Loans or BA Rate Loans into a Borrowing consisting of
LIBOR Loans, or to continue any Borrowing consisting of LIBOR Loans for an
additional Interest Period, provided that the Borrower shall have provided to
the Administrative Agent a Notice of Conversion/Continuation and subject in each
case to the following:
(a) if less than all the outstanding principal amount of any
Borrowing shall be converted into or continued as (i) BA Rate Loans, the
aggregate principal amount of the Borrowing so converted into or continued as BA
Rate Loans shall be an integral multiple of $100,000 and not less than
$2,000,000, (ii) LIBOR Loans, the aggregate principal amount of the Borrowing so
converted into or continued as LIBOR Loans shall
- 38 -
be an integral multiple of $100,000 and not less than $5,000,000 or (iii) Base
Rate Loans, the aggregate principal amount of the Borrowing so converted into or
continued as Base Rate Loans shall be not less than $250,000, and, if greater
than $250,000, shall be an integral multiple of $100,000;
(b) accrued interest on a Borrowing (or portion thereof) being
converted shall be paid by the Borrower at the time of conversion;
(c) if any Borrowing consisting of LIBOR Loans or BA Rate Loans is
converted at a time other than the end of the Interest Period applicable
thereto, the Borrower shall pay, upon demand, any amounts due to the Banks
pursuant to Article 5 hereof;
(d) (i) any portion of a Borrowing maturing or required to be repaid
in less than one month may not be converted into or continued as a Borrowing
consisting of LIBOR Loans and (ii) any portion of a Borrowing maturing or
required to be repaid in less than 30 days may not be converted into or
continued as a Borrowing consisting of BA Rate Loans;
(e) any portion of a Borrowing consisting of LIBOR Loans or BA Rate
Loans which cannot be continued as such by reason of clause (d) above shall be
automatically converted at the end of the Interest Period in effect for such
Borrowing into a Borrowing consisting of Base Rate Loans;
(f) no Interest Period may be selected for any Borrowing consisting
of LIBOR Loans or BA Rate Loans that would end later than the applicable Loan
Maturity Date except with the prior written consent of all Banks;
(g) all conversions and continuations shall be subject to the
provisions of Section 5.4 hereof;
(h) no conversion of any Borrowing into a Borrowing consisting of
LIBOR Loans or BA Rate Loans and no continuation of any Borrowing consisting of
LIBOR Loans or BA Rate Loans shall be effective if a Default or Event of Default
has occurred and is continuing; and
(i) the minimum amounts set forth in Section 4.7(a) hereof shall
also apply to the initial Term Loans.
Each notice pursuant to this Section 4.7 shall be irrevocable and shall
refer to this Agreement and specify (i) the identity and amount of the Borrowing
to be converted or continued, (ii) whether such Borrowing is to be converted to
or continued as a Borrowing consisting of
- 39 -
LIBOR Loans, BA Rate Loans or Base Rate Loans, (iii) if such notice requests a
conversion, the date of such conversion (which shall be a Banking Day) and (iv)
if such Borrowing is to be converted to or continued as a Borrowing consisting
of LIBOR Loans or BA Rate Loans, the Interest Period with respect thereto. If no
Interest Period is specified in any such notice with respect to any conversion
to or continuation as a Borrowing consisting of LIBOR Loans or BA Rate Loans,
the Borrower shall be deemed to have selected an Interest Period of one month's
duration, in the case of LIBOR Loans, or 30 days' duration, in the case of BA
Rate Loans. If no notice shall have been given in accordance with this Section
4.7 to convert or continue any Borrowing, such Borrowing shall, at the end of
the Interest Period applicable thereto (unless repaid pursuant to the terms
hereof) automatically be continued as or converted to a Borrowing consisting of
Base Rate Loans.
ARTICLE 5. YIELD PROTECTION, ETC.
Section 5.1. Additional Costs.
(a) The Borrower shall pay directly to the Issuing Bank and each
Bank from time to time, within two days of the demand of the Issuing Bank or
such Bank, as the case may be, such amounts as the Issuing Bank or such Bank may
reasonably determine to be necessary to compensate it for any costs which the
Issuing Bank or such Bank reasonably determines are attributable to its issuing
or making or maintaining any BA Rate Loans, Fixed Rate Loans, LIBOR Loans or
Letters of Credit (or participations therein) under this Agreement or any of its
Notes or its obligation under any such Loans or Letters of Credit hereunder, or
any reduction in any amount receivable by the Issuing Bank or such Bank
hereunder in respect of any such Loans or Letters of Credit (or participations
therein) or such obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to the Issuing Bank or such Bank under this Agreement or any of its
Notes in respect of any of such Loans or Letters of Credit (or participations
therein) or obligations (other than taxes imposed on the overall net income of
the Issuing Bank or such Bank or of its Lending Office for any of such Loans or
Letters of Credit by the jurisdiction in which the Issuing Bank or such Bank has
its principal office or such Lending Office); or (ii) imposes or modifies any
reserve, special deposit, deposit insurance or assessment, minimum capital,
capital ratio or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, the Issuing Bank
or such Bank (including any of such Loans or any deposits referred to in the
definition of "LIBOR" in Section 1.1 hereof); or (iii) imposes any other
condition affecting this Agreement, any Note (or any of such extensions of
credit or liabilities) or any Letter of Credit (or participations therein). The
Issuing Bank and each Bank will notify the Administrative Agent of any event
occurring after the date of this Agreement which will entitle the Issuing Bank
or such Bank to compensation pursuant to this Section 5.1(a) as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation and the Administrative Agent on behalf of the Issuing Bank or such
Bank will promptly notify the Borrower of such event. If the Issuing Bank or any
Bank requests compensation from the Borrower under this Section 5.1(a), or under
Section 5.1(c), the Borrower may, by
- 40 -
notice to the Administrative Agent (with a copy to the Issuing Bank or such
Bank), suspend the obligation of the Issuing Bank to issue Letters of Credit or
the obligation of such Bank to make Loans (but not to purchase participation
interests in reimbursement obligations under Letters of Credit) or to otherwise
extend credit of the type with respect to which such compensation is requested
(in which case the provisions of Section 5.4 hereof shall be applicable)
provided that the provisions of this sentence shall not relieve the Borrower of
its obligation to make payments pursuant to this Section 5.1; provided further
that if at any time subsequent to such suspension, the causes therefor cease to
exist, the Issuing Bank or such Bank shall so notify the Borrower and the
obligation of the Issuing Bank to issue Letters of Credit, or such Bank's
obligation to make Loans of the applicable type, as the case may be, shall,
subject to the provisions of this Agreement, be reinstated.
(b) Without limiting the effect of the foregoing provisions of this
Section 5.1, in the event that, by reason of any Regulatory Change, any Bank
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Bank which includes deposits by reference to which the interest rate on
LIBOR Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes LIBOR Loans or
(ii) becomes subject to restrictions on the amount of such a category of
liabilities or assets which it may hold, then, if such Bank so elects by notice
to the Administrative Agent (with a copy to the Borrower), the obligation of
such Bank to make LIBOR Loans hereunder shall be suspended until the date such
Regulatory Change ceases to be in effect (in which case the provisions of
Section 5.4 hereof shall be applicable).
(c) Without limiting the effect of the foregoing provisions of this
Section 5.1 (but without duplication), the Borrower shall pay directly to the
Issuing Bank and to each Bank from time to time on request such amounts as the
Issuing Bank or such Bank or any of its affiliates may reasonably determine to
be necessary to compensate the Issuing Bank or such Bank for any costs which it
reasonably determines are attributable to the maintenance by it or any of its
affiliates pursuant to any law or regulation of any jurisdiction or any
interpretation, directive or request (whether or not having the force of law and
whether in effect on the date of this Agreement or thereafter) of any court or
governmental or monetary authority of capital in respect of the Letters of
Credit (or any reimbursement obligations with respect thereto or participations
therein) or any Loans or other obligations hereunder (such compensation to
include, without limitation, an amount equal to any reduction in return on
assets or equity of the Issuing Bank or such Bank or any such affiliate to a
level below that which it could have achieved but for such law, regulation,
interpretation, directive or request). The Issuing Bank and each Bank will
notify the Administrative Agent if it is entitled to compensation pursuant to
this Section 5.1(c) as promptly as practicable after it determines to request
such compensation, and the Administrative Agent on behalf of the Issuing Bank or
such Bank will promptly notify the Borrower.
- 41 -
(d) Determinations and allocations by the Issuing Bank or a Bank for
purposes of this Section 5.1 of the effect of any Regulatory Change pursuant to
subsection (a) or (b), or of the effect of capital maintained pursuant to
subsection (c), on its costs of making or maintaining Loans or Letters of Credit
(or any reimbursement obligations with respect thereto or participations
therein) or its obligation to make Loans or Letters of Credit (or any
reimbursement obligations with respect thereto), or on amounts receivable by, or
the rate of return to, it in respect of Loans or Letters of Credit (or any
reimbursement obligations with respect thereto or participations therein), and
of the additional amounts required to compensate the Issuing Bank or such Bank
under this Section 5.1, shall be conclusive absent manifest error.
Section 5.2. Limitation on Types of Loans.
Anything herein to the contrary notwithstanding, if:
(a) the Administrative Agent determines (which determination shall
be conclusive) that quotations of interest rates for the relevant deposits
referred to in the definitions of "BA Rate" or "LIBOR" in Section 1.1 hereof are
not being provided in the relevant amounts or for the relevant maturities for
purposes of determining the rate of interest for any BA Rate Loans or LIBOR
Loans, as the case may be, as provided in this Agreement; or
(b) any Bank determines (which determination shall be conclusive
absent manifest error) and notifies the Administrative Agent that the relevant
rates of interest referred to in the definitions of "BA Rate" or "LIBOR" in
Section 1.1 hereof upon the basis of which the rate of interest for any type of
BA Rate Loans or LIBOR Loans, as the case may be, is to be determined do not
adequately cover the cost to such Bank of making or maintaining such Loans; then
the Administrative Agent shall give the Borrower and each other Bank prompt
notice thereof, and so long as such condition remains in effect, the Banks shall
be under no obligation to make BA Rate Loans or LIBOR Loans, as the case may be.
Section 5.3. Illegality.
Notwithstanding any other provision in this Agreement, in the event that
it becomes unlawful for the Issuing Bank to issue any Letters of Credit or for
any Bank or its Lending Office to honor its obligation to make or maintain BA
Rate Loans or LIBOR Loans hereunder, then the Issuing Bank or such Bank shall
promptly notify the Administrative Agent thereof (with a copy to the Borrower)
and the Issuing Bank's obligation to issue Letters of Credit, or such Bank's
obligation to make or maintain BA Rate Loans or LIBOR Loans hereunder shall be
suspended until such time as the Issuing Bank may again issue Letters of Credit
or such Bank may again make and maintain such affected Loans in which case the
provisions of Section 5.4 hereof shall be applicable, and any such request for a
Borrowing consisting of LIBOR Loans or BA Rate Loans, as the
- 42 -
case may be, shall, with respect to such Bank, be deemed a request for a Base
Rate Loan from such Bank.
Section 5.4. Certain Loans Pursuant To Sections 5.1, 5.2 and 5.3.
If an event referred to in Section 5.1(b), 5.2 or 5.3 hereof has occurred
with respect to any Bank and such Bank so requests by notice to the
Administrative Agent (with a copy to the Borrower), all BA Rate Loans or LIBOR
Loans, as the case may be, of such Bank then outstanding shall be automatically
converted into Base Rate Loans on the date specified by such Bank in such
notice, and, to the extent that BA Rate Loans or LIBOR Loans, as the case may
be, are so made as (or converted into) Base Rate Loans, all payments of
principal which would otherwise be applied to such Bank's BA Rate Loans or LIBOR
Loans, as the case may be, shall be applied instead to its Base Rate Loans. In
the event of any conversion of any BA Rate Loan or LIBOR Loan to a Base Rate
Loan pursuant to this Section 5.4 prior to the last day of the Interest Period
with respect to such BA Rate Loan or LIBOR Loan, the Borrower shall pay to the
Administrative Agent for the account of the relevant Bank all amounts required
to be paid pursuant to Section 5.5 hereof.
Section 5.5. Certain Compensation.
The Borrower shall pay to any Bank for the account of such Bank, within
two days after the demand of any such Bank through the Administrative Agent,
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost or expense which such Bank determines
is attributable to:
(a) any prepayment or conversion (on a date other than the last day
of the Interest Period with respect to BA Rate Loans, Fixed Rate Loans or LIBOR
Loans) by the Borrower of any such Loans made by such Bank (whether by reason of
the mandatory or voluntary prepayment provisions of this Agreement or otherwise)
or any failure by the Borrower to pay principal or interest on any such Loan
made by such Bank when due or any conversion of any such Loan pursuant to
Section 4.7 or Section 5.4 hereof; or
(b) any failure by the Borrower to borrow, convert into or continue
any BA Rate Loan, Fixed Rate Loan or LIBOR Loan to be made by such Bank on the
date specified therefor in the relevant notice under this Agreement; or
(c) any failure by the Borrower to prepay any BA Rate Loan, Fixed
Rate Loan or LIBOR Loan on the date specified therefor in the relevant notice
under Section 4.1 hereof.
Without limiting the foregoing, such compensation shall include an amount
equal to the excess, if any, of: (i) the amount of interest which otherwise
would have accrued on the principal amount so paid, or converted or not
borrowed, continued, converted or prepaid for the period from and including the
date of such payment or conversion or
- 43 -
failure to borrow, continue, convert or prepay to, but excluding the last day of
the Interest Period or the Loan Maturity Date, as applicable, in the case of BA
Rate Loans, Fixed Rate Loans or LIBOR Loans (or, in the case of a failure to
borrow, continue or convert to but excluding the last day of the Interest
Period, or the Loan Maturity Date, as applicable, in the case of any other BA
Rate Loans, Fixed Rate Loans or LIBOR Loans which would have commenced on the
date specified therefor in the relevant notice) at the applicable rate of
interest for such Loan provided for herein; over (ii) the amount of interest (as
reasonably determined by such Bank) such Bank would have bid in the London
interbank market (if such Loan is a LIBOR Loan) or, if relevant, such other
applicable market (if such Loan is a BA Rate Loan or Fixed Rate Loan) for Dollar
deposits for amounts comparable to such principal amount and maturities
comparable to such period. A determination of any Bank as to the amounts payable
pursuant to this Section 5.5 shall be conclusive absent manifest error provided
that such determination is made on a reasonable basis and provided further that
such Bank provides the Borrower with copies of the calculations made by such
Bank in making such determination.
ARTICLE 6. CONDITIONS PRECEDENT
Section 6.1. Initial Conditions Precedent.
The obligations of the Banks to make the Term Loans and the Revolving
Credit Loans constituting the initial Borrowing are subject to the conditions
precedent that:
(a) the Administrative Agent shall have received on or before the
date of such Loans each of the following, in form and substance reasonably
satisfactory to the Administrative Agent and its counsel:
(i) the Notes duly executed by the Borrower;
(ii) the return, from the respective beneficiaries thereof, of all
letters of credit, if any, issued under the Prior Credit Agreement that
are to be returned to the Issuing Bank (as defined in the Prior Credit
Agreement) on or before the date of the initial Borrowing;
(iii) a certificate of the Secretary or Assistant Secretary of the
Borrower and of each Material Subsidiary, dated the Effective Date,
attesting to all corporate action taken by such Person, including
resolutions of its respective Board of Directors authorizing, as
applicable, the execution, delivery and performance of the Facility
Documents and each other document to be delivered pursuant to this
Agreement, with certified copies of the certificate or articles of
incorporation and the by-laws of the Borrower and each Material
Subsidiary; and, such certificate shall state that the resolutions and
corporate documents thereby certified have not been amended, modified,
revoked or rescinded as of the date of such certificate;
- 44 -
(iv) a certificate of the Secretary or Assistant Secretary of the
Borrower and of each Material Subsidiary, dated the Effective Date,
certifying the names and true signatures of the officers of such entity
authorized to sign the Facility Documents and the other documents to be
delivered by such entity under this Agreement;
(v) a certificate of a duly authorized officer of the Borrower and
each Material Subsidiary dated the Effective Date, stating that (i) the
representations and warranties in Article 7 hereof are true and correct on
such date as though made on and as of such date, (ii) no Default or Event
of Default (as such terms are defined in the Prior Credit Agreement) has
occurred or is continuing under the Prior Credit Agreement and (iii) no
Default or Event of Default (as defined herein) has occurred or is
continuing or would occur as a result of the making of any Loan or the
issuance of any Letter of Credit;
(vi) favorable opinions of counsel for the Borrower and each
Material Subsidiary, dated the Effective Date, in substantially the form
of Exhibit E;
(vii) evidence that the Borrower and each Material Subsidiary is
duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation;
(viii)an audited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at August 28, 1999, and a consolidated income
statement and statement of cash flows of the Borrower and its Consolidated
Subsidiaries for the fiscal year then ended, all prepared in accordance
with GAAP;
(ix) a Subsidiary Guarantee duly executed by each Material
Subsidiary;
(x) a true copy of each partnership/joint venture agreement with
respect to each Joint Venture Company in which the Borrower or one of its
Subsidiaries or Affiliates has, as of the Effective Date, an Investment;
and
(xi) such other documents, financial statements, instruments,
approvals, opinions and evidence as the Administrative Agent may
reasonably require.
(b) the Borrower shall have paid or caused to be paid all fees
required to be paid hereunder or in connection herewith, including without
limitation all the fees set forth in Sections 4.3 and 4.4(b) hereof, and all
accrued fees and expenses of the Administrative Agent, the Syndication Agent,
the Arrangers, the Issuing Bank and each of the Banks (subject to the
limitations set forth herein) in connection with the
- 45 -
preparation, execution and delivery of this Agreement and the other Facility
Documents and the consummation of the transactions contemplated hereby and
thereby;
(c) all Loans made under the Prior Credit Agreement and all other
Prior Credits and other amounts due and payable under the Prior Credit Agreement
as of the Effective Date and the amount of accrued but unpaid facility fees
pursuant to Section 3.04 of the Prior Credit Agreement shall be paid in full
from the proceeds of the first Loans extended under this Agreement and the
Borrower shall have terminated the Prior Credit Agreement in writing;
(d) all extensions of credit made by Fleet and/or Chase in
connection with lines of credit held available by such banks for the benefit of
the Borrower and all other amounts due and payable thereunder that are
outstanding as of the Effective Date shall be paid in full from the proceeds of
the first Loans extended under this Agreement and the Borrower shall have
terminated each of such lines of credit in writing;
(e) the Borrower and each of the Material Subsidiaries shall have
obtained all consents, permits and approvals required in connection with the
execution, delivery and performance by the Borrower and such Material
Subsidiaries of their obligations hereunder and such consents, permits and
approvals shall continue in full force and effect;
(f) all legal matters in connection with this financing shall be
reasonably satisfactory to the Issuing Bank, the Banks and their respective
counsel;
(g) no material adverse change in the business, condition (financial
or otherwise), operations, performance or properties of the Borrower and its
Subsidiaries, taken as a whole, shall have occurred since August 28, 1999;
(h) there shall exist no action, suit, investigation, litigation or
proceeding pending or threatened in any court or before any arbitrator or
governmental instrumentality that could (i) have a material adverse effect on
the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries, taken as a whole,
or (ii) impair the Borrower or any Material Subsidiary's ability to perform
satisfactorily under the Facility Documents to which it is a party; and
(i) the Administrative Agent, the Issuing Bank and the Banks shall
have received reasonably satisfactory evidence that (i) neither the Borrower nor
any of its Subsidiaries is in default with respect to any contractual
obligations to which it is a party, the effect of which may be material and
adverse to the Borrower and the Subsidiaries of the Borrower, taken as a whole,
or to the ability of the Borrower or any such Subsidiary to perform its
respective obligations hereunder or under the other Facility Documents, (ii) no
Default or Event of Default (as such terms are defined in the Prior Credit
Agreement) has occurred or is continuing under the Prior Credit Agreement and
(iii) no Default or
- 46 -
Event of Default (as defined herein) has occurred or is continuing or would
occur as a result of the making of any Loan or the issuance of any Letter of
Credit.
Section 6.2. Additional Conditions Precedent.
The obligations of the Banks to make any Loan or of the Issuing Bank to
issue any Letter of Credit shall be subject to the further conditions precedent
(which shall be in addition to, and shall not be deemed to limit or modify, any
of the other terms and conditions hereunder) that on the date of the making of
such Loan or the issuance of such Letter of Credit:
(a) the following statements shall be true:
(i) (A) with respect to any Loan made to, and any Letter of Credit
issued for the account of, the Borrower on the Effective Date, the
representations and warranties contained in Article 7 hereof and in the
other Facility Documents are true and correct on and as of the date, (B)
and with respect to any Loan made and any Letter of Credit issued after
the Effective Date, the representations and warranties contained in
Article 7 hereof and in the other Facility Documents are true and correct
in all material respects on and as of the date of such Loan or Letter of
Credit, as the case may be, as though made on and as of such date;
provided that for the purposes of this Section 6.2(a)(i)(B) only, (x)
whenever any of the representations or warranties contained in Article 7
hereof are qualified by the phrase "material adverse effect on the
operations, business, property or financial condition of the Borrower or
any Subsidiary of the Borrower or on the ability of the Borrower or
Subsidiary of the Borrower to perform its obligations hereunder" or by any
phrase having a substantially similar meaning, any such phrase shall be
deemed deleted and the phrase "material adverse effect on the operations,
business, property or financial condition of the Borrower and its
Subsidiaries, taken as a whole, or on the ability of the Borrower and its
Subsidiaries, taken as a whole, to perform their obligations hereunder" or
a phrase of substantially similar meaning shall be deemed inserted in lieu
thereof, and (Y) the representation/ warranty contained in Section 7.19
hereof shall be deemed deleted and in lieu thereof "The Borrower and its
Subsidiaries, taken as a whole, are Solvent" shall be deemed inserted;
(ii) no Default or Event of Default has occurred and is continuing
or would result from any such Loan or Letter of Credit; and
(iii) no material adverse change shall have occurred in the
business, financial condition or operations of the Borrower and its
Subsidiaries, taken as a whole, or, with respect to any Loan made to, or
any Letter of Credit issued on behalf of, the Borrower on the Effective
Date, in the ability of the Borrower or any such Subsidiary to perform any
of its obligations under this Agreement or under any of the other Facility
Documents (the phrase "under this
- 47 -
Agreement or under any of the other Facility Documents" is hereinafter,
"hereunder") or, with respect to any Loan made, and any Letter of Credit
issued, after the Effective Date, in the ability of the Borrower and its
Consolidated Subsidiaries, taken as a whole to perform their obligations
hereunder, since the date of the most recent financial statements of the
Borrower and its Subsidiaries delivered to the Administrative Agent and
the Banks hereunder or in connection herewith; and
(b) the Administrative Agent shall have received such approvals,
opinions, documents or instruments as the Administrative Agent, the Issuing Bank
or any Bank may reasonably request.
Section 6.3. No Default Certificate and Deemed Representations.
Each notice of a Loan or request for a Letter of Credit shall be
accompanied by a certificate of the president or chief financial officer of the
Borrower certifying that the statements contained in Section 6.2(a) hereof are
true and correct on the date of such notice or submission and, unless the
Borrower otherwise notifies the Administrative Agent prior to such Borrowing or
issuance of any Letter of Credit, the acceptance by the Borrower of the proceeds
of any Loan thereof and the request by such Borrower for any Letter of Credit
shall constitute a representation and warranty that such statements are true and
correct as of the date of such Loan or Letter of Credit, as the case may be.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants that:
Section 7.1. Incorporation, Good Standing and Due Qualification;
Compliance with Law.
Except as set forth in Schedule 7.1, each of the Borrower and each of its
Subsidiaries is duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its assets and to transact the business in which it is now
engaged or presently proposes to be engaged, and is duly qualified as a foreign
corporation and in good standing under the laws of each other jurisdiction in
which such qualification is required except where the failure to so qualify
and/or be in good standing would not in any case or in the aggregate have a
material adverse effect on the operations, business, property or financial
condition of the Borrower or of the Borrower and its Subsidiaries taken as a
whole or on the ability of the Borrower or any Material Subsidiary to perform
its obligations hereunder or under its respective Subsidiary Guarantee, as the
case may be. In addition, the Borrower and each of its Subsidiaries is in
compliance with all laws, treaties, rules or regulations, or determination of an
arbitration or a court or other governmental authority, in each case applicable
to or binding upon it or any of its material property or to which it or any of
its
- 48 -
material property is subject, except to the extent that the failure to so comply
would not, in any case or in the aggregate, have a material adverse effect on
the operations, business, property or financial condition of the Borrower or any
such Subsidiary or on the ability of the Borrower or any Material Subsidiary to
perform its obligations hereunder or under its respective Subsidiary Guarantee,
as the case may be.
Section 7.2. Power and Authority; No Conflicts.
Except as set forth in Schedule 7.2 hereto, the execution, delivery and
performance by the Borrower of each of the Facility Documents to which it is a
party and by each Material Subsidiary of its respective Subsidiary Guarantee are
within their respective power and authority and have been duly authorized by all
necessary corporate action and do not and will not: (a) require any consent or
approval of its stockholders; (b) contravene its charter or by-laws; (c) violate
any provision of, or require any filing, registration, consent or approval
under, any law, rule, regulation (including, without limitation, the provisions
of Regulation G, T, U or X of the Federal Reserve Board as in effect from time
to time), order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to the Borrower or any such Subsidiary;
(d) result in a breach of or constitute a default or require any consent under
any indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower or any Material Subsidiary of the Borrower is a
party or by which any of its properties may be bound or affected; (e) result in
or require the creation or imposition of any Lien upon or with respect to any of
the properties now owned or hereafter acquired by the Borrower or any of its
Material Subsidiaries except in favor of the Administrative Agent for the
benefit of the Banks and the Issuing Bank; or (f) cause the Borrower or any of
its Material Subsidiaries to be in default under any such rule, regulation,
order, writ, judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument, except, in the case of clauses (c),
(d), (e) and (f) above, where such violation, failure to satisfy such
requirement, breach, default, failure to obtain consent or creation or
imposition of a Lien, as the case may be, would not, in any case or in the
aggregate, have a material adverse effect upon the operations, business,
property or financial condition of the Borrower or the Borrower and its
Subsidiaries taken as a whole or on the ability of the Borrower or any of its
Material Subsidiaries to perform its obligations hereunder or under its
respective Subsidiary Guarantee, as the case may be.
Section 7.3. Legally Enforceable Agreements.
Each Facility Document to which the Borrower or any Subsidiary of the
Borrower is a party is, or when delivered under this Agreement will be, a legal,
valid and binding obligation of the Borrower or such Subsidiary, as the case may
be, enforceable against the Borrower or such Subsidiary, as the case may be, in
accordance with its respective terms, except to the extent that such enforcement
may be limited by applicable bankruptcy, insolvency and other similar laws
affecting creditors' rights generally.
Section 7.4. Litigation.
- 49 -
Except as set forth in Schedule 7.4 hereto, there are no actions, suits or
proceedings pending or, to the knowledge of the Borrower or any of its
Subsidiaries, threatened, against or affecting the Borrower or any of its
Subsidiaries before any court, governmental agency or arbitrator, which may, in
any one case or in the aggregate, materially adversely affect the financial
condition, operations, properties or business of the Borrower or on the ability
of the Borrower or any Material Subsidiary to perform its obligations hereunder
or under its respective Subsidiary Guarantee, as the case may be.
Section 7.5. Financial Statements.
The balance sheet of the Borrower and its Consolidated Subsidiaries as at
August 28, 1999, and the related income statement and statement of cash flow of
the Borrower and its Consolidated Subsidiaries for the fiscal year then ended,
and the accompanying notes, together with the opinion thereon of Xxxxxx Xxxxxxxx
& Co., independent certified public accountants, are complete and correct in all
material respects and fairly present the financial condition of the Borrower and
its Consolidated Subsidiaries as at such date and the results of the operations
of the Borrower and its Consolidated Subsidiaries for the period covered by such
statements, all in accordance with GAAP consistently applied. As of the date
hereof, there are no liabilities of the Borrower or any of its Consolidated
Subsidiaries, fixed or contingent, which are material but are not reflected in
the financial statements referred to above, or in the notes thereto, other than
liabilities arising in the ordinary course of business since August 28, 1999,
and the liabilities created by this Agreement and the Subsidiary Guarantees. No
information, exhibit or report furnished by the Borrower or any Subsidiary of
the Borrower to the Issuing Bank or the Banks in connection with the negotiation
of, or pursuant to, this Agreement contained any material misstatement of fact
or omitted to state any fact necessary to make the statements contained therein
not materially misleading. Since the date of the most recent financial
statements delivered to the Banks hereunder, there has been no material adverse
change in the condition (financial or otherwise), business or operations of the
Borrower and its Subsidiaries, taken as a whole.
Section 7.6. Ownership and Liens.
Each of the Borrower and each of its Consolidated Subsidiaries has title
to, or valid leasehold interests in, all of its material properties and assets,
real and personal, including the properties and assets, and leasehold interests,
reflected in the financial statements referred to in Section 7.5 hereof, and
none of the property in which the Borrower or its Subsidiaries, or any of them,
has any right, title or interest and none of their leasehold interests is
subject to any Lien, except as disclosed in Schedule 7.10 hereto or Permitted
Liens.
Section 7.7. Taxes.
Each of the Borrower, its Subsidiaries and their respective Affiliates has
filed all tax returns (federal, state and local) required to be filed except
where the failure to file
- 50 -
would not, in any case, or in the aggregate, have a material adverse effect upon
the operations, business, property or financial condition of the Borrower and
its Subsidiaries, taken as a whole, or on the ability of the Borrower or any of
its Material Subsidiaries to perform its obligations hereunder or under its
respective Subsidiary Guarantee, as the case may be, and each of the Borrower,
its Subsidiaries and their respective Affiliates has paid all taxes, assessments
and governmental charges and levies shown thereon to be due, including interest
and penalties, other than taxes, assessments and governmental charges and levies
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves in conformity with GAAP shall have been provided on the
books of the Borrower, its Subsidiaries or their respective Affiliates, as the
case may be.
Section 7.8. ERISA.
Each of the Borrower, its Subsidiaries and their respective Affiliates is
in compliance in all material respects with all applicable provisions of ERISA
and the employee benefit provisions of the Code (including, without limitation,
any provisions of the Code, compliance with which is necessary for any intended
favorable tax treatment). No Reportable Event has occurred with respect to any
Plan; no notice of intent to terminate a Plan has been filed nor has any Plan
subject to Title IV of ERISA been terminated; no circumstance exists which
constitutes grounds under Section 4042 of ERISA entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, a Plan, nor has
the PBGC instituted any such proceedings; neither the Borrower, its Subsidiaries
nor any ERISA Affiliate has completely or partially withdrawn under Section 4201
or 4204 of ERISA from a Multiemployer Plan and the liability thereof in the
event of a withdrawal from all Multiemployer Plans would not exceed $3,000,000;
each of the Borrower, its Subsidiaries and each of their ERISA Affiliates has
met its minimum funding requirements under ERISA with respect to all of its
Plans and except as otherwise set forth on Schedule 7.8 hereto, there are no
Unfunded Vested Liabilities; and neither the Borrower, its Subsidiaries nor any
ERISA Affiliate has incurred any liability to the PBGC under ERISA; and except
as otherwise set forth on Schedule 7.8 hereto, neither the Borrower, its
Subsidiaries nor any its Affiliates has liability for welfare plan coverage of
employees after termination of employment except as may be required by the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
Section 7.9. Subsidiaries and Ownership of Stock.
The Borrower has no Material Subsidiaries except for those Material
Subsidiaries set forth on Schedule 7.9 hereto and other Material Subsidiaries
which, after the date hereof, shall have been established pursuant to Section
9.11 hereof and which shall have been theretofore disclosed in writing to the
Administrative Agent and the Banks.
Section 7.10. Credit Arrangements.
- 51 -
Schedule 7.10 hereto is a complete and correct list of all material credit
agreements, indentures, purchase agreements (other than agreements for the
purchase or sale of inventory entered into in the ordinary course of business),
guaranties, Capital Leases and other investments, agreements and arrangements in
effect on the date of this Agreement providing for or evidencing extensions of
credit to the Borrower, its Subsidiaries, or any of them (including agreements
and arrangements for the issuance of letters of credit or for acceptance
financing but excluding the Facility Documents) in respect of which the
Borrower, its Subsidiaries, or any of them, is in any manner directly or
contingently obligated (collectively, "Debt Agreements"); and the maximum
principal or face amounts of the credit in question are correctly stated, and
all Liens of any nature given or agreed to be given as security therefor are
correctly described or indicated in such Schedule. For the purposes of this
Section 7.10, a Debt Agreement shall be deemed material if the aggregate amount
of payments by the Borrower, its Subsidiaries or any of them required thereunder
exceeds $1,000,000 (each such Debt Agreement, a "Material Debt Agreement").
Section 7.11. Operation of Business.
Each of the Borrower and its Subsidiaries possesses all licenses, permits,
franchises, patents, copyrights, trademarks and trade names, or rights thereto,
to conduct its business substantially as now conducted and as presently proposed
to be conducted except where the failure to do so would not, in any case or in
the aggregate, have a material adverse effect upon the operations, business,
property or financial condition of the Borrower and its Subsidiaries, taken as a
whole, or on the ability of the Borrower or any Material Subsidiary to perform
its obligations hereunder or under its respective Subsidiary Guarantee, as the
case may be. To the best knowledge of the Borrower and its Subsidiaries, (i) the
Borrower and its Subsidiaries conduct their business without infringement or
claim of infringement of any material license, patent, trademark, trade name,
service xxxx, copyright, trade secret or other intellectual property right of
others and (ii) there is no infringement or claim of infringement by others of
any material license, patent, trademark, trade name, service xxxx, copyright,
trade secret or other intellectual property right of the Borrower or any of its
Subsidiaries, in each case, which would result in a material adverse effect on
the operations, business, property or financial condition of the Borrower and
its Subsidiaries, taken as a whole.
Section 7.12. No Default on Outstanding Judgments or Orders.
Each of the Borrower and its Subsidiaries has satisfied all judgments and
none of the Borrower or any of its Subsidiaries is in default with respect to
any judgment, writ, injunction, decree, rule or regulation of any court,
arbitrator or federal, state, municipal or other governmental authority,
commission, board, bureau, agency or instrumentality, domestic or foreign,
except to the extent that such defaults would not, in any case or in the
aggregate, have a material adverse effect on the operations, business, property
or financial condition of the Borrower and its Subsidiaries, taken as a whole,
or on the
- 52 -
ability of the Borrower or any of its Material Subsidiaries to perform its
obligations hereunder or under its respective Subsidiary Guarantee, as the case
may be.
Section 7.13. No Defaults on Other Agreements.
Neither the Borrower nor any of its Subsidiaries is a party to any
indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction which would in any
case or in the aggregate have a material adverse effect on the business,
properties, assets, operations or condition, financial or otherwise, of the
Borrower or the Borrower and its Subsidiaries, taken as a whole, or on the
ability of the Borrower or any of its Material Subsidiaries to perform its
obligations hereunder or under its respective Subsidiary Guarantee, as the case
may be. Neither the Borrower nor any of its Subsidiaries is in default in any
respect in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument material to its
business to which it is a party except where such default would not, in any case
or in the aggregate, have a material adverse effect on the business, properties,
assets, operations or condition, financial or otherwise of the Borrower or the
Borrower and its Subsidiaries, taken as a whole, or on the ability of the
Borrower or any of its Material Subsidiaries to perform its obligations
hereunder or under its respective Subsidiary Guarantee, as the case may be.
Section 7.14. Labor Disputes and Acts of God.
Neither the business nor the properties of the Borrower or of any of its
Subsidiaries are affected by any fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy or other casualty (whether or not covered by insurance),
materially and adversely affecting the business or properties or the operations
of the Borrower and its Subsidiaries, taken as a whole, or the ability of the
Borrower or any of its Material Subsidiaries to perform its obligations
hereunder or under its respective Subsidiary Guarantee, as the case may be.
Section 7.15. Governmental Regulation.
Neither the Borrower nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, as amended, the Investment
Company Act of 1940, as amended, or any other statute or regulation limiting its
ability to incur indebtedness for money borrowed as contemplated hereby.
Section 7.16. Partnerships.
Except as disclosed on Schedule 7.16 hereto, neither the Borrower nor any
of its Subsidiaries is a partner in any partnership.
Section 7.17. No Forfeiture Proceedings.
- 53 -
Neither the Borrower nor any of its Subsidiaries is engaged in nor
proposes to be engaged in the conduct of any business or activity which is
likely to result in a Forfeiture Proceeding and no Forfeiture Proceeding against
any of them is pending or, to the best knowledge of the Borrower or any of its
Subsidiaries, threatened, except as set forth on Schedule 7.17 hereto.
Section 7.18. No Default or Event of Default.
No Default or Event of Default has occurred and is continuing.
Section 7.19. Solvency.
The Borrower is Solvent. Each of the Material Subsidiaries, before and
after giving effect to its respective Subsidiary Guarantee, is Solvent.
Section 7.20. Material Adverse Change.
No event or series of events has occurred which would result in a material
adverse effect on the operations, business, property or financial condition of
the Borrower and its Subsidiaries, taken as a whole, or on the ability of the
Borrower or any of its Subsidiaries to perform its obligations hereunder or
under the other Facility Documents to which it is a party.
Section 7.21. Name.
During the five years prior to the Effective Date, neither the Borrower
nor any of its Material Subsidiaries has been known under, or transacted
business using, any name or trade style except for the name set forth above such
entity's signature on this Agreement and except insofar as such entity has used
trade styles all of which are described on Schedule 7.21 hereto. The Borrower
and/or a Material Subsidiary possesses valid and enforceable rights to use
(without payment) each of the foregoing names and trade styles within the
respective jurisdictions in which such names or trade styles are currently being
used and neither the Borrower nor any Material Subsidiary has reason to believe
that any of such names or trade styles conflict with any rights of others.
Section 7.22. Debt.
The Borrower and its Material Subsidiaries have no Debt, except (a) the
Obligations, (b) the Debt described on Schedule 7.10 hereto and (c) other Debt
permitted by Section 9.1 hereof.
Section 7.23. Nature of Business.
The Borrower has no business except its business as a holding company and
any business in connection with the transactions contemplated by this Agreement.
- 54 -
Section 7.24. Fiscal Year End.
(a) Except as otherwise provided in Section 7.24(b) hereof, the
Borrower's fiscal years set forth below will end on the dates set forth below
opposite such fiscal year:
Fiscal Year Ending Date
2000 August 26, 2000
2001 September 1, 2001
2002 August 31, 2002
2003 August 30, 2003
2004 Xxxxxx 00, 0000
(x) The Borrower may, with the prior written consent of the
Administrative Agent (which consent shall not be withheld unreasonably), change
its fiscal year end dates set forth in Section 7.24 (a) hereof for any fiscal
year after 2001, subject to the following conditions and limitations:
(i) The Borrower shall notify the Administrative Agent that it
proposes to make such proposed change not later than the last day of
fiscal year 2000, in the case of a change respecting fiscal year 2002, not
later than the last day of fiscal year 2001, in the case of a change
respecting fiscal year 2003 and not later than the last day of fiscal year
2002, in the case of a change respecting fiscal year 2004;
(ii) The change of fiscal year end date for any such year shall not
result in the new fiscal year end date being more than ten days prior or
subsequent to the date set forth in Section 7.24(a) hereof for such fiscal
year; and
(iii) In the event that the Borrower elects to change the fiscal
year end date for any of such fiscal years, the certificates required to
be delivered to the Administrative Agent, the Issuing Bank and each of the
Banks pursuant to Section 8.8 hereof demonstrating compliance with the
covenants contained herein for such fiscal period shall, at the election
of the Borrower or upon the request of the Administrative Agent or the
Required Banks, include calculations setting forth the adjustments
necessary to demonstrate how the Borrower is in compliance with the
financial covenants based upon the fiscal year end date set forth in
Section 7.24(a) hereof for such fiscal year.
Section 7.25. Environmental Matters.
- 55 -
Except as set forth on Schedule 7.25 hereto and except as would not have a
material adverse effect on the operations, business, property or financial
condition of the Borrower or the Borrower and its Subsidiaries taken as a whole
or on the ability of the Borrower or any of its Material Subsidiaries to perform
its obligations hereunder or under its respective Subsidiary Guarantee, as the
case may be:
(a) none of the Real Property contains, or to the best knowledge of
the Borrower has previously contained, any hazardous or toxic waste or
substances or underground storage tanks;
(b) the Real Property is in compliance with all applicable federal,
state and local environmental standards and requirements affecting such Real
Property, and there are no environmental conditions which could interfere with
the continued use of the Real Property;
(c) neither the Borrower nor any of its Subsidiaries has received
any notices of violations or advisory action by regulatory agencies regarding
environmental control matters or permit compliance;
(d) no Hazardous Substance has been transferred from any of the Real
Property to any other locations which is not in compliance with all applicable
environmental laws, regulations or permit requirements; and
(e) with respect to the Real Property, there are no proceedings,
governmental administrative actions or judicial proceedings pending or, to the
best knowledge of the Borrower, contemplated under any federal, state or local
law regulating the discharge of Hazardous Substances or any other hazardous or
toxic materials or substances into the environment, to which the Borrower or any
of its Subsidiaries is named as a party.
Section 7.26. Year 2000 Issue.
The Borrower and its Subsidiaries have reviewed the effect of the Year
2000 Issue on the computer software, hardware and firmware systems and equipment
containing embedded microchips owned or operated by or for the Borrower and its
Subsidiaries or used or relied upon in the conduct of their business (including
systems and equipment supplied by others or with which such computer systems of
the Borrower and its Subsidiaries interface). The costs to the Borrower and its
Subsidiaries of any reprogramming required as a result of the Year 2000 Issue to
permit the proper functioning of such systems and equipment and the proper
processing of data, and the testing of such reprogramming, and of the reasonably
foreseeable consequences of the Year 2000 Issue to the Borrower or any of its
Subsidiaries (including reprogramming errors and the failure of systems or
equipment supplied by others) are not reasonably expected to result in a Default
or Event of Default or to have a material adverse effect on
- 56 -
the business, assets, operations, prospects or condition (financial or
otherwise) of the Borrower or any of its Subsidiaries.
ARTICLE 8. AFFIRMATIVE COVENANTS
So long as any of the Notes shall remain unpaid, or any Bank shall
have any Commitment under this Agreement or any Aggregate Letter of Credit
Outstandings shall be outstanding, the Borrower shall and shall cause each of
its Subsidiaries to:
Section 8.1. Maintenance of Existence.
Except as otherwise provided in this Agreement, preserve and maintain its
corporate existence and remain in good standing in the jurisdiction of its
organization, and qualify and remain qualified as a foreign corporation in each
jurisdiction in which such qualification is required except where the failure to
so qualify and/or be in good standing would not in any case or in the aggregate
have a material adverse effect on the operations, business, property or
financial condition of the Borrower or such Subsidiary or on the ability of the
Borrower or such Subsidiary to perform its obligations hereunder or under the
other Facility Documents to which it is a party.
Section 8.2. Conduct of Business.
Continue to engage in the business conducted by it (or related businesses)
on the date hereof.
Section 8.3. Maintenance of Properties.
Maintain, keep and preserve all of its properties (tangible and
intangible) necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear and tear excepted, except where the
failure to do so would not in any case or in the aggregate have a material
adverse effect on the operations, business, property or financial condition of
the Borrower or such Subsidiary or on the ability of the Borrower or such
Subsidiary to perform its obligations hereunder or under the other Facility
Documents to which it is a party.
Section 8.4. Maintenance of Records.
Keep adequate records and books of account in which complete entries,
reflecting all financial transactions of such entity, will be made.
Section 8.5. Maintenance of Insurance.
Maintain insurance with financially sound and reputable insurance
companies or associations in such amounts and covering such risks as are usually
carried by companies engaged in the same or a similar business and similarly
situated and as are required by the
- 57 -
Facility Documents. The Borrower shall provide the Administrative Agent notice
that such policies have been paid in full and shall deliver the policy or
policies of such insurance or certificates of insurance to the Administrative
Agent if the Administrative Agent so requests and, in any event, at least once
per calendar year.
Section 8.6. Compliance with Laws.
Comply with all applicable laws, rules, regulations and orders ("Laws"),
except to the extent that the failure to so comply would not have a material
adverse effect on the operations, business, property or financial condition of
the Borrower or such Subsidiary or on the ability of the Borrower or such
Subsidiary to perform its obligations hereunder or under the other Facility
Documents to which it is a party; and cause to be conducted, at the sole cost of
the Borrower or its Subsidiaries, or any of them, any real estate appraisals
that may be required to be conducted pursuant to any applicable Laws.
Section 8.7. Right of Inspection.
Subject to the provisions of Section 13.15 hereof, at any reasonable time
upon reasonable notice during normal business hours and from time to time,
permit the Administrative Agent, the Issuing Bank or any Bank or any agent or
representative thereof, to examine and make copies and abstracts from the
records and books of account of, and visit the properties of, such entity and to
discuss the affairs, finances and accounts of such entity with any of its
officers and directors and such entity's independent accountants.
Section 8.8. Reporting Requirements.
Furnish directly to the Administrative Agent, the Issuing Bank and each of
the Banks:
(a) as soon as available and in any event within 105 days after the
end of each fiscal year of the Borrower, audited consolidated and unaudited
consolidating financial statements of the Borrower and its Consolidated
Subsidiaries which shall include a balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year, together with a
consolidated and consolidating income statement and statement of cash flows of
the Borrower and its Consolidated Subsidiaries for such fiscal year and such
other reports as the Administrative Agent, on behalf of the Issuing Bank and the
Banks, shall reasonably require, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date and period in
the prior fiscal year and all prepared in accordance with GAAP and accompanied
by an unqualified opinion thereon by Xxxxxx Xxxxxxxx & Co., or other independent
certified public accountants reasonably acceptable to the Administrative Agent
and the Required Banks together with an executive summary of the management
letter prepared by such independent certified public accountants; provided,
however, that if a Default or Event of
- 58 -
Default has occurred and is continuing, the full text of such management letter
shall be provided to the Administrative Agent, the Issuing Bank and the Banks;
(b) as soon as available and in any event within 60 days after the
end of each fiscal quarter of the Borrower, an unaudited consolidated and
consolidating balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter, together with a consolidated and consolidating
income statement and statement of cash flows of the Borrower and its
Consolidated Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, all in reasonable detail
and stating in comparative form the respective figures for the corresponding
date and period in the previous fiscal year and all prepared in accordance with
GAAP (subject to year-end adjustments and except for the absence of GAAP notes
thereto) and attested to by the president or chief financial officer of the
Borrower, each in form and content reasonably satisfactory to the Administrative
Agent;
(c) simultaneously with the delivery of the financial statements
referred to in Sections 8.8(a) and (b) above, a certificate of the president or
chief financial officer of the Borrower (i) certifying that to the best of his
knowledge no Default or Event of Default has occurred and is continuing or, if a
Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof and the action which is proposed to be taken with respect
thereto, and (ii) with computations demonstrating compliance with the covenants
contained in Article 10 hereof;
(d) simultaneously with the delivery of the annual financial
statements referred to in Section 8.8(a) hereof, a certificate of the
independent public accountants who audited such statements to the effect that,
in making the examination necessary for the audit of such statements, they have
obtained no knowledge of any condition or event which constitutes a Default or
Event of Default, or if such accountants shall have obtained knowledge of any
such condition or event, specifying in such certificate each such condition or
event of which they have knowledge and the nature and status thereof;
(e) as soon as available and in any event not more than 120 days
after the end of each fiscal year of the Borrower, copies of the Borrower's
consolidated annual financial projections in form similar to those provided to
the Administrative Agent, the Issuing Bank and the Banks prior to the Effective
Date for the then current fiscal year, for information purposes only;
(f) promptly after the Borrower or any of its Subsidiaries becomes
aware of the commencement thereof, notice of all actions, suits, and proceedings
before any court or governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, affecting the Borrower or any
Subsidiary of the Borrower which could (i) have a material adverse effect on the
business, condition (financial or otherwise), operations, performance or
properties of the Borrower and its Subsidiaries, taken as a whole, (ii) impair
the Borrower or any such Subsidiary's ability to perform
- 59 -
under the Facility Documents to which it is a party, or (iii) subject the
Borrower or any Subsidiary to monetary liability in an amount of $500,000 or
more;
(g) as soon as possible and in any event within five days after a
Default or an Event of Default has occurred and is continuing, a written notice
setting forth the details of such Default or Event of Default and the action
which is proposed to be taken by the Borrower with respect thereto;
(h) as soon as possible and in any event within five days after the
Borrower or any of its Subsidiaries knows or has reason to know that any of the
events or conditions specified below with respect to any Plan or Multiemployer
Plan has occurred or exist, a statement signed by a senior financial officer of
the Borrower or such Subsidiary setting forth details respecting such event or
condition and the action, if any, which the Borrower, such Subsidiary or any
ERISA Affiliate proposes to take with respect thereto (and a copy of any report
or notice required to be filed with or given to PBGC by the Borrower, any of its
Subsidiaries or an ERISA Affiliate with respect to such event or condition):
(i) any Reportable Event;
(ii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Borrower, or any of its
Subsidiaries or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by PBGC with respect to such Multiemployer
Plan;
(iv) the complete or partial withdrawal by the Borrower, any of its
Subsidiaries or any ERISA Affiliate under Section 4201 or 4204 of ERISA
from a Multiemployer Plan, or the receipt by the Borrower, any of its
Subsidiaries or any ERISA Affiliate of notice from a Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA or that it intends to terminate or has terminated under
Section 4041A of ERISA; and
(v) the institution of a proceeding by a fiduciary or any
Multiemployer Plan against the Borrower, any of its Subsidiaries or any
ERISA Affiliate to enforce Section 515 of ERISA, which proceeding is not
dismissed within 30 days;
(i) promptly after the furnishing thereof, copies of any statement
or report furnished to any other party pursuant to the terms of any Material
Debt Agreement and not otherwise required to be furnished to the Administrative
Agent, the Banks and the Issuing Bank pursuant to any other clause of this
Section 8.8;
- 60 -
(j) promptly after the commencement thereof or promptly after the
Borrower or any of its Subsidiaries knows of the commencement or threat thereof,
notice of any Forfeiture Proceeding;
(k) promptly after the sending or filing thereof, copies of all
reports which Borrower sends to its security holders generally, and copies of
all reports and registration statements which Borrower or any of its Material
Subsidiaries files with the Securities and Exchange Commission or any national
securities exchange;
(l) promptly after the Borrower and/or one of its Acquisition
Subsidiaries makes an Investment in a Joint Venture Company, a true copy of each
partnership/joint venture agreement with respect to such Joint Venture Company;
(m) as soon as available and in any event within 120 days after the
end of each fiscal year of each Joint Venture Company in which the Borrower
and/or one of its Acquisition Subsidiaries has an Investment, audited financial
statements of each such Joint Venture Company which shall include its balance
sheet as of the end of such fiscal year, together with an income statement, and
statement of cash flows for such fiscal year and such other reports as the
Administrative Agent, on behalf of the Issuing Bank and the Banks, shall
reasonably require, all in reasonable detail and stating in comparative form the
respective figures for the corresponding date and period in the prior fiscal
year and all prepared in accordance with GAAP and accompanied by an unqualified
opinion thereon by independent certified public accountants reasonably
acceptable to the Administrative Agent and the Required Banks together with an
executive summary of the management letter prepared by such independent
certified public accountants; provided, however, that if a Default or Event of
Default has occurred and is continuing, the full text of such management letter
shall be provided to the Administrative Agent, the Issuing Bank and the Banks;
(n) as soon as available and in any event within 60 days after the
end of each fiscal quarter of each Joint Venture Company in which the Borrower
and/or one of its Acquisition Subsidiaries has an Investment, an unaudited
balance sheet of each such Joint Venture Company as of the end of such quarter,
together with an income statement for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, all in reasonable
detail and stating in comparative form the respective figures for the
corresponding date and period in the previous fiscal year and all prepared in
accordance with GAAP (subject to year-end adjustments and except for the absence
of GAAP notes thereto) and attested to by an authorized officer of each
applicable Joint Venture Company, each in form and content reasonably
satisfactory to the Administrative Agent; and
(o) such other information respecting the condition or operations,
financial or otherwise of the Borrower, any of its Subsidiaries or any
Affiliates of any of the foregoing as the Administrative Agent may from time to
time reasonably request.
- 61 -
Section 8.9. Payment of Obligations.
Pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, all of its material Debt and other
material obligations of whatever nature (including any obligation for taxes or
wages) except for any Debt or other material obligation which is being contested
in good faith and with respect to which, on a consolidated basis, adequate
reserves in conformity with GAAP shall have been provided on the books of the
Borrower or the applicable Subsidiary.
Section 8.10. Affiliate Guarantee.
In the event that aggregate loans, Dividends or other distributions or
Investments from the Borrower or any of its Subsidiaries to any Affiliate
thereof (excluding Dividends made by the Borrower to any of its shareholders in
accordance with Section 9.15 hereof) exceed $5,000,000 in principal amount at
any time, cause such Affiliate to immediately, and in any event within 10
Banking Days thereafter, execute and deliver to the Administrative Agent a
guarantee of the Debt of the Borrower hereunder, which guarantee shall be
substantially in a form approved by the Administrative Agent and the Required
Banks.
Section 8.11. Notices With Respect to Certain Debts.
Promptly notify each of the Banks of the failure of any of the Borrower or
any Subsidiary to (a) pay any Debt or Debts when due and payable, after giving
effect to any applicable grace period, in the aggregate (with respect to the
Borrower and its Subsidiaries) amount of $500,000 or more, or (b) perform or
observe any term, covenant or condition on the part of any of the foregoing
entities to be performed or observed under any agreement or instrument relating
to any such Debt or Debts.
Section 8.12. Use of Proceeds.
Use the proceeds of the Loans and Letters of Credit only for the purposes
enumerated in Section 2.3 hereof, in the case of the Borrower.
Section 8.13. Solvency.
Continue to be Solvent and ensure that it and each of its Material
Subsidiaries continues to be Solvent.
Section 8.14. Additional Subsidiary Guarantees and Other Subsidiary
Guarantee Issues.
Cause each Person which becomes a Material Subsidiary after the Effective
Date to execute and deliver a Subsidiary Guarantee to the Administrative Agent;
provided, that, if at any time there are Excluded Subsidiaries that have Total
Subsidiary Assets in the aggregate in excess of $10,000,000, the Borrower shall
cause certain of such
- 62 -
Excluded Subsidiaries (which the Borrower shall choose in its sole discretion)
to execute, or become a party to, a Subsidiary Guarantee, such that after giving
effect thereto the remaining Excluded Subsidiaries have Total Subsidiary Assets
of not more than $10,000,000.
Section 8.15. Indemnity (Environmental Matters).
Indemnify the Administrative Agent, the Syndication Agent, the Issuing
Bank and each Bank against any liability, loss, cost, damage, or expense
(including, without limitation, reasonable attorneys' fees) arising from (i) the
imposition or recording of a Lien by any local, state, or federal government or
governmental agency or authority pursuant to any Environmental Laws; (ii) claims
of any private parties regarding violations of Environmental Laws; and (iii)
costs and expenses (including, without limitation, reasonable attorneys' fees
and fees incidental to the securing of repayment of such costs and expenses)
incurred by the Borrower or any of its Subsidiaries or the Administrative Agent,
the Syndication Agent, the Issuing Bank or any Bank in connection with
compliance by the Borrower or any of its Subsidiaries or the Administrative
Agent, the Syndication Agent, the Issuing Bank and/or any Bank with any statute,
regulation or order issued pursuant to any Environmental Laws by any local,
state or federal government or governmental agency or authority.
Section 8.16. Year 2000 Issue.
Take all necessary action to at all times ensure that the computer
software, hardware and firmware systems and equipment containing embedded
microchips owned or operated by or for the Borrower and its Subsidiaries or used
or relied upon in the conduct of their business (including systems and equipment
supplied by others or with which such systems of the Borrower or any of its
Subsidiaries interface) permits the proper functioning of such computer systems
and other equipment in light of the Year 2000 Issue. At the request of the
Administrative Agent, the Issuing Bank or any Bank, the Borrower shall provide,
and shall cause each of its Subsidiaries to provide, to the Administrative
Agent, the Issuing Bank and each Bank reasonable assurance of its compliance
with the preceding sentence.
ARTICLE 9. NEGATIVE COVENANTS
So long as any of the Notes shall remain unpaid or any Bank shall have any
Commitment under this Agreement or any Aggregate Letter of Credit Outstandings
shall be outstanding, the Borrower shall not and shall not permit its
Subsidiaries to:
Section 9.1. Debt.
Create, incur, assume or suffer to exist any Debt, except:
- 63 -
(a) The Obligations;
(b) Debt described in Schedule 7.10 hereto, and any renewals,
extensions or refinancings thereof provided, that such renewals, extensions or
refinancings are on terms no less favorable to the Borrower or the relevant
Subsidiary of the Borrower than the original terms of such Debt;
(c) Subordinated Debt;
(d) Debt incurred in connection with operating leases entered into
by the Borrower or its Subsidiaries, or any of them, consistent with past
practice or in the ordinary course of business;
(e) Debt of the Borrower or its Subsidiaries, or any of them,
secured by Permitted Liens;
(f) Current liabilities in respect of taxes, assessments and
governmental charges and levies incurred, or claims for labor, materials,
inventory, services, supplies and rentals incurred, or for goods or services
purchased, incurred in the ordinary course of business;
(g) Capital Leases, provided that the aggregate initial present
value of such Capital Leases does not exceed $2,500,000 in any fiscal year;
(h) Debt of the Borrower to any Subsidiary of the Borrower, or of
any Subsidiary of the Borrower to the Borrower or any other Subsidiary of the
Borrower;
(i) Permitted Assumed Acquisition Debt, but only so long as such
Debt remains Permitted Assumed Acquisition Debt;
(j) Additional unsecured Debt not contemplated by clauses (a)
through (i) above, so long as (i) such Debt shall not exceed $40,000,000 in the
aggregate for the Borrower and all Subsidiaries of the Borrower at any one time
outstanding and (ii) such Debt is under terms and conditions satisfactory to the
Administrative Agent; and
(k) Interest Rate Protection Arrangements reasonably satisfactory to
the Administrative Agent.
Section 9.2. Liens.
Create, incur, assume or suffer to exist any Lien, upon or with respect to
any of its property, now owned or hereafter acquired, except the following Liens
("Permitted Liens"):
(a) Liens in favor of the Administrative Agent (on behalf and for
the ratable benefit of the Banks) securing the Obligations;
- 64 -
(b) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained in conformity with GAAP;
(c) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than 30 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves in accordance with
GAAP have been established;
(d) Liens under workers' compensation, unemployment insurance,
social security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases,
public or statutory obligations, surety, stay, appeal, indemnity, performance or
other similar bonds, or other similar obligations arising in the ordinary course
of business;
(f) judgment and other similar Liens arising in connection with
court proceedings; provided that the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;
(g) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by the Borrower or any of its Subsidiaries of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;
(h) purchase money Liens on any personal property heretofore or
hereafter acquired or the assumption of any Lien on property existing at the
time of such acquisition, or a Lien incurred in connection with any conditional
sale or other title retention agreement or a Capital Lease; provided, that such
Liens attach only to the property as acquired and do not extend to any
additional property of the Borrower or of any of its Subsidiaries;
(i) Liens securing Permitted Assumed Acquisition Debt to the extent
described in the definition of Permitted Assumed Acquisition Debt; and
(j) Liens existing on the date hereof and described on Schedule 7.10
hereto.
Section 9.3. Investments.
- 65 -
Make any Investment in any Person, except (i) loans and advances to
vendors of the Borrower and its Subsidiaries in an amount up to $500,000 in the
aggregate at any one time outstanding, (ii) loans and other distributions to
Affiliates in accordance with Section 9.13 hereof, (iii) Permitted Acquisitions,
Permitted Equity Investments and Investments in Acquisition Subsidiaries all in
accordance with Section 13.6 hereof, (iv) Investments in Subsidiaries existing
on the date hereof, and (v) the following Investments: (A) obligations issued or
guaranteed by states or municipalities within the United States of America; (B)
obligations issued or guaranteed by the United States of America or any agency
or subdivision thereof; (C) certificates of deposit, time deposits, Eurodollar
certificates of deposit, bankers acceptances and other "money market
instruments" issued by any bank, trust company or financial institution
organized under the laws of the United States of America or any state thereof
(or, in the case of Eurodollar certificates of deposit, a branch of any such
bank, trust company or financial institution) having capital and surplus in an
aggregate amount not less than $100,000,000; (D) commercial paper rated at least
Prime-1 by Xxxxx'x Investors Service, Inc. or A-1 by Standard & Poor's Ratings
Group and (E) repurchase agreements entered into with any bank, trust company or
financial institution organized under the laws of the United States of America
or any state thereof having capital and surplus in an aggregate amount not less
than $100,000,000 and relating to any of the obligations referred to in clauses
(A), (B) and (C) above; in each case maturing or being due or payable in full
not more than one year after the Borrower's or such Subsidiary's acquisition
thereof.
Section 9.4. Sale of Assets.
Sell, lease, assign, transfer or otherwise dispose of any of its now owned
or hereafter acquired assets, except:
(i) assets disposed of in the ordinary course of business;
(ii) the sale or other disposition of assets no longer used or
useful in the conduct of its business;
(iii) sales or dispositions of assets in arm's length transactions,
provided that the aggregate net proceeds of any such sale, when added to
all other sales made by the Borrower and its Subsidiaries in any fiscal
year, shall not exceed $1,000,000 in such fiscal year;
(iv) Permitted Dispositions; provided that (a) immediately before
and after giving effect to each such Permitted Disposition, no Default or
Event of Default shall or would exist, (b) 75% of the total consideration
received or to be received therefor by the Borrower or any Acquisition
Subsidiary shall be payable in cash or cash equivalents on or before the
closing thereof and shall not be less than the fair market value thereof
as reasonably determined by the Managing Person of the Borrower or such
Acquisition Subsidiary, as the case may be, (c) the Term Loans are prepaid
as required by Section 4.2 hereof and (d)
- 66 -
the Administrative Agent and the Banks shall have received (A) written
notice thereof not less than ten Banking Days prior to each such Permitted
Disposition, and (B) a certificate in respect thereof signed by a duly
authorized officer of the Borrower identifying the property or other asset
subject to such Permitted Disposition, and certifying that the
consideration received or to be received by the Borrower or such
Acquisition Subsidiary, as the case may be, for such property has been
determined by the Managing Person thereof to be not less than the fair
market value of such property and certifying as to the total consideration
to be paid in respect of such Permitted Disposition, together with
estimates of items to be deducted therefrom in arriving at the net
proceeds thereof; and
(v) sales of Permitted Equity Investments.
Section 9.5. Transactions with Affiliates.
Enter into any transaction, including, without limitation, the purchase,
sale or exchange of property or the rendering of any service, with any
Affiliate, except (a) (unless elsewhere restricted hereunder) in the ordinary
course of and pursuant to the reasonable requirements of the Borrower's or its
relevant Subsidiary's business and (except with respect to intercompany transfer
pricing transactions between the Borrower and a Subsidiary or between two
Subsidiaries) upon fair and reasonable terms no less favorable to the Borrower
or its relevant Subsidiary, as the case may be, than would be obtained in a
comparable arm's length transaction with a Person not an Affiliate and (b) Debt
transactions permitted pursuant to Section 9.1(e) hereof. Additionally, and
subject to the other provisions of this Agreement (including, but not limited
to, Section 9.3 hereof), the Borrower and its Subsidiaries may continue to lease
their existing facilities from the relevant Real Estate Affiliates; the Borrower
may make loans, Dividends and other distributions in accordance with Sections
9.13 and 9.15 hereof; and the Borrower and its Subsidiaries may engage in
transactions as provided in Section 13.6 hereof.
Section 9.6. Mergers, Etc.
(a) Merge or consolidate with, or sell, assign, lease or otherwise dispose
of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to,
any Person, or (b) acquire all or substantially all of the assets or the
business of any Person (or enter into any agreement to do any of the foregoing),
except for (i) Permitted Acquisitions, (ii) the merger of a Subsidiary of the
Borrower into the Borrower or a Material Subsidiary or (iii) the acquisition of
all or substantially all of the assets of a Subsidiary of the Borrower by the
Borrower or a Material Subsidiary.
Section 9.7. Acquisitions.
Acquire or commit or agree to acquire any material portion of the stock,
securities or assets of any other Person, except in the context of a Permitted
Acquisition or
- 67 -
Permitted Equity Investment or in connection with (i) the merger of a Subsidiary
of the Borrower into the Borrower or a Material Subsidiary or (ii) the
acquisition of all or substantially all of the assets of a Subsidiary of the
Borrower by the Borrower or a Material Subsidiary.
Section 9.8. No Activities Leading to Forfeiture.
Engage in the conduct of any business or activity which would be likely to
result in a Forfeiture Proceeding.
Section 9.9. Corporate Documents; Fiscal Year.
Amend, modify or supplement its certificate or articles of incorporation
or by-laws in any way which would materially adversely affect the ability of the
Borrower or any Material Subsidiary to perform its obligations hereunder or
under its respective Subsidiary Guarantee, as the case may be, or change its
fiscal year other than in accordance with Section 7.24 hereof.
Section 9.10. Redemptions, Etc.
Notwithstanding Section 9.15 hereof, (a) purchase or redeem any of its
stock or other securities, or retire any of its stock, or take any action which
would have an effect equivalent to any of the foregoing or (b) pay any cash
Dividends, make any capital distribution in cash or other property or take any
action which would have an effect equivalent to any of the foregoing, if a
Default or Event of Default has occurred and is continuing or would result
therefrom.
Section 9.11. Creation of Subsidiaries, etc.
Except as permitted by Section 13.6 hereof, create any direct or indirect
subsidiary or divest itself of any material assets by transferring them to any
existing or future subsidiary (other than a Material Subsidiary) or by entering
into a partnership, joint venture or similar arrangement, or make any material
change to its capital structure or enter into any management contract permitting
any third party (other than a Material Subsidiary or the Borrower) to have
management rights with respect to its business.
Section 9.12. Real Estate Loans to Affiliates.
Make any loan or otherwise extend credit to any Affiliate to provide funds
to permit such Affiliate to purchase real property.
Section 9.13. Loans to Affiliates; Distributions.
Except as permitted by Section 9.15 hereof in the case of the Borrower,
permit loans or Dividends or other distributions or Investments from the
Borrower or any of its Subsidiaries to any Affiliate thereof to exceed $500,000
at any time with respect to such
- 68 -
Affiliate, unless such Affiliate shall have executed a guarantee of the
obligations of the Borrower in accordance with Section 8.10 hereof.
Section 9.14. Broker's Fees.
Pay any broker or finder any compensation for services rendered with
respect to the transactions contemplated by this Agreement or any other Facility
Document.
Section 9.15. Dividends.
Subject to Section 9.10 hereof, (a) declare or pay in any fiscal year
Dividends in excess of the sum of (i) fifty percent (50%) of the accrued net
income reflected in the immediately preceding fiscal year's financial statements
plus (ii) $10,000,000, or (b) pay in any fiscal year Dividends in excess of the
sum of (i) fifty percent (50%) of the accrued net income reflected in the
immediately preceding fiscal year's financial statements plus (ii) all Dividends
declared in accordance with clause (a) above in respect of any prior fiscal year
to the extent not previously paid plus (iii) $10,000,000.
Section 9.16. Nature of Business.
In the case of the Borrower, enter into any business other than the
business contemplated by Section 7.23 hereof, and in the case of each Subsidiary
of the Borrower, enter into any business except such business which is
comparable to the business in which Sid Tool is engaged as of the Effective
Date.
ARTICLE 10. FINANCIAL COVENANTS
So long as any of the Notes shall remain unpaid, or any Bank shall have
any Commitment or any Aggregate Letter of Credit Outstandings shall be
outstanding under this Agreement:
Section 10.1. Minimum Effective Net Worth.
The Borrower and its Consolidated Subsidiaries shall maintain as at the
last day of each fiscal quarter, Effective Net Worth of not less than the sum of
$185,000,000, plus, with respect to the first fiscal quarter in fiscal year 2000
and with respect to each fiscal quarter thereafter, on a cumulative basis, the
sum of (i) the Adjustment Amount for such fiscal quarter then ending, plus (ii)
the Adjustment Amount for each such prior fiscal quarter.
Section 10.2. Quick Ratio.
The Borrower and its Consolidated Subsidiaries shall maintain as at the
last day of each fiscal quarter a ratio of (i) the sum of cash, cash equivalents
and accounts
- 69 -
receivable to (ii) Total Current Liabilities minus the current portion of Long
Term Debt of not less than 0.80:1.00.
Section 10.3. Maximum Leverage.
The Borrower and its Consolidated Subsidiaries shall maintain as at the
last day of each fiscal quarter a ratio of Total Senior Liabilities to Effective
Net Worth of not more than 1.40:1.0.
Section 10.4. Maximum Cash Flow Coverage Ratio.
The Borrower and its Consolidated Subsidiaries shall maintain as at the
last day of each fiscal quarter, a ratio of Total Senior Debt to EBITDA minus
Capital Expenditures of not more than 3.0 to 1.0, as determined at the end of
each such fiscal quarter for the four consecutive fiscal quarters then ended.
Section 10.5. Minimum Interest Coverage Ratio.
The Borrower and its Consolidated Subsidiaries shall maintain as at the
last day of each fiscal quarter, a ratio of Operating Income to Interest Expense
of at least 2.50 to 1.0, as determined at the end of each such fiscal quarter
for the then preceding four fiscal quarters.
Section 10.6. Positive Earnings.
The Borrower and its Consolidated Subsidiaries shall maintain at all times
positive Net Income (excluding the effect of extraordinary items, one-time
charges related to a Permitted Acquisition and any changes in accounting
policies), as determined at the end of each fiscal quarter for the then
preceding four fiscal quarters.
Compliance with all of the financial covenants contained in this Article
10 shall be determined by reference to the financial statements of the Borrower
delivered to the Banks in accordance with Section 8.8 hereof. All financial
covenants shall be applicable at all times and shall be tested on a quarterly
basis and on a consolidated (not consolidating) basis.
ARTICLE 11. EVENTS OF DEFAULT
Section 11.1. Events of Default.
Any of the following events shall be an "Event of Default":
(a) The Borrower or any Subsidiary of the Borrower shall: (i) fail
to pay the principal of or interest on any Loan as and when due and payable or
(ii) fail to pay any fee or other amount (including, without limitation, any
unreimbursed amount with
- 70 -
respect to any Letter of Credit) due hereunder as and when due and payable; if
any such failure referred to in this clause (ii) shall continue for two
consecutive Banking Days after delivery to the Borrower of notice (pursuant to
Section 13.7 hereof) of such failure;
(b) Any representation or warranty made or deemed made by the
Borrower or any Subsidiary of the Borrower in this Agreement or in any other
Facility Document or which is contained in any certificate, document, opinion,
financial or other statement furnished at any time under or in connection with
any Facility Document shall prove to have been incorrect in any material respect
on or as of the date made or deemed made or furnished;
(c) The Borrower or any Subsidiary of the Borrower shall: (i) fail
to perform or observe any term, covenant or agreement contained in any of (A)
Section 2.3 hereof, (B) Article 10 hereof or (C) any other Facility Document
(with respect to any such Facility Documents, other than the obligations
specifically referred to in Section 11.1(a) hereof, and in any event, after the
expiration of any applicable grace period provided in any such Facility
Document); or (ii) fail to perform or observe any term, covenant or agreement on
its part to be performed or observed (other than the obligations specifically
referred to in any of Section 11.1(a), Section 11.1(b), Section 11.1(c)(i) or
any of Sections 11.1(d) - (j) hereof) in this Agreement and (in the case of this
Section 11.1(c) (ii) only) such failure shall continue for 30 consecutive days;
(d) The Borrower or any Subsidiary of the Borrower shall: (i) fail
to pay any Debt or Debts for borrowed money (other than the payment obligations
described in (a) above), in the aggregate amount of, or relating to Debt in the
aggregate amount of, $1,000,000 or more, as the case may be, or any interest or
premium thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) after giving effect to any applicable grace
period; or (ii) fail to perform or observe any term, covenant or condition on
its part to be performed or observed, including the obligation to make payment,
under any agreement or instrument relating to any Debt or Debts (other than the
payment obligations described in (a) above and other than certain failures which
exist at the date hereof and described in Schedule 7.2) in the aggregate amount
of $500,000 or more, when required to be performed or observed, and the effect
of such failure to perform or observe is to accelerate the maturity of such
Debt, after giving effect to any applicable grace period;
(e) The Borrower or any Subsidiary of the Borrower (i) shall
generally not, or be unable to, or shall admit in writing its or their inability
to, pay its or their debts as such debts become due; or (ii) shall make an
assignment for the benefit of creditors, petition or apply to any tribunal for
the appointment of a custodian, receiver or trustee for it or a substantial part
of its assets; or (iii) shall commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction, whether now or hereafter in effect; or (iv)
shall have had any such petition or application filed or any such proceeding
shall have been commenced, against it or them, in which an adjudication or
appointment is made or order
- 71 -
for relief is entered, or which petition, application or proceeding remains
undismissed for a period of 45 days or more; or shall be the subject of any
proceeding under which its assets may be subject to seizure, forfeiture or
divestiture (other than a proceeding in respect of a Permitted Lien under
Section 9.2(b) hereof); or (v) by any act or omission shall indicate its consent
to, approval of or acquiescence in any such petition, application or proceeding
or order for relief or the appointment of a custodian, receiver or trustee for
all or any substantial part of its property; or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of 30 days or more; or the Borrower and its Subsidiaries, taken as a whole,
shall cease to be Solvent;
(f) One or more judgments, decrees or orders for the payment of
money in excess of $1,000,000 in the aggregate shall be rendered against the
Borrower and/or any Subsidiary of the Borrower and such judgments, decrees or
orders shall continue unsatisfied and in effect for a period of 45 consecutive
days without being vacated, discharged, satisfied or stayed or bonded pending
appeal;
(g) An event or condition specified in Section 8.8(h) hereof shall
occur or exist with respect to any Plan, or Multiemployer Plan and, as a result
of such event or condition, together with all other such events or conditions
and all other events or conditions relating to a Plan or Multiemployer Plan, the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate shall incur or
in the opinion of the Required Banks shall be reasonably likely to incur a
liability to a Plan, a Multiemployer Plan, the Internal Revenue Service or PBGC
(or any combination of the foregoing) in excess of $2,000,000 in the aggregate;
(h) Any Forfeiture Proceeding shall have been commenced against the
Borrower or any Subsidiary of the Borrower unless the Borrower or such
Subsidiary, as the case may be, timely contests any such proceeding in good
faith by appropriate proceedings and such proceeding is dismissed within 30 days
after the commencement thereof; provided, however, that until such proceeding is
dismissed as aforesaid, and notwithstanding anything contained in this Agreement
to the contrary, the Banks will be under no obligation to make Loans available
to, and the Issuing Bank will be under no obligation to issue Letters of Credit
for the account of, the Borrower after the commencement of any such proceeding
unless and until such time as any such proceeding shall have been dismissed
pursuant to the foregoing provisions;
(i) (i) Any of the Material Subsidiaries shall fail to perform or
observe any term, covenant or agreement contained in any Subsidiary Guarantee;
or (ii) any Subsidiary Guarantee or any provision of any Subsidiary Guarantee
shall cease to be in full force and effect for any reason;
(j) Any Facility Document or any provision of any Facility Document
shall cease to be in full force and effect for any reason or the enforceability
of any Facility Document shall be contested by the Borrower or any other Person;
- 72 -
(k) Sid Tool shall cease to be a wholly-owned direct Subsidiary of
the Borrower for any reason; or
(l) the occurrence of a Change of Control.
Section 11.2. Remedies.
If any Event of Default shall occur and be continuing, the Administrative
Agent, after it has received notice or has become aware of any such Event of
Default, shall notify the Banks of the same, and if instructed by the Required
Banks, the Administrative Agent shall, by notice to the Borrower, (i) declare
the Commitments to be terminated, whereupon the same shall forthwith terminate,
and (ii) declare the outstanding principal of the Loans, all interest thereon
and all other amounts payable under this Agreement and the Notes (including,
without limitation, amounts payable in respect of any Letter of Credit) to be
forthwith due and payable, whereupon the Loans, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the case of an Event
of Default referred to in Section 11.1(e) or Section 11.1(h) above, the
Commitments shall be immediately terminated, and the Loans, all interest thereon
and all other amounts payable under this Agreement and the Notes (including
amounts payable in respect of any Letter of Credit) shall be immediately due and
payable without notice, presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by the Borrower. With respect to
all Letters of Credit that shall not have expired or with respect to which
presentment for honor shall not have occurred, the Borrower shall deposit in a
cash collateral account opened by the Administrative Agent an amount equal to
the aggregate undrawn amount of such Letters Credit, and the unused portion
thereof, if any, shall be returned to the Borrower after the respective
expiration dates of the Letters of Credit and after all obligations of the
Borrower hereunder and under the other Facility Documents are paid in full.
Furthermore, if an Event of Default has occurred and is continuing, interest and
each Letter of Credit Commission Fee and Special Letter of Credit Commission Fee
payable hereunder in connection with Loans, Letters of Credit and Special
Letters of Credit shall automatically be increased to the Default Rate.
ARTICLE 12. THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT
AND THE ISSUING BANK;RELATIONS AMONG BANKS
Section 12.1. Appointment, Powers and Immunities of Agents; Certain Other
Matters.
Each Bank, the Syndication Agent and the Issuing Bank hereby irrevocably
(but subject to removal by the Required Banks pursuant to Section 12.9 hereof)
appoint and authorize the Administrative Agent to act as its agent hereunder and
under any other
- 73 -
Facility Document with such powers as are specifically delegated to the
Administrative Agent or any similar Person by the terms of this Agreement and
any other Facility Document, together with such other powers as are reasonably
incidental thereto. Neither the Administrative Agent, the Syndication Agent, nor
the Issuing Bank shall have any duties or responsibilities except those
expressly set forth in this Agreement and any other Facility Document, and shall
not by reason of this Agreement be a trustee for any Bank and in that regard it
is expressly agreed that although Chase, as Syndication Agent, shall be entitled
to all the benefits of the exculpatory provisions set forth in this Agreement,
Chase, as Syndication Agent, shall have no duties, responsibilities or
liabilities whatsoever, in such capacity. Neither the Administrative Agent, the
Syndication Agent, nor the Issuing Bank shall be responsible to the Banks for
any recitals, statements, representations or warranties made by the Borrower,
any Subsidiary of the Borrower or any officer or official of the Borrower, any
Subsidiary of the Borrower or any other Person contained in this Agreement or
any other Facility Document, or in any certificate or other document or
instrument referred to or provided for in, or received by any of them under,
this Agreement or any other Facility Document, or for the value, legality,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Facility Document or any other document or instrument
referred to or provided for herein or therein, or for any failure by the
Borrower or its Subsidiaries, or any of them, to perform any of their or its
respective obligations hereunder or thereunder. The Administrative Agent, the
Syndication Agent and the Issuing Bank may employ agents and attorneys-in-fact
and shall not be responsible, except as to money or securities received by it or
its authorized agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the
Administrative Agent, the Syndication Agent, nor the Issuing Bank, nor any of
their respective directors, officers, employees or agents shall be liable or
responsible for any action taken or omitted to be taken by it or them hereunder
or under any other Facility Document or in connection herewith or therewith,
except for its or their own gross negligence or willful misconduct.
Section 12.2. Reliance by Administrative Agent and Issuing Bank.
Each of the Administrative Agent, the Syndication Agent and the Issuing
Bank shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram, telecopier
or cable) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts selected
by the Administrative Agent, the Syndication Agent or the Issuing Bank, as the
case may be. Each of the Administrative Agent, the Syndication Agent and the
Issuing Bank may deem and treat each Bank as the holder of the Loans made by it
for all purposes hereof unless and until a notice of the assignment or transfer
thereof reasonably satisfactory to the Administrative Agent and the Issuing Bank
signed by such Bank shall have been furnished to the Administrative Agent and
the Issuing Bank but neither the Administrative Agent, the Syndication Agent nor
the Issuing Bank shall be
- 74 -
required to deal with any Person who has acquired a participation in any Loan
from a Bank. As to any matters not expressly provided for by this Agreement or
any other Facility Document, the Administrative Agent, the Syndication Agent and
the Issuing Bank shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by the
Required Banks, and such instructions of the Required Banks and any action
taken, or failure to act, pursuant thereto shall be binding on all of the Banks
and any other holder of all or any portion of any Loan.
Section 12.3. Defaults.
Neither the Administrative Agent nor the Issuing Bank shall be deemed to
have knowledge of the occurrence of a Default or Event of Default (other than,
in the case of the Administrative Agent, the non-payment of principal of or
interest on the Loans, any reimbursement obligations or any fees to the extent
the same is required to be paid to the Administrative Agent for the account of
the Banks and other than, in the case of the Issuing Bank, the non-payment of
any reimbursement obligation under a Letter of Credit) unless the Administrative
Agent or the Issuing Bank, as the case may be, has actual knowledge of such
Default or Event of Default or has received notice from a Bank or the Borrower
specifying such Default or Event of Default and stating that such notice is a
"Notice of Default." In the event that the Administrative Agent or the Issuing
Bank, as the case may be, has actual knowledge of a Default or an Event of
Default or receives such a notice of the occurrence of a Default or Event of
Default, the Administrative Agent or the Issuing Bank shall give prompt notice
thereof to the Banks (and shall give each Bank prompt notice of each such
non-payment). The Administrative Agent shall (subject to Sections 13.1 and 13.8
hereof) take such action with respect to such Default or Event of Default which
is continuing as shall be directed by the Required Banks; provided that, unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interest of the Banks and the Issuing Bank; and provided further that
the Administrative Agent shall not be required to take any such action which it
determines to be contrary to law.
Section 12.4. Rights of Administrative Agent, the Syndication Agent and
Issuing Bank.
With respect to its Commitment and the Loans made by it, each entity which
is the Administrative Agent, the Syndication Agent or the Issuing Bank, each in
its capacity as a Bank hereunder, shall have the same rights and powers
hereunder as any other Bank and may exercise the same as though it were not
acting as the Administrative Agent, the Syndication Agent or the Issuing Bank,
and the term "Bank" or "Banks" shall, unless the context otherwise indicates,
include each entity which is the Administrative Agent, the Syndication Agent or
the Issuing Bank in its capacity as a Bank. The Administrative Agent, the
Syndication Agent, the Issuing Bank or any Bank and their respective Affiliates
may (without having to account therefor to any other Bank) accept deposits
- 75 -
from, lend money to (on a secured or unsecured basis), and generally engage in
any kind of banking, trust or other business with, the Borrower or any
Subsidiaries of the Borrower (and any of their respective Affiliates). In the
case of each entity which is the Administrative Agent, the Syndication Agent or
the Issuing Bank, it may do so as if it were not acting in such capacity,
respectively, and each entity which is the Administrative Agent, the Syndication
Agent or the Issuing Bank may accept fees and other consideration from the
Borrower or any Subsidiaries of the Borrower for services in connection with
this Agreement or otherwise without having to account for the same to the Banks.
Although the Administrative Agent, the Syndication Agent, the Issuing Bank or a
Bank or any of their respective Affiliates may in the course of such
relationships and relationships with other Persons acquire information about the
Borrower or any Subsidiaries of the Borrower, their respective Affiliates and
such other Persons, neither the Administrative Agent, the Syndication Agent, the
Issuing Bank nor such Bank shall have any duty to disclose such information to
the other Banks except as required under this Agreement or the other Facility
Documents.
Section 12.5. Indemnification of Administrative Agent, Syndication Agent,
Issuing Bank and Arrangers.
The Banks (including each entity which is the Administrative Agent, the
Syndication Agent or the Issuing Bank, each in its capacity as a Bank) agree to
indemnify the Administrative Agent, the Syndication Agent, each Arranger and the
Issuing Bank (to the extent not reimbursed under Section 13.3 hereof or under
the applicable provisions of any other Facility Document, but without limiting
the obligations of the Borrower under Section 13.3 hereof or such provisions),
ratably in accordance with the aggregate unpaid principal amount of the Loans
made by the Banks (without giving effect to any participation, in all or any
portion of such Loans, sold by them to any other Person) (or, if no Loans are at
the time outstanding, ratably in accordance with their respective Commitments),
for any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent, the Syndication Agent, an Arranger or the Issuing Bank
relating to or arising out of this Agreement, any other Facility Document or any
other documents contemplated by or referred to herein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses which the Borrower is obligated to pay under Section 13.3 hereof or
under the applicable provisions of any other Facility Document but excluding,
unless a Default or Event of Default has occurred, normal administrative costs
and expenses incidental to the performance of its agency duties hereunder) or
the enforcement of any of the terms hereof or thereof or of any such other
documents or instruments; provided that no Bank shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
Section 12.6. Documents.
- 76 -
The Administrative Agent will forward to the Issuing Bank and each Bank,
promptly after the Administrative Agent's receipt thereof, a copy of each
report, notice or other document required by this Agreement or any other
Facility Document to be delivered to the Administrative Agent for such Bank, to
the extent not otherwise delivered to the Issuing Bank or such Bank pursuant to
this Agreement or any other Facility Document.
Section 12.7. Non-Reliance on Administrative Agent, Syndication Agent,
Arrangers, Issuing Bank and Other Banks.
Each Bank agrees that it has, independently and without reliance on the
Administrative Agent, the Syndication Agent, the Arrangers, the Issuing Bank or
any other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower, its Subsidiaries and
their respective Affiliates and decision to enter into this Agreement and that
it will, independently and without reliance upon the Administrative Agent, the
Syndication Agent, the Arrangers, the Issuing Bank or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement or any other Facility Document. Neither the Administrative
Agent, the Syndication Agent, either Arranger nor the Issuing Bank shall be
required to keep itself informed as to the performance or observance by the
Borrower or any of its Subsidiaries of this Agreement or any other Facility
Document or any other document referred to or provided for herein or therein or
to inspect the properties or books of the Borrower or any Affiliate. Except for
notices, reports and other documents and information expressly required to be
furnished to the Banks by the Administrative Agent or the Issuing Bank
hereunder, neither the Administrative Agent, the Syndication Agent, either
Arranger nor the Issuing Bank shall have any duty or responsibility to provide
any Bank with any credit or other information concerning the affairs, financial
condition or business of the Borrower or any of its Subsidiaries (or any of
their respective Affiliates) which may come into the possession of the
Administrative Agent, the Syndication Agent, either Arranger, the Issuing Bank
or any of their respective Affiliates. Neither the Administrative Agent, the
Syndication Agent, either Arranger nor the Issuing Bank shall be required to
file this Agreement, any other Facility Document or any document or instrument
referred to herein or therein for record, or give notice of this Agreement, any
other Facility Document or any document or instrument referred to herein or
therein to anyone except as specifically provided in this Agreement.
Section 12.8. Failure of Administrative Agent or the Issuing Bank to Act.
Except for action expressly required of the Administrative Agent or the
Issuing Bank hereunder, the Administrative Agent and the Issuing Bank shall in
all cases be fully justified in failing or refusing to act hereunder unless it
shall have received further assurances (which may include cash collateral) of
the indemnification obligations of the Banks under Section 12.5 hereof in
respect of any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.
- 77 -
Section 12.9. Resignation or Removal of Administrative Agent or
Syndication Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent or Syndication Agent, as the case may be, as provided below, the
Administrative Agent and the Syndication Agent may each resign at any time by
giving written notice thereof to the Issuing Bank, the other agent, the Banks
and the Borrower, and the Administrative Agent and the Syndication Agent may
each be removed at any time with or without cause by the Required Banks;
provided that the Borrower, the Issuing Bank, the other agent and the other
Banks shall be promptly notified thereof. Upon any such resignation or removal,
the Required Banks shall have the right to appoint a successor Administrative
Agent and/or Syndication Agent, as the case may be. If no successor
Administrative Agent or Syndication Agent, as the case may be, shall have been
so appointed by the Required Banks and shall have accepted such appointment
within 30 days after the retiring Administrative Agent's or Syndication Agent's
giving of notice of resignation or the Required Banks' removal of the retiring
Administrative Agent or Syndication Agent, as the case may be, then the retiring
Administrative Agent or Syndication Agent may, on behalf of the Banks, appoint a
successor Administrative Agent or Syndication Agent, as the case may be, which
shall be a commercial bank which has an office in New York, New York having a
minimum capital and surplus of $500,000,000. The Required Banks or the retiring
Administrative Agent, or the retiring Syndication Agent, as the case may be,
shall upon the appointment of a successor Administrative Agent or Syndication
Agent, as the case may be, promptly so notify the Borrower, the Issuing Bank,
the other agent and the other Banks. Upon the acceptance of any appointment as
Administrative Agent or Syndication Agent hereunder by a successor
Administrative Agent or Syndication Agent, as the case may be, such successor
Administrative Agent or Syndication Agent, as the case may be, shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent or Syndication Agent, as the case may be,
and the retiring Administrative Agent or Syndication Agent, as the case may be,
shall be discharged from and after the date of such succession from its duties
and obligations hereunder. After any retiring Administrative Agent's or
Syndication Agent's resignation or removal hereunder as Administrative Agent or
Syndication Agent, as the case may be, the provisions of this Article 12 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent or the
Syndication Agent, as the case may be. The retiring Administrative Agent or
Syndication Agent shall pay to the successor Administrative Agent or Syndication
Agent, as the case may be, its pro-rated portion of any agency fee that had been
paid for such year.
Section 12.10. Amendments Concerning Agency, Arrangement and Issuing Bank
Function.
Neither the Administrative Agent, the Syndication Agent nor the Issuing
Bank shall be bound by any waiver, amendment, supplement or modification of this
Agreement
- 78 -
or any other Facility Document which affects its respective rights or
obligations hereunder or thereunder unless it shall have given its prior consent
thereto.
Section 12.11. Liability of Agents, Issuing Bank and Banks.
Neither the Administrative Agent, the Syndication Agent, the Issuing Bank
nor any Bank shall have any liabilities or responsibilities to the Borrower, any
Subsidiary of the Borrower or any other Person on account of the failure of any
other Bank to perform its obligations hereunder or to any other Bank on account
of the failure of the Borrower or any of the Borrower's Subsidiaries to perform
their obligations hereunder or under any other Facility Document.
Section 12.12. Transfer of Agency Function.
Without the consent of the Borrower, any Subsidiary of the Borrower, the
Issuing Bank, or any Bank, the Administrative Agent and the Syndication Agent
may each at any time or from time to time transfer its functions hereunder as
Administrative Agent or Syndication Agent, as the case may be, to any of its
United States offices wherever located, provided that it shall promptly notify
the Borrower and the Banks thereof.
Section 12.13. Non-Receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by (i) a Bank or
(ii) the Borrower (the "Payor") prior to the date on which such Bank is to make
payment hereunder to the Administrative Agent of the proceeds of a Loan or the
Borrower is to make any payment hereunder to the Administrative Agent, as the
case may be (either such payment being a "Required Payment"), which notice shall
be effective upon receipt, that the Payor does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Administrative Agent, the recipient of such payment
(and, if such recipient is the Borrower and the Payor Bank fails to pay the
amount thereof to the Administrative Agent forthwith upon demand, the Borrower)
shall, on demand, repay to the Administrative Agent the amount made available to
it together with interest thereon for the period from the date such amount was
so made available by the Administrative Agent until the date the Administrative
Agent recovers such amount at a rate per annum equal to the average daily
Federal Funds Rate for such period.
Section 12.14. Withholding Taxes.
Each Bank represents that it is entitled to receive any payments to be
made to it hereunder without the withholding of any tax and will furnish to the
Administrative Agent such forms, certifications, statements and other documents
as the Administrative Agent may request from time to time to evidence such
Bank's exemption from the
- 79 -
withholding of any tax imposed by any jurisdiction or to enable the
Administrative Agent to comply with any applicable laws or regulations relating
thereto. Without limiting the effect of the foregoing, if any Bank is not
created or organized under the laws of the United States of America or any state
thereof, in the event that the payment of interest by the Borrower is treated
for U.S. income tax purposes as derived in whole or in part from sources from
within the U.S., such Bank will furnish to the Administrative Agent Form 4224 or
Form 1001 of the Internal Revenue Service, or such other forms, certifications,
statements or documents, duly executed and completed by such Bank as evidence of
such Bank's exemption from the withholding of U.S. tax with respect thereto. The
Administrative Agent shall not be obligated to make any payments hereunder to
such Bank in respect of any Loan or such Bank's Commitment until such Bank shall
have furnished to the Administrative Agent the requested form, certification,
statement or document.
Section 12.15. Several Obligations and Rights of Banks.
The failure of any Bank to make any Loan to be made by it on the date
specified therefor or to perform any of its other obligations hereunder
(including, without limitation, its obligations to participate in any
reimbursement obligations under a Letter of Credit) shall not relieve any other
Bank of its obligation to make its Loan on such date or to perform its other
obligations hereunder (including, without limitation, its obligation to
participate in any reimbursement obligations under a Letter of Credit), but no
Bank shall be responsible for the failure of any other Bank to make a Loan to be
made by such other Bank or to perform any of such other obligations. If any Bank
shall default in its obligations hereunder or under the other Facility
Documents, (i) such Bank shall not be entitled to (x) receive any payments to
which it would otherwise be entitled hereunder, or (y) give any consent,
instruction, approval or waiver hereunder (including, without limitation,
pursuant to Section 11.2 and Section 13.1 hereof) or under any other Facility
Document, and the Revolving Credit Commitment Proportion, the Term Loan
Commitment Proportion and the Commitment Proportion of such Bank shall not be
given any effect with respect to any such consent, instruction, approval or
waiver and (ii) the Borrower and the non-defaulting Banks will endeavor in good
faith to arrange for another lender or lenders to replace the defaulting Bank,
which replacement lender or lenders must agree to participate in the Commitments
to the extent of the defaulting Bank's obligations hereunder on the same terms
and conditions applicable to such defaulting Bank at the time of such default
and to purchase all of such defaulting Bank's Loans hereunder; provided,
however, that none of such non-defaulting Banks will be deemed to have incurred
or assumed any liabilities or obligations pursuant to this sentence if any
replacement lender does not elect to participate as referenced above for any
reason whatsoever. The amounts payable at any time hereunder to each Bank shall
be a separate and independent debt and upon the written consent of the Required
Banks, the Banks shall be entitled to protect and enforce their rights arising
out of this Agreement, absent a waiver of any such rights in accordance with
Section 13.1 hereof, in any proceeding in which all Banks are joined for any
such purpose; provided, however, that the
- 80 -
Administrative Agent shall be entitled to protect and enforce the rights of the
Banks arising out of this Agreement, in accordance with this Agreement, and it
shall not be necessary for any other Bank to be joined as an additional party in
any proceeding for such purpose (though nothing shall preclude such joinder).
Section 12.16. Pro Rata/Non Pro Rata Treatment of Loans.
(a) Subject to the provisions of Article 4 and Article 5 hereof,
each payment or prepayment of principal of or interest on any Borrowing
consisting of Revolving Credit Loans and/or Term Loans, each payment of the
Unused Fee, each reimbursement obligation under a Letter of Credit and each
refinancing or conversion of any Borrowing with a Borrowing consisting of
Revolving Credit Loans and/or Term Loans of any type, shall be allocated pro
rata among Banks in accordance with the respective principal amounts of their
outstanding Term Loans or Revolving Credit Loans, as the case may be. Subject to
the provisions of Article 4 and Article 5 hereof, each reduction of the
Commitments shall be allocated pro rata among Banks in accordance with their
respective Commitments. Each payment of principal of any Borrowing consisting of
Bid Loans shall be allocated pro rata among the Banks participating in such
Borrowing in accordance with the respective principal amounts of their
outstanding Bid Loans comprising such Borrowing. Each payment of interest on any
Borrowing consisting of Bid Loans shall be allocated pro rata among the Banks
participating in such Borrowing in accordance with the respective amounts of
accrued and unpaid interest on their outstanding Bid Loans comprising such
Borrowing. For purposes of determining the available Commitments of the Banks at
any time, each outstanding Borrowing consisting of Bid Loans shall be deemed to
have utilized the Commitments of the Banks (including those Banks which shall
not have made Loans as part of such Borrowing consisting of Bid Loans) pro rata
in accordance with such respective Commitments. Each Bank agrees that in
computing such Bank's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Bank's percentage of
such Borrowing to the next higher or lower whole dollar amount.
(b) Each reduction or termination of the amount of the Revolving
Credit Commitments under Section 2.7 hereof shall be applied to the Revolving
Credit Commitments of the Banks pro rata in accordance with their respective
Revolving Credit Commitment Proportions.
Section 12.17. Sharing of Payments Among Banks.
If a Bank shall obtain payment of any principal of or interest on the Term
Loan or any Revolving Credit Loan made or extended by it through the exercise of
any right of setoff, banker's lien, counterclaim, or any other means, it shall
promptly purchase from the other Banks participations in (or, if and to the
extent specified by such Bank, direct interests in) the Term Loans or Revolving
Credit Loans, as the case may be, made by the other Banks in such amounts, and
make such other adjustments from time to time as shall be equitable to the end
that all the Banks shall share the benefit of such payment (net of
- 81 -
any expenses which may be incurred by such Bank in obtaining or preserving such
benefit) pro rata in accordance with the unpaid principal and interest on the
Term Loans and Revolving Credit Loans, as the case may be, held by each of them.
To such end the Banks shall make appropriate adjustments among themselves (by
the sale of participations or otherwise) if such payment is rescinded or must
otherwise be restored. The Borrower agrees that any Bank so purchasing a
participation (or direct interest) in the Term Loans and/or Revolving Credit
Loans, as the case may be, made by other Banks may exercise all rights of
setoff, banker's lien, counterclaim or similar rights with respect to such
participation (or direct interest). Nothing contained herein shall require any
Bank to exercise any such right or shall affect the right of any Bank to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness of the Borrower. In the event that a Bank has Term Loans,
Bid Loans and Revolving Credit Loans outstanding, such Bank shall deem and treat
all payments obtained by it as payments of principal of or interest on such
Revolving Credit Loans, first and the excess of such payments, if any, as
payments of principal of or interest on the Bid Loans and then the excess of
such payments, if any, as payments of principal of or interest on the Term
Loans.
ARTICLE 13. MISCELLANEOUS
Section 13.1. Amendments and Waivers.
Except as otherwise expressly provided in this Agreement, any provision of
this Agreement may be amended or modified only by an instrument in writing
signed by the Borrower and the Required Banks (and, if the rights, obligations
or duties of the Administrative Agent, the Syndication Agent or the Issuing Bank
are affected thereby, by the Administrative Agent, the Syndication Agent or the
Issuing Bank, as the case may be), and any provision of this Agreement may be
waived by the Borrower (if such provision requires performance by the
Administrative Agent, the Syndication Agent, the Issuing Bank or the Banks, or
any of them) or by an instrument signed by the Required Banks (if such provision
requires performance by the Borrower), including, but not limited to, any Event
of Default; provided that no amendment, modification or waiver shall, unless by
an instrument signed by all of the Banks: (a) increase or extend the term, or
extend the time or waive any requirement for the reduction or termination, of
the Revolving Credit Commitments or the Term Loan Commitments, (b) extend the
date fixed for the payment of principal of or interest on any Loan or any fee
payable hereunder or any reimbursement obligation payable hereunder, (c) reduce
the amount of any payment of principal thereof or the rate at which interest is
payable thereon or any fee payable hereunder, (d) alter the terms of this
Section 13.1 or of Section 13.6 hereof, (e) amend the definition of the term
"Required Banks" or the number of Banks or percentage of Loans or Commitments
required for the Banks to take any action under any of the Facility Documents,
(f) change the Revolving Credit Commitment, the Term Loan Commitment or the
Commitment of any Bank or the fees payable to any Bank except as otherwise
provided herein, (g) permit the Borrower to transfer or assign any of its
- 82 -
obligations hereunder or under the Facility Documents, (h) amend the provisions
of Article 12 hereof, (i) amend the provisions of Section 4.7(f) hereof or any
guarantee delivered pursuant to the terms hereof or the provisions of any
agreement relating to any Subordinated Debt, or (j) release any guarantee
delivered pursuant to the terms hereof. No failure on the part of the
Administrative Agent, the Syndication Agent, the Issuing Bank or any Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof or preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 13.2. Usury.
Anything herein to the contrary notwithstanding, the obligations of the
Borrower under this Agreement and the Notes shall be subject to the limitation
that payments of interest shall not be required to the extent that receipt
thereof would be contrary to provisions of law applicable to a Bank limiting
rates of interest which may be charged or collected by such Bank.
Section 13.3. Expenses.
The Borrower shall reimburse the Administrative Agent, the Syndication
Agent and the Issuing Bank on demand for all reasonable costs, expenses, and
charges including, without limitation, reasonable fees and charges of external
legal counsel for the Administrative Agent, the Syndication Agent and the
Issuing Bank) incurred by the Administrative Agent, the Syndication Agent or the
Issuing Bank or by the Administrative Agent on behalf of the Banks in connection
with the preparation, execution and delivery of this Agreement and the other
Facility Documents. In addition, the Borrower shall reimburse the Administrative
Agent, the Syndication Agent, the Issuing Bank and each Bank for all of its
reasonable costs and expenses (including, without limitation, reasonable fees
and charges of external legal counsel for each such Person) in connection with
the enforcement or preservation of any rights under this Agreement, the Notes or
the other Facility Documents. The Borrower agrees to indemnify the
Administrative Agent, the Syndication Agent, the Issuing Bank and each Bank and
their respective directors, officers, employees and agents from, and hold each
of them harmless against, any and all losses, liabilities, claims, damages or
expenses incurred by any of them arising out of or by reason of any
investigation or litigation or other proceedings (including any threatened
investigation or litigation or other proceedings) relating to any actual or
proposed use by the Borrower or any of its Affiliates of the Letters of Credit
or the proceeds of the Loans, or to the failure of the Borrower or any of its
Subsidiaries to perform or observe any of the terms, covenants or conditions on
its part to be performed or observed under this Agreement or any of the other
Facility Documents including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or
- 83 -
expenses incurred by reason of the gross negligence, willful misconduct or bad
faith of the Person to be indemnified).
Section 13.4. Survival.
The obligations of the Borrower under Section 4.8, Section 4.6, Article 5,
Section 8.15 (notwithstanding anything to the contrary herein) and Section 13.3
hereof shall survive the repayment of the Loans and the termination of the
Commitments for a period corresponding to the maximum applicable statute of
limitations in effect in the State of New York from time to time.
Section 13.5. Assignment; Participation.
This Agreement shall be binding upon, and shall inure to the benefit of,
the Borrower, the Administrative Agent, the Issuing Bank, the Banks and their
respective successors and assigns, except that the Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of each Bank. Each Bank may, (x) with the prior written consent of the
Administrative Agent, the Syndication Agent and the Borrower (which consents
shall not be unreasonably withheld) and the Issuing Bank (which consent may be
given or withheld in the sole and absolute discretion of the Issuing Bank)
(except that (i) with respect to assignments made by a Bank to an Affiliate
thereof, no such consent of any of the Administrative Agent, the Syndication
Agent or the Issuing Bank shall be required and (ii) at any time when a Default
or an Event of Default shall exist, no consent of the Borrower shall be
required) to assign or (y) sell participations in, all or any part of its Loans
and its Commitment to another bank or other entity, in which event (a) in the
case of an assignment, upon notice thereof by the Bank to the Borrower with a
copy of the assignment agreement to the Administrative Agent, the assignee shall
have, to the extent of such assignment (unless otherwise provided in the
applicable assignment agreement), the same rights, benefits and obligations as
it would have if it were a Bank hereunder; and (b) in the case of a
participation, the participant shall have no rights under the Facility
Documents, and all amounts payable by the Borrower under Article 5 hereof shall
be determined as if such Bank had not sold such participation. Such Bank may
furnish any information concerning the Borrower and its Subsidiaries in the
possession of such Bank from time to time to assignees and participants
(including prospective assignees and participants); provided that such Bank
shall require any such prospective assignee or such participant (prospective or
otherwise) to agree in writing to maintain the confidentiality of such
information on substantially the terms set forth in Section 13.15 hereof. The
right of a Bank to assign or participate all or part of its Commitment to a
third party shall be subject to the following limitations: (i) each assignment
or participation shall be made pro rata between the Revolving Credit Commitment,
Term Loan Commitment, Commitment and the Bid Loans, (ii) each assignee shall be
a commercial bank having minimum capital and surplus of $500,000,000, (iii) each
Bank (other than the Administrative Agent and the Syndication Agent, each in its
capacity as a Bank) shall be permitted to make only one assignment and the
Administrative Agent and the Syndication Agent, each in its capacity as a Bank,
- 84 -
shall be permitted to make two assignments during the term of this Agreement
provided that the Administrative Agent or Syndication Agent, as the case may be,
by reason of any assignment shall not cease to be the Administrative Agent or
Syndication Agent, as the case may be, or a Bank hereunder, and (iv) the holder
of any participation shall not be entitled to any voting rights under this
Agreement. There shall be no limit on the number of participations that may be
granted by any Bank. Any permitted assignees or participants shall be bound by,
and shall be subject to, the provisions of Section 13.1 hereof. Notwithstanding
the foregoing, each Bank shall be permitted to assign all or part of Revolving
Credit Loans, Term Loans and/or Bid Loans hereunder to any Federal Reserve Bank
in connection with any collateral assignment thereto in the ordinary course of
any such Bank's business.
Section 13.6. Special Provisions with Respect to Equity Investments and
Acquisitions.
(a) By the Borrower and/or Acquisition Subsidiaries. Subject to the
limitations set forth in Section 13.6(b) below, the Borrower and/or its
Acquisition Subsidiaries may make Equity Investments and Acquisitions and the
Borrower may make loans to Acquisition Subsidiaries to permit them to make
Equity Investments and Acquisitions, provided that no such Equity Investment or
Acquisition shall be permitted, nor may any loan to an Acquisition Subsidiary be
made, unless each such Acquisition Subsidiary that is, or as a result of such
transaction would be, a Material Subsidiary, and, with respect to Acquisitions,
each Material Subsidiary whose Capital Stock interests were acquired by the
Borrower or such Acquisition Subsidiary, and each such Person's Subsidiaries
that would be a Material Subsidiary, shall have guaranteed the obligations of
the Borrower to the Banks under the Facility Documents, in form and substance
(with respect to such guarantee) reasonably satisfactory to the Administrative
Agent and the Required Banks.
(b) Limitations. No Acquisition or Equity Investment shall be
permitted at any time pursuant to clause (a) and no loan may be made to an
Acquisition Subsidiary for the purpose of making an Acquisition or an Equity
Investment pursuant to clause (a) unless (i) the Total Cost is equal to or less
than twenty-five percent (25%) of the Effective Net Worth of the Borrower as
reflected in the Borrower's most recent financial statements available at such
time and provided to the Banks pursuant to Section 8.8(a) or Section 8.8(b)
hereof, (ii) no Default or Event of Default shall have occurred and be
continuing or would result from such Acquisition, Equity Investment, or loan, as
the case may be, (iii) the Capital Stock or the assets being acquired, as the
case may be, is in or from, as the case may be, a Person that is engaged in a
Permissible Business, (iv) with respect to each Equity Investment, no part of a
Loan was made for the purpose of "purchasing" or "carrying" such Equity
Investment, within the respective meanings of each of the quoted terms under
Regulation U of the Federal Reserve Board as now and from time to time hereafter
in effect and (v) with respect to each Acquisition (A) such Acquisition shall
not be hostile and (B) such Acquisition shall have been duly authorized by the
acquired entity or the entity selling such assets, as the case may be. In the
event
- 85 -
that any Acquisition is consummated, the Borrower shall be required to provide
consolidated and consolidating financial statements reasonably acceptable to the
Banks. Under no circumstances shall the Borrower or any Acquisition Subsidiary
of the Borrower be permitted to make any Acquisition pursuant to this Section
13.6 if such Acquisition includes an acquisition of real property unless, to the
best knowledge of the Borrower and/or such Acquisition Subsidiary, after
reasonable investigation, such real property has not been used for conducting
any manufacturing, industrial, commercial or retail business which involved in
any way the introduction, manufacture, generation, processing or storage of any
Hazardous Substance which is the subject of any Environmental Law.
Section 13.7. Notices.
Unless the party to be notified otherwise notifies the other party in
writing as provided in this Section, and except as otherwise provided in this
Agreement, notices shall be given to the Administrative Agent or the Issuing
Bank by telephonic communication directly with Xxxxxxxxxxx X. Xxxxxxxxxx or any
other person designated for such purpose by notice from the Administrative Agent
or the Issuing Bank to the Borrower, confirmed by telecopy or other writing
(with a copy of any such notice to be sent simultaneously by telecopy to Xxxxxxx
X. Xxxxxxx, Esq. at (000) 000-0000, and to the Banks and to the Borrower by
certified or registered mail or by recognized overnight delivery services to
such party at its address on the signature page of this Agreement; provided,
however, that notwithstanding the foregoing to the contrary, notices to the
Borrower shall be effective if delivered at the following address: 00 Xxxxxx
Xxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention: President. Notices shall be
effective: (a) if given by registered or certified mail, 72 hours after deposit
in the mails with postage prepaid, addressed as aforesaid; or (b) if given by
recognized overnight delivery service, on the Banking Day following deposit with
such service addressed as aforesaid; or (c) if given by telecopy, when the
telecopy is transmitted to the telecopy number as aforesaid and confirmed with a
confirmation receipt (with a copy of any such notice to the Borrower to be sent
simultaneously to Xxxxxx X. Xxxxxxx, Esq., at Rosenman & Colin, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopy No. (000) 000-0000; provided,
however, that notwithstanding the foregoing to the contrary, all notices from
the Borrower to the Administrative Agent, the Syndication Agent, the Issuing
Bank, the Banks, or any of them, shall only be effective upon receipt by all of
the Administrative Agent, the Syndication Agent, the Issuing Bank and the Banks
pursuant to the other provisions of this Section 13.7, except that notice to any
Bank other than a Bank which is a signatory hereto shall be effective upon
receipt by the Administrative Agent of notice pursuant to the other provisions
of this Section 13.7; and further provided, however, that notwithstanding the
foregoing to the contrary, notices to the Borrower pursuant to Section 11.1(a)
hereof shall be effective upon delivery, by hand, of any such notice to the
Borrower at the following address: 00 Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000,
Attention: Xxxxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxxx and Xxxxxxx Xxxxx. In addition,
any such notices shall also be given simultaneously by telephonic communication
directly
- 86 -
with either Xxxxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxxx or Xxxxxxx Xxxxx at (516)
812-2000, provided, however, that delivery of any notice to the Borrower
pursuant to Section 11.1(a) hereof shall be effective upon hand-delivery of any
such notice as aforesaid, whether or not such telephonic communication is
completed with any of the foregoing individuals. Furthermore, a copy of any such
notice shall also be sent simultaneously by telecopy to Xxxxxx X. Xxxxxxx, Esq.
at (000) 000-0000, provided, however, that delivery of any notice to the
Borrower pursuant to Section 11.1(a) hereof shall be effective upon
hand-delivery of any such notice as aforesaid.
Section 13.8. Setoff.
The Borrower agrees that, in addition to (and without limitation of) any
right of setoff, banker's lien or counterclaim a Bank or the Issuing Bank may
otherwise have, each Bank and the Issuing Bank shall be entitled, at its option
without any prior notice to the Borrower (any such notice being expressly waived
by the Borrower to the extent permitted by applicable law), to offset balances
(general or special, time or demand, provisional or final) held by it for the
account of the Borrower at any of such Bank's or the Issuing Bank's, as the case
may be, offices, in Dollars or in any other currency, against any amount payable
by the Borrower to such Bank or the Issuing Bank, as the case may be, under this
Agreement or such Bank's Notes which is not paid when due (regardless of whether
such balances are then due the Borrower) in which case it shall promptly notify
the Borrower and the Administrative Agent thereof; provided that such Bank's or
the Issuing Bank's, as the case may be, failure to give such notice shall not
affect the validity thereof. Payments by the Borrower hereunder shall be made
without setoff or counterclaim.
Section 13.9. JURISDICTION; WAIVER OF JURY TRIAL; IMMUNITIES.
(a) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK COUNTY
OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTES OR THE OTHER FACILITY DOCUMENTS, AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE BORROWER IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING (BY CERTIFIED OR REGISTERED MAIL) OF COPIES OF SUCH PROCESS TO
THE BORROWER AT THE ADDRESS SPECIFIED IN SECTION 13.7 HEREOF. THE BORROWER
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER FURTHER WAIVES ANY OBJECTION
TO VENUE IN SUCH STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH
STATE ON
- 87 -
THE BASIS OF FORUM NON CONVENIENS. THE BORROWER FURTHER AGREES THAT ANY ACTION
OR PROCEEDING BROUGHT AGAINST THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT OR
THE ISSUING BANK SHALL BE BROUGHT ONLY IN A NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN NEW YORK COUNTY.
(b) THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE ISSUING
BANK, EACH OF THE BANKS AND THE BORROWER WAIVE ANY RIGHT THEY MAY HAVE TO JURY
TRIAL WITH RESPECT TO THIS AGREEMENT AND THE OTHER FACILITY DOCUMENTS.
(c) NOTHING IN THIS SECTION 13.9 SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE ISSUING BANK OR ANY BANK TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF
THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE ISSUING BANK OR ANY BANK TO
BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTIONS.
(d) TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE NOTES.
Section 13.10. Table of Contents; Headings.
Any table of contents and the headings and captions hereunder are for
convenience only and shall not affect the interpretation or construction of this
Agreement.
Section 13.11. Severability.
The provisions of this Agreement are intended to be severable. If for any
reason any provision of this Agreement shall be held invalid or unenforceable in
whole or in part in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
Section 13.12. Counterparts.
- 88 -
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and any party
hereto may execute this Agreement by signing any such counterpart.
Section 13.13. Integration.
The Facility Documents set forth the entire agreement among the parties
hereto relating to the transactions contemplated thereby and supersede any prior
oral or written statements or agreements with respect to such transactions.
Section 13.14. Governing Law.
This Agreement shall be governed by, and interpreted and construed in
accordance with, the law of the State of New York.
Section 13.15. Treatment of Certain Information.
The Borrower (a) acknowledges that services may be offered or provided to
it (in connection with this Agreement or otherwise) by each Bank or the Issuing
Bank or by one or more of their respective Subsidiaries or Affiliates and (b)
acknowledges that information delivered to each Bank or the Issuing Bank by such
entity may be provided to each such Affiliate. Notwithstanding the foregoing,
the Banks and the Issuing Bank agree to maintain and to endeavor to cause their
respective Subsidiaries and Affiliates to maintain all non-public information
which is furnished to them hereunder or under or in connection with any Facility
Document in confidence and not to disclose any such information to third parties
(except as provided in the preceding sentence); provided, however that neither
any Bank nor the Issuing Bank will be liable to the Borrower or to any of its
Subsidiaries or Affiliates for the failure to cause such Bank's or the Issuing
Bank's, as the case may be, Subsidiaries and Affiliates to maintain in
confidence and not disclose any such information, in the absence of gross
negligence or willful misconduct on the part of any such Bank or the Issuing
Bank, as the case may be; and further provided, however, that the Banks, the
Issuing Bank and their Affiliates referred to above may disclose such
information (i) to their legal counsel, auditors, appraisers or consultants in
connection with the transactions contemplated hereby (provided that such persons
are advised of the confidential nature of such information and of the Banks' and
the Issuing Bank's confidentiality obligations hereunder), (ii) to any
regulatory authority having jurisdiction over them, (iii) to prospective
participants or assignees of the Commitments (provided that such prospective
participants or assigns execute a confidentiality agreement on substantially the
terms hereof), (iv) as required by law or legal process, (v) in response to
credit inquiries, (vi) in connection with any litigation to which any of them
may be a party, (vii) which has become public without a breach by the disclosing
party, or (viii) which is received from a Person not known to be under a duty of
confidentiality, provided that with respect to Section 13.15 (v) only, the
Borrower has consented in writing to such disclosure.
- 89 -
Section 13.16. Further Rights of the Administrative Agent.
(a) The Borrower appoints such person or persons as the
Administrative Agent may designate as its attorney-in-fact, upon and during the
continuance of an Event of Default, to do all things necessary to carry out this
Agreement and the other Facility Documents. The powers granted herein, being
coupled with an interest, are irrevocable, and the Borrower approves and
ratifies all acts of the attorney-in-fact. Neither the Administrative Agent nor
the attorney-in-fact shall be liable for any act or omission, error in judgment
or mistake of law so long as the same is not willful misconduct or grossly
negligent.
(b) In the event that the Borrower or any of its Subsidiaries shall
fail to purchase or maintain insurance (where applicable), or to pay any tax,
assessment, government charge or levy, except as the same may be otherwise
permitted hereunder, or in the event that any Lien prohibited hereby shall not
be paid in full or discharged, or in the event that the Borrower or any of its
Subsidiaries shall fail to perform or comply with any other covenant, promise or
obligation to the Banks hereunder or under any other Facility Document, the
Administrative Agent may, but shall not be required to, perform, pay, satisfy,
discharge or bond the same for the account of the Borrower and all monies so
paid by the Administrative Agent, including reasonable attorneys' fees, shall be
treated as an advance to the Borrower.
Section 13.17. Lost Notes.
Upon receipt of an affidavit of an officer of any Bank as to the
loss, theft, destruction or mutilation of any Note or any other Facility
Document which is not of public record, and, in the case of any such loss,
theft, destruction or mutilation, upon surrender and cancellation of such Note
or other Facility Document, the Borrower will issue, in lieu thereof, a
replacement Note or other Facility Document, which in the case of a replacement
Note it shall be in the same principal amount and otherwise of like tenor as the
original thereof.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES FOLLOW]
- 90 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BORROWER:
MSC INDUSTRIAL DIRECT CO., INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Chief
Executive Officer
Address for Notices:
MSC Industrial Direct Co., Inc.
c/o Sid Tool Co., Inc.
00 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
- 91 -
ADMINISTRATIVE AGENT and ISSUING BANK:
FLEET BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxxxxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxxxxxxxx Xxxxxxxxxx
Title: Vice President
Lending Office and Address for Notices:
Fleet Bank, National Association
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxxxxxx
Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
- 92 -
SYNDICATION AGENT:
THE CHASE MANHATTAN BANK
By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Address for Notices:
The Chase Manhattan Bank
Corporate Banking Group
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
- 93 -
BANKS:
FLEET BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxxxxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxxxxxxxx Xxxxxxxxxx
Title: Vice President
Lending Office and Address for Notices:
Fleet Bank, National Association
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxxxxxx
Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Revolving Credit Commitment:
$34,375,000
Term Loan Commitment:
$15,625,000
Total Commitment:
$50,000,000
- 94 -
THE CHASE MANHATTAN BANK
By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
Lending Office and Address for Notices:
The Chase Manhattan Bank
Corporate Banking Group
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Revolving Credit Commitment:
$30,937,500
Term Loan Commitment:
$14,062,500
Total Commitment:
$45,000,000
- 95 -
MELLON FINANCIAL SERVICES CORP.
as attorney-in-fact for Mellon Bank, N.A.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
Lending Office and Address for Notices:
Mellon Bank
c/o Mellon Financial Services Corp.
000 XXX Xxxxx
00xx Xxxxx, Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Revolving Credit Commitment:
$24,062,500
Term Loan Commitment:
$10,937,500
Total Commitment:
$35,000,000
- 96 -
THE BANK OF NEW YORK
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Lending Office and Address for Notices:
The Bank of New York
0000 Xxxxxxxx Xxx.
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Revolving Credit Commitment:
$13,750,000
Term Loan Commitment:
$6,250,000
Total Commitment:
$20,000,000
- 00 -
XXXXXX XXXXXXXX XXXX XX XXX XXXX
By: /s/ Xxx Xxxxxxxxxxx By: /s/ Xxxxx Xxxxxxxx
----------------------------- -----------------------------------------
Name: Xxx Xxxxxxxxxxx Name: Xxxxx Xxxxxxxx
Title: First Vice President Title: Vice President
Lending Office and Address for Notices:
Israel Discount Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Revolving Credit Commitment:
$6,875,000
Term Loan Commitment:
$3,125,000
` Total Commitment:
$10,000,000
- 98 -
