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EXHIBIT 4.1
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CREDIT AGREEMENT
dated as of January 14, 1998
among
PARK-OHIO INDUSTRIES, INC.,
as Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as Banks,
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent
and
THE HUNTINGTON NATIONAL BANK,
as Co-Agent
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This Credit Agreement (as it may from time to time be amended, restated
or otherwise modified, this "Agreement") is made effective as of the 14th day of
January, 1998, among PARK-OHIO INDUSTRIES, INC., an Ohio corporation, 00000
Xxxxxx Xxxxxx, Xxxxxx, Xxxx 00000 ("Borrower"), the banking institutions named
in SCHEDULE 1 attached hereto and made a part hereof (collectively, "Banks", and
individually, "Bank"), KEYBANK NATIONAL ASSOCIATION, 000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxx 00000-0000, as administrative agent for the Banks under this
Agreement ("Administrative Agent"), and THE HUNTINGTON NATIONAL BANK, 000 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000, as co-agent for the Banks under this Agreement
("Co-Agent", and, together with Administrative Agent, "Agents").
WITNESSETH:
WHEREAS, Borrower and the Banks desire to contract for the
establishment of credits in the aggregate principal amounts hereinafter set
forth, to be made available to Borrower upon the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"Acquisition" shall mean any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of any Person, or any
business or division of any Person, (b) the acquisition in excess of fifty
percent (50%) of the stock (or other equity interest) of any Person, or (c) the
acquisition of another Person (other than a Company) by a merger or
consolidation or any other combination with such Person.
"Adjusted Prime Rate" shall mean the greater of (a) the Prime Rate or
(b) one and one-half percent (1-1/2%) in excess of the Federal Funds Effective
Rate. Any change in the Adjusted Prime Rate shall be effective immediately from
and after such change in the Adjusted Prime Rate.
"Advantage" shall mean any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other indebtedness or otherwise)
received by any Bank in respect of the Debt, if such payment results in that
Bank having less than its pro rata share of the Debt then outstanding, than was
the case immediately before such payment.
"Business Day" shall mean a day of the year on which banks are not
required or authorized to close in Cleveland, Ohio, and, if the applicable
Business Day relates to any LIBOR Loan, on which dealings are carried on in the
London interbank eurodollar market.
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"Change in Control" shall mean (a) the acquisition by any Person or
group (other than Xxxxxx X. Xxxxxxxx and his immediate family) of beneficial
ownership (within the meaning of Rule 13d-3 of the SEC under the Securities
Exchange Act of 1934, as then in effect) of thirty-three percent (33%) or more
of the outstanding shares of voting stock of (i) Borrower (except that Parent
may acquire one hundred percent (100%) of the voting stock of Borrower) or (ii)
Parent, if Parent shall have been created, or (b) a "Change of Control", as
defined in the Indenture, shall have occurred.
"Closing Date" shall mean the effective date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
together with the rules and regulations promulgated thereunder.
"Commitment" shall mean the obligation hereunder of the Banks to make
Loans pursuant to the Revolving Credit Commitment, up to the Total Commitment
Amount (or such lesser amount as shall be determined pursuant to Section 2.5
hereof).
"Commitment Percentage" shall mean, for each Bank, the percentage set
forth opposite such Bank's name under the column headed "Commitment Percentage"
as described in SCHEDULE 1 hereof.
"Commitment Period" shall mean the period from the Closing Date to
April 30, 2001, or such earlier date on which the Commitment shall have been
terminated pursuant to Article VII hereof.
"Company" shall mean Borrower, Parent or a Subsidiary of Borrower.
"Companies" shall mean Borrower, Parent and all Subsidiaries of
Borrower.
"Compliance Certificate" shall mean a certificate in the form of
EXHIBIT B hereto.
"Consideration" shall mean, in connection with an Acquisition, the
aggregate consideration paid, including borrowed funds, cash, the issuance of
securities or notes, the assumption or incurring of liabilities (direct or
contingent), the payment of consulting fees or fees for a covenant not to
compete and any other consideration paid for the purchase.
"Consolidated" shall mean the resultant consolidation of the financial
statements of Borrower and its Subsidiaries in accordance with GAAP, including
principles of consolidation consistent with those applied in preparation of the
consolidated financial statements referred to in Section 6.13 hereof.
"Consolidated EBIT" shall mean, for any period, on a Consolidated basis
and in accordance with GAAP, Consolidated Net Earnings for such period plus the
aggregate amounts deducted in determining such Consolidated Net Earnings in
respect of (a) income taxes, and (b) Consolidated Interest Expense; provided,
however, that all charges recorded for costs which are properly classified as
non-recurring in accordance with GAAP shall be excluded from Consolidated Net
Earnings.
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"Consolidated Interest Expense" shall mean, for any period, interest
expense of Borrower and its Subsidiaries for such period, determined in
accordance with GAAP.
"Consolidated Net Earnings" shall mean the net earnings (losses) of
Borrower, after taxes and after extraordinary items, determined on a
Consolidated basis and in accordance with GAAP.
"Consolidated Net Worth" shall mean at any date the Consolidated
shareholders' equity of Borrower and its Subsidiaries, determined as of such
date in accordance with GAAP.
"Controlled Group" shall mean a Company and each "person" (as therein
defined) required to be aggregated with a Company under Code Sections 414(b),
(c), (m) or (o).
"Debt" shall mean, collectively, (a) all Indebtedness incurred by
Borrower to Agents or the Banks pursuant to this Agreement and includes the
principal of and interest on all Notes; (b) each extension, renewal or
refinancing thereof in whole or in part; and (c) the commitment and other fees,
and any prepayment premium payable hereunder.
"Default Rate" shall mean a rate per annum which shall be two percent
(2%) in excess of the Adjusted Prime Rate from time to time in effect.
"Derived LIBOR Rate" shall mean a rate per annum which shall be ninety
(90) basis points in excess of the LIBOR Rate.
"Environmental Laws" shall mean all provisions of law, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by the government
of the United States of America or by any state or municipality thereof or by
any court, agency, instrumentality, regulatory authority or commission of any of
the foregoing concerning health, safety and protection of, or regulation of the
discharge of substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated pursuant thereto.
"ERISA Event" shall mean: (a) the existence of any condition or event
with respect to an ERISA Plan which presents a risk of the imposition of an
excise tax or any other liability on a Company or of the imposition of a lien on
the assets of a Company, (b) a Controlled Group member has engaged in a
non-exempt "prohibited transaction" (as defined under ERISA Section 406 or Code
Section 4975) or a breach of a fiduciary duty under ERISA which could result in
liability to a Company, (c) a Controlled Group member has applied for a waiver
from the minimum funding requirements of Code Section 412 or ERISA Section 302
or a Controlled Group member is required to provide security under Code Section
401(a)(29) or XXXXX Xxxxxxx 000, (x) a Reportable Event has occurred with
respect to any Pension Plan as to which notice is required to be provided to the
PBGC, (e) a Controlled Group member has withdrawn from a Multiemployer Plan in a
"complete withdrawal" or a "partial withdrawal" (as such terms are defined in
ERISA Sections 4203 and 4205,
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respectively), (f) a Multiemployer Plan is in or is likely to be in
reorganization under ERISA Section 4241, (g) an ERISA Plan (and any related
trust) which is intended to be qualified under Code Sections 401 and 501 fails
to be so qualified or any "cash or deferred arrangement" under any such ERISA
Plan fails to meet the requirements of Code Section 401(k), (h) the PBGC takes
any steps to terminate a Pension Plan or appoint a trustee to administer a
Pension Plan, or a Controlled Group member takes steps to terminate a Pension
Plan, (i) a Controlled Group member or an ERISA Plan fails to satisfy any
requirements of law applicable to an ERISA Plan, (j) a claim, action, suit,
audit or investigation is pending or threatened with respect to an ERISA Plan,
other than a routine claim for benefits, or (k) a Controlled Group member incurs
or is expected to incur any liability for post-retirement benefits under any
Welfare Plan, other than as required by ERISA Section 601, et. seq.
or Code Section 4980B.
"ERISA Plan" shall mean an "employee benefit plan" (within the meaning
of ERISA Section 3(3)) that a Controlled Group member at any time sponsors,
maintains, contributes to, has liability with respect to or has an obligation to
contribute to such plan.
"Eurocurrency Reserve Percentage" shall mean, for any Interest Period
in respect of any LIBOR Loan, as of any date of determination, the aggregate of
the then stated maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves), expressed as a decimal, applicable to such
Interest Period (if more than one such percentage is applicable, the daily
average of such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) by the Board of Governors of the
Federal Reserve System, any successor thereto, or any other banking authority,
domestic or foreign, to which a Bank may be subject in respect to eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Federal Reserve Board) or in respect of any other category of liabilities
including deposits by reference to which the interest rate on LIBOR Loans is
determined or any category of extension of credit or other assets that include
the LIBOR Loans. For purposes hereof, such reserve requirements shall include,
without limitation, those imposed under Regulation D of the Federal Reserve
Board, and the LIBOR Loans shall be deemed to constitute Eurocurrency
Liabilities subject to such reserve requirements, without benefit of credits for
proration, exceptions or offsets which may be available from time to time to any
Bank under said Regulation D.
"Event of Default" shall mean an event or condition which constitutes
an event of default as defined in Article VII hereof.
"Federal Funds Effective Rate" shall mean, for any day, the rate per
annum (rounded upward to the nearest 1/100 of one percent) announced by the
Federal Reserve Bank of New York (or any successor) on such day as being the
weighted average of the rates on overnight federal funds transactions arranged
by federal funds brokers on the previous trading day, as computed and announced
by such Federal Reserve Bank (or any successor) in substantially the same manner
as such Federal Reserve Bank computes and announces the weighted average it
refers as the "Federal Funds Effective Rate" as of the Closing Date.
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"Financial Officer" shall mean any of the following officers: chief
executive officer, president, chief financial officer or controller.
"Funded Indebtedness" shall mean, for any period, all Indebtedness that
is funded, including, but not limited to, current, long-term and Subordinated
Indebtedness; provided, however, that (a) reimbursement obligations (contingent
or otherwise) under any letter of credit, banker's acceptance, interest rate
swap, cap, collar or floor agreement or other interest rate management device
shall not be deemed to be "funded" so long as such obligation remains solely a
contingent obligation, and (b) any guaranty shall be deemed to be "funded" but
shall be measured without duplication to Indebtedness otherwise included as
"funded".
"GAAP" shall mean generally accepted accounting principles as in effect
in the United States from time to time, which shall include the official
interpretations thereof by the Financial Accounting Standards Board, applied on
a basis consistent with the past accounting practices and procedures of
Borrower; provided that, with respect to changes in generally accepted
accounting principles that become effective following the Closing Date with
respect to non-cash items, such changes shall not be given effect if Borrower,
Agents and the Majority Banks agree not to give effect to such changes for the
purpose of evaluating the Companies' financial condition or performance under
this Agreement.
"Guarantor" shall mean a Person that pledges its credit or property in
any manner for the payment or other performance of the indebtedness, contract or
other obligation of another and includes (without limitation) any guarantor
(whether of payment or of collection), surety, co-maker, endorser or a Person
that agrees conditionally or otherwise to make any purchase, loan or investment
in order thereby to enable another to prevent or correct a default of any kind.
"Guarantor of Payment" shall mean any one of the Companies listed on
SCHEDULE 2 attached hereto, which are each executing and delivering a Guaranty
of Payment, or any other Person which shall execute and deliver a Guaranty of
Payment to Administrative Agent, for the benefit of the Banks, subsequent to the
Closing Date.
"Guaranty of Payment" shall mean each of the guaranties of payment of
Debt executed and delivered on or after the date hereof in connection herewith
by the Guarantors of Payment, as the same may be from time to time amended,
restated or otherwise modified.
"Indebtedness" shall mean, for any Company (excluding in all cases
trade payables payable in the ordinary course of business, and any guaranties
thereof by any Company) (a) all obligations to repay borrowed money, direct or
indirect, incurred, assumed, or guaranteed, (b) all obligations for the deferred
purchase price of capital assets, (c) all obligations under conditional sales or
other title retention agreements, (d) all lease obligations which have been or
should be capitalized on the books of such Company in accordance with GAAP, (e)
all reimbursement obligations (contingent or otherwise) under any letter of
credit, banker's acceptance, interest rate swap, cap, collar or floor agreement
or other interest rate management device, and (f) any other transaction
(including forward sale or purchase agreements or agreements for the sale of
receivables on a full recourse basis) having
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the commercial effect of a borrowing of money entered into by such Company to
finance its operations or capital requirements.
"Indenture" shall mean that certain Indenture dated as of November 25,
1997, between Borrower and Norwest Bank Minnesota, National Association, as
trustee, pursuant to which the Senior Subordinated Notes were issued to the
Senior Subordinated Noteholders, as the same may be from time to time amended,
restated or otherwise modified.
"Interest Adjustment Date" shall mean the last day of each Interest
Period.
"Interest Period" shall mean, with respect to any LIBOR Loan, the
period commencing on the date such LIBOR Loan is made and ending on the last day
of such period, as selected by Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of such period, as selected
by Borrower pursuant to the provisions below. The duration of each Interest
Period for any LIBOR Loan shall be one (1) month, two (2) months, three (3)
months or six (6) months, in each case as Borrower may select upon notice, as
set forth in Section 2.2 hereof, provided that (a) if Borrower fails to so
select the duration of any Interest Period, Borrower shall be deemed to have
converted such LIBOR Loan to a Prime Rate Loan; and (b) Borrower may not select
any Interest Period for a LIBOR Loan which both begins before and ends after any
date when principal is due on such LIBOR Loan.
"LIBOR Loan" shall mean a Loan described in Section 2.1 hereof on which
Borrower shall pay interest at a rate based on the Derived LIBOR Rate.
"LIBOR Rate" shall mean, for any Interest Period with respect to a
LIBOR Loan, the quotient (rounded upwards, if necessary, to the nearest one
sixteenth of one percent (1/16th of 1%) of: (a) the per annum rate of interest,
determined by Administrative Agent in accordance with its usual procedures
(which determination shall be conclusive absent manifest error) as of
approximately 11:00 A.M. (London time) two (2) Business Days prior to the
beginning of such Interest Period pertaining to such LIBOR Loan, as provided by
Telerate Service, Bloomberg's or Reuters (or any other similar company or
service that provides rate quotations comparable to those currently provided by
such companies) as the rate in the London interbank market for Dollar deposits
in immediately available funds with a maturity comparable to such Interest
Period, DIVIDED BY (b) a number equal to 1.00 MINUS the Eurocurrency Reserve
Percentage applicable to Administrative Agent. In the event that such rate
quotation is not available for any reason, then the rate (for purposes of clause
(a) hereof) shall be the rate, determined by Administrative Agent as of
approximately 11:00 A.M. (London time) two (2) Business Days prior to the
beginning of such Interest Period pertaining to such LIBOR Loan, to be the
average (rounded upwards, if necessary, to the nearest one sixteenth of one
percent (1/16th of 1%)) of the per annum rates at which dollar deposits in
immediately available funds in an amount comparable to such LIBOR Loan and with
a maturity comparable to such Interest Period are offered to the prime banks by
leading banks in the London interbank market. The LIBOR Rate shall be adjusted
automatically on and as of the effective date of any change in the Eurocurrency
Reserve Percentage.
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"Lien" shall mean any mortgage, security interest, lien, charge,
encumbrance on, pledge or deposit of, or conditional sale or other title
retention agreement with respect to any property (real or personal) or asset.
"Loan" or "Loans" shall mean the credit granted to Borrower by the
Banks in accordance with Section 2.1 hereof.
"Loan Documents" shall mean this Agreement, each of the Notes, each of
the Guaranties of Payment, and any other documents relating to any of the
foregoing, as any of the foregoing may from time to time be amended, restated or
otherwise modified or replaced.
"Majority Banks" shall mean the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the Total Commitment Amount, or, if there is any
borrowing hereunder, the holders of at least sixty-six and two-thirds percent
(66-2/3%) of the aggregate amount outstanding under the Notes.
"Multiemployer Plan" shall mean a Pension Plan that is subject to the
requirements of Subtitle E of Title IV of ERISA.
"Note" or "Notes" shall mean any Revolving Credit Note or Notes, or any
other note delivered pursuant to this Agreement.
"Obligor" shall mean (a) a Person whose credit or any of whose property
is pledged to the payment of the Debt and includes, without limitation, any
Guarantor, and (b) any signatory to a Related Writing.
"Parent" shall mean a corporation that may be created after the Closing
Date for the purpose of holding one hundred percent (100%) of the outstanding
capital stock of Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or its
successor.
"Pension Plan" shall mean an ERISA Plan that is a "pension plan"
(within the meaning of ERISA Section 3(2)).
"Permitted Parent Loans" shall mean loans from Borrower or a Subsidiary
of Borrower for any of the following purposes: (a) franchise taxes and other
fees required to maintain Parent's corporate existence, (b) costs associated
with preparation of required documents for filing with the SEC and with any
exchange on which Parent's securities are traded, (c) federal, state, foreign
and local taxes to the extent that such taxes are attributable to the ownership
of Borrower and its Subsidiaries, and (d) payments, directly or indirectly, to
employees to repurchase capital stock of Borrower upon the death, disability or
termination of employment of such employees, in amounts not to exceed One
Million Five Hundred Thousand Dollars ($1,500,000) per year.
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"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, corporation, limited
liability company, institution, trust, estate, government or other agency or
political subdivision thereof or any other entity.
"Prime Rate" shall mean the interest rate established from time to time
by Administrative Agent as Administrative Agent's prime rate, whether or not
such rate is publicly announced; the Prime Rate may not be the lowest interest
rate charged by Administrative Agent for commercial or other extensions of
credit. Each change in the Prime Rate shall be effective immediately from and
after such change.
"Prime Rate Loan" shall mean a Loan described in Section 2.1 hereof on
which Borrower shall pay interest at a rate based on the Adjusted Prime Rate.
"Related Writing" shall mean the Loan Documents and any assignment,
mortgage, security agreement, guaranty agreement, subordination agreement,
financial statement, audit report or other writing furnished by a Company or any
Obligor, or any of their respective officers, to Agents or the Banks pursuant to
or otherwise in connection with this Agreement.
"Reportable Event" shall mean a reportable event as that term is
defined in Title IV of ERISA, except actions of general applicability by the
Secretary of Labor under Section 110 of such Act.
"Revolving Credit Commitment" shall mean the obligation hereunder of
each Bank to make Revolving Loans, during the Commitment Period, up to the
aggregate amount set forth opposite such Bank's name under the column headed
"Maximum Amount" as described in Schedule 1 hereof (or such lesser amount as
shall be determined pursuant to Section 2.5 hereof).
"Revolving Credit Note" shall mean any Revolving Credit Note executed
and delivered pursuant to Section 2.1 hereof.
"Revolving Loan" shall mean a Loan granted to Borrower by the Banks in
accordance with Section 2.1 hereof.
"SEC" shall mean the Securities and Exchange Commission, or any
governmental body or agency succeeding to any of its principal functions.
"Senior Subordinated Noteholder" shall mean any one of the Senior
Subordinated Noteholders under the Indenture.
"Senior Subordinated Notes" shall mean the Senior Subordinated Notes
issued pursuant to the Indenture.
"Sister Company" shall mean a Person which is a Subsidiary of Parent
but which is not a Subsidiary of Borrower.
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"Subordinated", as applied to Indebtedness, shall mean that the
Indebtedness has been subordinated (by written terms or written agreement being,
in either case, in form and substance satisfactory to the Banks) in favor of the
prior payment in full of the Debt.
"Subsidiary" of a Person shall mean (a) a corporation more than fifty
percent (50%) of the voting power or capital stock of which is owned, directly
or indirectly, by such Person or by one or more other Subsidiaries of such
Person or by such Person and one or more Subsidiaries of such Person, (b) a
partnership or limited liability company of which such Person, one or more other
Subsidiaries of such Person or such Person and one or more Subsidiaries of such
Person, directly or indirectly, is a general partner or managing member, as the
case may be, or otherwise has the power to direct the policies, management and
affairs thereof, or (c) any other Person (other than a corporation) in which
such Person or one or more other Subsidiaries of such Person, directly or
indirectly, has at least a majority ownership interest or the power to direct
the policies, management and affairs thereof.
"Total Capitalization" shall mean, at any time, on a Consolidated basis
and in accordance with GAAP, the sum of Borrower's (a) Consolidated Net Worth,
plus (b) Total Senior Funded Indebtedness, plus (c) the outstanding principal on
the Senior Subordinated Notes.
"Total Commitment Amount" shall mean the obligation hereunder of the
Banks, during the Commitment Period, to make Loans up to the maximum aggregate
principal amount of One Hundred Million Dollars ($100,000,000) (or such lesser
amount as shall be determined pursuant to Section 2.5 hereof).
"Total Funded Indebtedness" shall mean, on a Consolidated basis and in
accordance with GAAP, all Funded Indebtedness of Borrower.
"Total Senior Funded Indebtedness" shall mean Total Funded Indebtedness
of the Companies except Subordinated Indebtedness.
"Unmatured Event of Default" shall mean an event or condition which,
with the lapse of any applicable grace period or the giving of notice or both
would constitute, an Event of Default and which has not been waived by the
Majority Banks in writing.
"Voting Stock" shall mean stock of a corporation of a class or classes
having general voting power under ordinary circumstances to elect a majority of
the board of directors, managers or trustees of such corporation (irrespective
of whether or not at the time stock of any other class or classes shall have or
might have voting power by the reason of the happening of any contingency).
"Welfare Plan" shall mean an ERISA Plan that is a "welfare plan" within
the meaning of ERISA Section 3 (l).
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"Wholly-Owned Subsidiary" shall mean each Subsidiary all of whose
outstanding stock, other than directors' qualifying shares, shall at the time be
owned by Borrower and/or by one or more Wholly-Owned Subsidiaries.
Any accounting term not specifically defined in this Article I shall
have the meaning ascribed thereto by GAAP.
The foregoing definitions shall be applicable to the singular and
plurals of the foregoing defined terms.
ARTICLE II. AMOUNT AND TERMS OF CREDIT
SECTION 2.1. AMOUNT AND NATURE OF CREDIT. Subject to the terms and
conditions of this Agreement, the Banks will participate to the extent
hereinafter provided in making Loans to Borrower, in such aggregate amount as
Borrower shall request pursuant to the Commitment; provided, however, that in no
event shall the aggregate principal amount of all Loans outstanding under this
Agreement be in excess of the Total Commitment Amount.
Each Bank, for itself and not one for any other, agrees to participate
in Loans made hereunder during the Commitment Period on such basis that (a)
immediately after the completion of any borrowing by Borrower, the aggregate
principal amount then outstanding on the Notes issued to such Bank shall not be
in excess of the amount shown opposite the name of such Bank under the column
headed "Maximum Amount" as set forth in SCHEDULE 1 hereto, and (b) such
aggregate principal amount outstanding on the Notes issued to such Bank shall
represent that percentage of the aggregate principal amount then outstanding on
all Notes (including the Notes held by such Bank) which is such Bank's
Commitment Percentage.
Each borrowing from the Banks hereunder shall be made pro rata
according to the Banks' respective Commitment Percentages. Borrower shall have
the option, during the Commitment Period and subject to the terms and conditions
set forth herein, to borrow hereunder up to the Total Commitment Amount by means
of any combination of (a) Prime Rate Loans maturing on the last day of the
Commitment Period and bearing interest at a rate per annum which shall be one
hundred (100) basis points less than the Adjusted Prime Rate from time to time
in effect, or (b) LIBOR Loans maturing on the last day of the Commitment Period
and bearing interest at a rate per annum which shall be the Derived LIBOR Rate,
which rate for each Interest Period shall be a fixed rate established at the
beginning of each such Interest Period.
Borrower shall pay interest on the unpaid principal amount of Prime
Rate Loans outstanding from time to time from the date thereof until paid,
commencing March 31, 1998, and continuing on the last day of each succeeding
June, September, December and March of each year and at the maturity thereof.
Borrower shall pay interest at a fixed rate for each Interest Period on the
unpaid principal amount of each LIBOR Loan outstanding from time to time from
the date thereof until paid, payable on each Interest Adjustment Date with
respect to an Interest Period (provided that if
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an Interest Period exceeds three (3) months, the interest must be paid every
three (3) months, commencing three (3) months from the beginning of such
Interest Period).
At the request of Borrower, provided no Unmatured Event of Default or
Event of Default exists hereunder, the Banks shall convert Prime Rate Loans to
LIBOR Loans at any time, subject to the notice and other provisions of Section
2.2 hereof, and shall convert LIBOR Loans to Prime Rate Loans on any Interest
Adjustment Date.
The obligation of Borrower to repay the Prime Rate Loans and the LIBOR
Loans made by each Bank and to pay interest thereon shall be evidenced by a
Revolving Credit Note of Borrower substantially in the form of EXHIBIT A hereto,
with appropriate insertions, dated the Closing Date and payable to the order of
such Bank on the last day of the Commitment Period in the principal amount of
its Revolving Credit Commitment, or, if less, the aggregate unpaid principal
amount of Loans made hereunder by such Bank. Subject to the provisions of this
Agreement, Borrower shall be entitled under this Section 2.1 to borrow funds,
repay the same in whole or in part and re-borrow hereunder at any time and from
time to time during the Commitment Period.
SECTION 2.2. CONDITIONS TO LOANS. The obligation of each Bank to make
Loans or to convert any Loan hereunder is conditioned, in the case of each
borrowing or conversion hereunder, upon:
(a) all conditions precedent as listed in Article IV hereof shall have
been satisfied;
(b) receipt by Administrative Agent of a notice of a request for a
Loan, such notice (i) to contain the proposed date and aggregate amount of the
requested borrowing and initial Interest Period, if applicable, and (ii) to be
received by 1:00 P.M. (Cleveland, Ohio time) on the proposed date of borrowing
with respect to Prime Rate Loans and, with respect to LIBOR Loans, by 1:00 P.M.
(Cleveland, Ohio time) three (3) Business Days prior to the proposed date of
borrowing. Such notice shall be given by a Financial Officer of Borrower, except
that, with respect to a notice requesting Loans in an aggregate amount of less
than Five Million Dollars ($5,000,000), such request may be made by Xxxxxx
Xxxxxxxx, or such other agent of Borrower who may be authorized by Borrower in a
writing delivered to Administrative Agent. Administrative Agent shall notify
each Bank of the date, amount and initial interest period (if applicable)
promptly upon the receipt of such notice, and, in any event, by 3:00 P.M.
(Cleveland, Ohio time) on the date such notice is received. On the date such
Loan is to be made, each Bank shall provide Administrative Agent, not later than
4:00 P.M. (Cleveland, Ohio time), with the amount in federal or other
immediately available funds, required of it;
(c) Borrower's request for a Prime Rate Loan shall be in an amount of
not less than Five Hundred Thousand Dollars ($500,000), increased by increments
of One Hundred Thousand Dollars ($100,000), and Borrower's request for a LIBOR
Loan shall be in an amount of not less than One Million Dollars ($1,000,000),
increased by increments of Two Hundred Fifty Thousand Dollars ($250,000);
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(d) the fact that no Unmatured Event of Default or Event of Default
shall then exist or immediately after the Loan, or conversion of such Loan,
would exist; and
(e) the fact that each of the representations and warranties contained
in Article VI hereof shall be true and correct with the same force and effect as
if made on and as of the date of such Loan or the conversion of such Loan,
except to the extent that any thereof expressly relate to an earlier date.
Each request for a Loan or that a Loan be converted by Borrower
hereunder shall be deemed to be a representation and warranty by Borrower as of
the date of such request as to the facts specified in (d) and (e) above. At no
time shall Borrower request that LIBOR Loans be outstanding for more than six
(6) different Interest Periods at any one (1) time, and, if Prime Rate Loans are
outstanding, then LIBOR Loans shall be limited to five (5) different Interest
Periods at any one (1) time.
Each request for a LIBOR Loan shall be irrevocable and binding on
Borrower and Borrower shall indemnify Agents and the Banks against any loss or
expense incurred by Agents or the Banks as a result of any failure by Borrower
to consummate such transaction including, without limitation, any loss
(including loss of anticipated profits) or expense incurred by reason of
liquidation or re-employment of deposits or other funds acquired by the Banks to
fund the Loan. A certificate as to the amount of such loss or expense submitted
by the Banks to Borrower shall be conclusive and binding for all purposes,
absent manifest error.
SECTION 2.3. PAYMENT ON NOTES, ETC. All payments of principal, interest
and commitment and other fees shall be made to Administrative Agent in
immediately available funds for the account of the Banks, and Administrative
Agent, within one (1) Business Day, shall distribute to each Bank its ratable
share of the amount of principal, interest, and commitment and other fees
received by it for the account of such Bank. Each Bank shall record (a) any
principal, interest or other payment, and (b) the principal amount of the Prime
Rate Loans and the LIBOR Loans and all prepayments thereof and the applicable
dates with respect thereto, by such method as such Bank may generally employ;
provided, however, that failure to make any such entry shall in no way detract
from Borrower's obligations under each such Note. The aggregate unpaid amount of
Loans set forth on the records of Administrative Agent shall be rebuttably
presumptive evidence of the principal and interest owing and unpaid on each
Note. Whenever any payment to be made hereunder, including, without limitation,
any payment to be made on any Note, shall be stated to be due on a day which is
not a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall in each case be included in the computation
of the interest payable on such Note; provided, however, that with respect to
any LIBOR Loan, if the next succeeding Business Day falls in the succeeding
calendar month, such payment shall be made on the preceding Business Day and the
relevant Interest Period shall be adjusted accordingly.
SECTION 2.4. PREPAYMENT. Borrower shall have the right at any time or
from time to time to prepay, on a pro rata basis, all or any part of the
principal amount of the Notes then outstanding as designated by Borrower, plus
interest accrued on the amount so prepaid to the date
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of such prepayment. Borrower shall give Administrative Agent notice of
prepayment of any Prime Rate Loans by not later than 11:00 A.M. (Cleveland, Ohio
time) on the Business Day such prepayment is to be made and written notice of
the prepayment of any LIBOR Loan not later than 1:00 P.M. (Cleveland, Ohio time)
three (3) Business Days before the Business Day on which such prepayment is to
be made. Prepayments of Prime Rate Loans shall be without any premium or
penalty. In any case of prepayment of any LIBOR Loan, Borrower agrees that if
the LIBOR Rate as determined as of 11:00 A.M. (London time), three (3) Business
Days prior to the date of prepayment of such LIBOR Loan (hereinafter,
"Prepayment LIBOR") shall be lower than the last LIBOR Rate previously
determined for such LIBOR Loan with respect to which prepayment is intended to
be made (hereinafter, "Last LIBOR"), then Borrower shall, upon written notice by
Administrative Agent, promptly pay to Administrative Agent, for the account of
each of the Banks, in immediately available funds, a prepayment fee equal to the
product of (a) a rate (the "Prepayment Rate") which shall be equal to the
difference between the Last LIBOR and the Prepayment LIBOR, times (b) all or
such part of the principal amounts of the Notes as relate to the LIBOR Loan to
be prepaid, times (c) the number of days in the period commencing with the date
on which such prepayment is to be made to that date which coincides with the
last day of the Interest Period previously established when the LIBOR Loan,
which is to be prepaid, were made. In addition, Borrower shall immediately pay
directly to Administrative Agent, for the account of the Banks, the amount of
any additional costs or expenses (including, without limitation, cost of telex,
wires, or cables) incurred by Administrative Agent or the Banks in connection
with the prepayment, upon Borrower's receipt of a written statement from
Administrative Agent. Each prepayment of a LIBOR Loan shall be in the aggregate
principal sum of not less than One Million Dollars ($1,000,000).
SECTION 2.5. COMMITMENT AND OTHER FEES; TERMINATION OR REDUCTION OF
COMMITMENTS.
(a) Borrower shall pay to Administrative Agent, for the ratable account
of the Banks, as a consideration for the Commitment, a commitment fee from the
Closing Date to and including the last day of the Commitment Period equal to (i)
one-fourth percent (1/4%) per annum, times (ii) the average daily unborrowed
amount of the Commitment. The commitment fee shall be payable, in arrears, on
March 31, 1998 and on the last day of each June, September, December and March
thereafter, and on the last day of the Commitment Period.
(b) Borrower shall pay to Administrative Agent, for its sole benefit,
on the Closing Date and on each anniversary of the Closing Date, all fees as set
forth in the Administrative Agent Fee Letter from Administrative Agent to
Borrower dated the Closing Date and accepted by Borrower on the Closing Date.
(c) Borrower may at any time or from time to time terminate in whole or
ratably in part the Commitment of the Banks hereunder (on a pro rata basis) to
an amount not less than the aggregate principal amount of the Loans then
outstanding, by giving Agents not fewer than five (5) Business Days' notice,
provided that any such partial termination shall be in an aggregate amount for
all of the Banks of Five Million Dollars ($5,000,000) or any multiple thereof.
Administrative Agent shall promptly notify each Bank of its proportionate amount
and the date of each such
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termination. After each such termination, the commitment fees payable hereunder
shall be calculated upon the Commitment of the Banks as so reduced. If Borrower
terminates in whole the Commitment of the Banks, on the effective date of such
termination (Borrower having prepaid in full the unpaid principal balance, if
any, of the Notes outstanding, together with all interest and commitment and
other fees and amounts accrued and unpaid), all of the Notes outstanding shall
be delivered to Administrative Agent marked "Canceled" and redelivered to
Borrower. Any partial reduction in the Commitment of the Banks shall be
effective during the remainder of the Commitment Period. Any reduction in the
Commitment which causes a prepayment of any LIBOR Loan shall be subject to the
prepayment fee set forth in Section 2.4 hereof.
SECTION 2.6. COMPUTATION OF INTEREST AND FEES; DEFAULT RATE. Interest
on Loans and commitment and other fees and charges hereunder shall be computed
on the basis of a year having three hundred sixty (360) days and calculated for
the actual number of days elapsed. Anything herein to the contrary
notwithstanding, if an Event of Default shall occur hereunder, the principal of
each Note and the unpaid interest thereon shall bear interest, until paid, at
the Default Rate. In no event shall the rate of interest hereunder exceed the
rate allowable by law.
SECTION 2.7. MANDATORY PAYMENT. If the sum of the aggregate principal
amount of all Loans outstanding at any time exceeds the Total Commitment Amount,
Borrower shall, as promptly as practicable, but in no event to be later than the
next Business Day, prepay an aggregate principal amount of the Loans sufficient
to bring the aggregate outstanding principal amount of all Loans within the
Commitment of the Banks. Any prepayment of a LIBOR Loan pursuant to this Section
2.7 shall be subject to the prepayment fees set forth in Section 2.4 hereof.
SECTION 2.8. EXTENSION OR INCREASE OF COMMITMENT. Upon the written
request of Borrower received by Agents at least ninety (90) days prior to any
anniversary of the Closing Date (prior to the last day of the Commitment
Period), the Banks shall have the option of extending the Commitment for an
additional year. Each such extension shall require the unanimous written consent
of each of the Banks. In the event that the Commitment is at any time increased,
Borrower shall pay to Administrative Agent, for the benefit of the Banks in
accordance with their respective Commitment Percentages, an increase fee of
one-fourth percent (1/4%) of the amount by which the Commitment has been
increased. Such increase fee shall be in addition to all fees, costs and other
amounts payable under the terms of this Agreement or as may otherwise be
negotiated between Borrower and the Banks.
ARTICLE III. ADDITIONAL PROVISIONS RELATING TO LIBOR LOANS
SECTION 3.1. RESERVES OR DEPOSIT REQUIREMENTS, ETC. If, at any time,
any law, treaty or regulation (including, without limitation, Regulation D of
the Board of Governors of the Federal Reserve System) or the interpretation
thereof by any governmental authority charged with the administration thereof or
any central bank or other fiscal, monetary or other authority shall impose
(whether or not having the force of law), modify or deem applicable any reserve
and/or special deposit requirement (other than reserves included in the
Eurocurrency Reserve Percentage,
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the effect of which is reflected in the interest rate(s) of the LIBOR Loan(s) in
question) against assets held by, or deposits in or for the amount of any Loans
by, any Bank, and the result of the foregoing is to increase the cost (whether
by incurring a cost or adding to a cost) to such Bank of making or maintaining
hereunder LIBOR Loans or to reduce the amount of principal or interest received
by such Bank with respect to such LIBOR Loans, then, upon demand by such Bank,
Borrower shall pay to such Bank from time to time on Interest Adjustment Dates
with respect to such LIBOR Loans, as additional consideration hereunder,
additional amounts sufficient to fully compensate and indemnify such Bank for
such increased cost or reduced amount, assuming (which assumption such Bank need
not corroborate) such additional cost or reduced amount was allocable to such
LIBOR Loans. A certificate as to the increased cost or reduced amount as a
result of any event mentioned in this Section 3.1, setting forth the
calculations therefor, shall be promptly submitted by such Bank to Borrower and
shall, in the absence of manifest error, be conclusive and binding as to the
amount thereof. Notwithstanding any other provision of this Agreement, after any
such demand for compensation by any Bank, Borrower, upon at least three (3)
Business Days' prior written notice to such Bank through Administrative Agent,
may prepay the affected LIBOR Loans in full or convert all LIBOR Loans to Prime
Rate Loans regardless of the Interest Period of any thereof. Any such prepayment
or conversion shall be subject to the prepayment fees set forth in Section 2.4
hereof. Each Bank shall notify Borrower as promptly as practicable (with a copy
thereof delivered to Administrative Agent) of the existence of any event which
will likely require the payment by Borrower of any such additional amount under
this Section.
SECTION 3.2. TAX LAW, ETC. In the event that by reason of any law,
regulation or requirement or in the interpretation thereof by an official
authority, or the imposition of any requirement of any central bank whether or
not having the force of law, any Bank shall, with respect to this Agreement or
any transaction under this Agreement, be subjected to any tax, levy, impost,
charge, fee, duty, deduction or withholding of any kind whatsoever (other than
any tax imposed upon the total net income of such Bank) and if any such measures
or any other similar measure shall result in an increase in the cost to such
Bank of making or maintaining any LIBOR Loan or in a reduction in the amount of
principal, interest or commitment fee receivable by such Bank in respect
thereof, then such Bank shall promptly notify Borrower stating the reasons
therefor. Borrower shall thereafter pay to such Bank upon demand from time to
time on Interest Adjustment Dates with respect to such LIBOR Loans, as
additional consideration hereunder, such additional amounts as shall fully
compensate such Bank for such increased cost or reduced amount. A certificate as
to any such increased cost or reduced amount, setting forth the calculations
therefor, shall be submitted by such Bank to Borrower and shall, in the absence
of manifest error, be conclusive and binding as to the amount thereof.
If any Bank receives such additional consideration from Borrower
pursuant to this Section 3.2, such Bank shall use reasonable efforts to obtain
the benefits of any refund, deduction or credit for any taxes or other amounts
on account of which such additional consideration has been paid and shall
reimburse Borrower to the extent, but only to the extent, that such Bank shall
receive a refund of such taxes or other amounts together with any interest
thereon or an effective net reduction in taxes or other governmental charges
(including any taxes imposed on or measured by the total net income of such
Bank) of the United States or any state or subdivision thereof by virtue of any
such
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deduction or credit, after first giving effect to all other deductions and
credits otherwise available to such Bank. If, at the time any audit of such
Bank's income tax return is completed, such Bank determines, based on such
audit, that it was not entitled to the full amount of any refund reimbursed to
Borrower as aforesaid or that its net income taxes are not reduced by a credit
or deduction for the full amount of taxes reimbursed to Borrower as aforesaid,
Borrower, upon demand of such Bank, shall promptly pay to such Bank the amount
so refunded to which such Bank was not so entitled, or the amount by which the
net income taxes of such Bank were not so reduced, as the case may be.
Notwithstanding any other provision of this Agreement, after any such
demand for compensation by any Bank, Borrower, upon at least three (3) Business
Days' prior written notice to such Bank through Administrative Agent, may prepay
the affected LIBOR Loans in full or convert all LIBOR Loans to Prime Rate Loans
regardless of the Interest Period of any thereof. Any such prepayment or
conversion shall be subject to the prepayment fees set forth in Section 2.4
hereof.
SECTION 3.3. EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE
UNASCERTAINABLE. In respect of any LIBOR Loans, in the event that Administrative
Agent shall have determined that dollar deposits of the relevant amount for the
relevant Interest Period for such LIBOR Loans are not available to the Banks in
the applicable Eurodollar market or that, by reason of circumstances affecting
such market, adequate and reasonable means do not exist for ascertaining the
LIBOR rate applicable to such Interest Period, as the case may be,
Administrative Agent shall promptly give notice of such determination to
Borrower and (a) any notice of new LIBOR Loans (or conversion of existing Loans
to LIBOR Loans) previously given by Borrower and not yet borrowed (or converted,
as the case may be) shall be deemed a notice to make Prime Rate Loans, and (b)
Borrower shall be obligated either to prepay, or to convert to Prime Rate Loans,
any outstanding LIBOR Loans on the last day of the then current Interest Period
or Periods with respect thereto.
SECTION 3.4. INDEMNITY. Without prejudice to any other provisions of
this Article III, Borrower hereby agrees to indemnify each Bank against any loss
or expense which such Bank may sustain or incur as a consequence of any default
by Borrower in payment when due of any amount hereunder in respect of any LIBOR
Loan, including, but not limited to, any loss of profit, premium or penalty
incurred by such Bank in respect of funds borrowed by it for the purpose of
making or maintaining such LIBOR Loan, as determined by such Bank in the
exercise of its sole but reasonable discretion. A certificate as to any such
loss or expense shall be promptly submitted by such Bank to Borrower and shall,
in the absence of manifest error, be conclusive and binding as to the amount
thereof.
SECTION 3.5. CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL. If at any
time any new law, treaty or regulation, or any change in any existing law,
treaty or regulation, or any interpretation thereof by any governmental or other
regulatory authority charged with the administration thereof, shall make it
unlawful for any Bank to fund any LIBOR Loans which it is committed to make
hereunder with moneys obtained in the Eurodollar market, the commitment of such
Bank to fund LIBOR Loans shall, upon the happening of such event forthwith
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be suspended for the duration of such illegality, and such Bank shall by written
notice to Borrower and Agents declare that its commitment with respect to such
Loans has been so suspended and, if and when such illegality ceases to exist,
such suspension shall cease and such Bank shall similarly notify Borrower and
Agents. If any such change shall make it unlawful for any Bank to continue in
effect the funding in the applicable Eurodollar market of any LIBOR Loan
previously made by it hereunder, such Bank shall, upon the happening of such
event, notify Borrower, Agents and the other Banks thereof in writing stating
the reasons therefor, and Borrower shall, on the earlier of (a) the last day of
the then current Interest Period or (b) if required by such law, regulation or
interpretation, on such date as shall be specified in such notice, either
convert all LIBOR Loans to Prime Rate Loans or prepay all LIBOR Loans to the
Banks in full. Any such prepayment or conversion shall be subject to the
prepayment fees described in Section 2.4 hereof.
SECTION 3.6. FUNDING. Each Bank may, but shall not be required to, make
LIBOR Loans hereunder with funds obtained outside the United States.
ARTICLE IV. CONDITIONS PRECEDENT
The obligation of the Banks to make the first Loan hereunder is subject
to Borrower satisfying each of the following conditions:
SECTION 4.1. NOTES. Borrower shall have executed and delivered to each
Bank its Revolving Credit Note.
SECTION 4.2. GUARANTIES OF PAYMENT OF DEBT. Each Guarantor of Payment
shall have executed and delivered its Guaranty of Payment to Administrative
Agent.
SECTION 4.3. OFFICER'S CERTIFICATE, RESOLUTIONS, ORGANIZATIONAL
DOCUMENTS. Borrower and each Guarantor of Payment shall have delivered to each
Bank an officer's certificate certifying the names of the officers of Borrower
or such Guarantor of Payment authorized to sign the Loan Documents to which it
is a party, together with the true signatures of such officers and certified
copies of (a) the resolutions of the board of directors of Borrower and each
Guarantor of Payment evidencing approval of the execution and delivery of the
Loan Documents and the execution of other Related Writings to which Borrower or
such Guarantor of Payment, as the case may be, is a party, and (b) the Articles
(or Certificate) of Incorporation and all amendments thereto of Borrower and
each Guarantor of Payment.
SECTION 4.4. LEGAL OPINION. An opinion of counsel for Borrower and each
Guarantor of Payment, in form and substance satisfactory to Agents and the
Banks, shall have been delivered to each Bank.
SECTION 4.5. GOOD STANDING CERTIFICATES. A good standing certificate
for Borrower and each Guarantor of Payment listed on SCHEDULE 4.5 hereto, issued
by the Secretary of State in each state listed on SCHEDULE 4.5 hereof shall have
been delivered to each Bank.
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SECTION 4.6. CLOSING, AGENTS', AND LEGAL FEES. Borrower shall have paid
to Administrative Agent, for its sole benefit, such fees as described in the
Administrative Agent Fee Letter referenced in Section 2.5 hereof. Borrower shall
also have paid all legal fees and expenses of Agents in connection with the
preparation and negotiation of the Loan Documents.
SECTION 4.7. UNIFORM COMMERCIAL CODE FINANCING STATEMENTS AND LIEN
SEARCHES. With respect to the property owned or leased by Borrower and each
Guarantor of Payment, Borrower shall have caused to be delivered to Agents: (a)
the results of Uniform Commercial Code lien searches, satisfactory to Agents and
the Banks; and (b) the results of federal and state tax lien and judicial lien
searches, satisfactory to Agents and the Banks.
SECTION 4.8. NO MATERIAL ADVERSE CHANGE. No material adverse change, in
the opinion of Agents, shall have occurred in the financial condition,
operations or prospects of the Companies.
SECTION 4.9. SENIOR SUBORDINATED NOTES. Borrower shall have furnished
to Agents a copy of the Indenture and ancillary documents relating to the Senior
Subordinated Notes, including, but not limited to any Offering Memorandum
prepared in connection therewith, certified by the Secretary of Borrower as
being true and complete.
SECTION 4.10. MISCELLANEOUS. Borrower shall have provided such other
items as may be reasonably required by Agents or the Banks.
ARTICLE V. COVENANTS
Borrower agrees that so long as the Commitment remains in effect and
thereafter until the principal of and interest on all Notes and all other
payments and fees due hereunder shall have been paid in full, Borrower shall
perform and observe, and shall cause each Company to perform and observe, each
of the following provisions:
SECTION 5.1. INSURANCE. Each Company shall (a) at all times maintain
insurance to such extent and against such hazards and liabilities as is commonly
maintained by companies similarly situated, and (b) within ten (10) days of
Administrative Agent or Co-Agent's written request, Borrower shall furnish to
Administrative Agent and Co-Agent such information about Borrower's insurance as
Administrative Agent or Co-Agent may from time to time reasonably request, which
information shall be prepared in form and detail satisfactory to Administrative
Agent and Co-Agent and certified by a Financial Officer of Borrower.
SECTION 5.2. MONEY OBLIGATIONS. Each Company shall pay in full (a)
prior in each case to the date when penalties would attach, all taxes,
assessments and governmental charges and levies (except only those so long as
and to the extent that the same shall be contested in good faith by appropriate
and timely proceedings and for which adequate reserves have been established in
accordance with GAAP) for which it may be or become liable or to which any or
all
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of its properties may be or become subject; (b) all of its wage obligations to
its employees in compliance with the Fair Labor Standards Act (29 U.S.C.
206-207) or any comparable provisions; and (c) all of its other obligations
calling for the payment of money (except only those so long as and to the extent
that the same shall be contested in good faith and for which adequate reserves
have been established in accordance with GAAP) before such payment becomes
overdue.
SECTION 5.3. FINANCIAL STATEMENTS. Borrower shall furnish to each Bank:
(a) within sixty (60) days after the end of each of the first three (3)
quarter-annual periods of each fiscal year of Parent and Borrower, balance
sheets of Parent and Borrower, as of the end of such period and statements of
income (loss), stockholders' equity and cash flow for the quarter and fiscal
year to date periods, all prepared on a Consolidated basis (consolidated as to
Parent and Consolidated as to Borrower, independent of Parent), in accordance
with GAAP, and in form and detail satisfactory to the Banks and certified by a
Financial Officer of Borrower, subject only to changes from audit and year-end
adjustments and except that such statements need not contain notes;
(b) within one hundred twenty (120) days after the end of each fiscal
year of Parent and Borrower, an annual audit report of Parent and Borrower for
that year prepared on a Consolidated basis (consolidated as to Parent and
Consolidated as to Borrower, independent of Parent), in accordance with GAAP,
and in form and detail satisfactory to the Banks and certified by an independent
public accountant satisfactory to the Banks, which report shall include balance
sheets and statements of income (loss), stockholders' equity and cash-flow for
that period;
(c) concurrently with the delivery of the financial statements in (a)
and (b) above, a Compliance Certificate;
(d) with the delivery of the quarterly and annual financial statements
in (a) and (b) above, a copy of any letter disclosing material weaknesses in the
internal controls of Borrower or any Subsidiary of Borrower or such similar
writings;
(e) within ninety (90) days after the end of each fiscal year of
Borrower, annual pro-forma projections of the Companies for the then current
fiscal year and the next two (2) succeeding fiscal years, to be in form
acceptable to Agents;
(f) as soon as available, copies of all material notices, reports,
definitive proxy or other statements and other documents sent by Borrower (or
Parent, if applicable) to its shareholders, to the holders of any of its
debentures or bonds or the trustee of any indenture securing the same or
pursuant to which they are issued, or sent by Borrower (or Parent, if
applicable) (in final form) to any securities exchange or over the counter
authority or system, or to the Securities and Exchange Commission or any similar
federal agency having regulatory jurisdiction over the issuance of Borrower's or
Parent's securities; and
(g) within ten (10) days of Administrative Agent's or Co-Agent's
written request, such other information about the financial condition,
properties and operations of any Company as
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Administrative Agent or Co-Agent may from time to time reasonably request, which
information shall be submitted in form and detail satisfactory to Administrative
Agent or Co-Agent, as appropriate, and certified by a Financial Officer of the
Company or Companies in question.
SECTION 5.4. FINANCIAL RECORDS. Each Company shall at all times
maintain true and complete records and books of account including, without
limiting the generality of the foregoing, appropriate reserves for possible
losses and liabilities, all in accordance with GAAP, and at all reasonable times
(during normal business hours and upon notice to the Company in question) permit
Administrative Agent or Co-Agent, or their respective representatives, to
examine that Company's books and records and to make excerpts therefrom and
transcripts thereof.
SECTION 5.5. FRANCHISES. Each Company shall preserve and maintain at
all times its existence.
SECTION 5.6. ERISA COMPLIANCE. No Company shall incur any material
accumulated funding deficiency within the meaning of ERISA, or any material
liability to the PBGC, established thereunder in connection with any ERISA Plan.
Borrower shall furnish to the Banks (a) as soon as possible and in any event
within thirty (30) days after any Company knows or has reason to know that any
Reportable Event with respect to any ERISA Plan has occurred, a statement of the
Financial Officer of such Company, setting forth details as to such Reportable
Event and the action which such Company proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event given to the PBGC if
a copy of such notice is available to such Company, and (b) promptly after
receipt thereof a copy of any notice such Company, or any member of the
Controlled Group may receive from the PBGC or the Internal Revenue Service with
respect to any ERISA Plan administered by such Company; provided, that this
latter clause shall not apply to notices of general application promulgated by
the PBGC or the Internal Revenue Service. Borrower shall promptly notify the
Banks of any material taxes assessed, proposed to be assessed or which Borrower
has reason to believe may be assessed against a Company by the Internal Revenue
Service with respect to any ERISA Plan. As used in this Section "material" means
the measure of a matter of significance which shall be determined as being an
amount equal to five percent (5%) of the Consolidated Net Worth of Borrower and
its Subsidiaries. As soon as practicable, and in any event within twenty (20)
days, after any Company becomes aware that an ERISA Event has occurred, such
Company shall provide Bank with notice of such ERISA Event with a certificate by
a Financial Officer of such Company setting forth the details of the event and
the action such Company or another Controlled Group member proposes to take with
respect thereto. Borrower shall, at the request of Agents, deliver or cause to
be delivered to Agents true and correct copies of any documents relating to the
ERISA Plan of any Company.
SECTION 5.7. FINANCIAL COVENANTS.
(a) INTEREST COVERAGE RATIO. Borrower and its Subsidiaries shall not
suffer or permit, at any time, the ratio of (i) Consolidated EBIT to (ii)
Consolidated Interest Expense to be less than 1.60 to 1.00, based upon
Borrower's financial statements for the most recently completed fiscal quarter
and the three (3) previous fiscal quarters (on a rolling four (4) quarter
basis).
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(b) SENIOR FUNDED INDEBTEDNESS TO CAPITALIZATION. Borrower and its
Subsidiaries shall not suffer or permit, at any time, the ratio of (i) Total
Senior Funded Indebtedness to (ii) Total Capitalization, to exceed .30 to 1.00,
based upon Borrower's financial statements for the most recently completed
fiscal quarter.
SECTION 5.8. BORROWING. Parent shall not create, incur or have
outstanding any obligation for borrowed money or any Indebtedness of any kind,
other than Permitted Parent Loans. Neither Borrower nor any Subsidiary of
Borrower shall create, incur or have outstanding any obligation for borrowed
money or any Indebtedness of any kind in violation of any of the terms and
conditions of the Indenture.
SECTION 5.9. LIENS. No Company shall create, assume or suffer to exist
any Lien upon any of its property or assets, whether now owned or hereafter
acquired; provided that this Section shall not apply to the following:
(a) any mortgage, security interest or Lien securing only indebtedness
incurred to Agents and the Banks;
(b) any Lien for taxes not yet due or which are being actively
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP;
(c) any other statutory Lien incidental to the conduct of its business
or the ownership of its property and assets which (i) was not incurred in
connection with the borrowing of money or the obtaining of advances or credit,
and (ii) which does not in the aggregate materially detract from the value of
its property or assets or materially impair the use thereof in the operation of
its business;
(d) any Lien on property or assets of a Subsidiary of Borrower to
secure obligations of such Subsidiary of Borrower to Borrower or a Guarantor of
Payment;
(e) any purchase money Lien on fixed assets of Borrower or a Subsidiary
of Borrower provided that such Lien only attaches to the property being
acquired;
(f) the Liens set forth in SCHEDULE 5.9 attached hereto;
(g) easements or other minor defect or irregularities in title of real
property not interfering in any material respect with the use of such property
in the business of any Company; or
(h) any Lien on fixed assets that are owned by a Company (other than
Parent) as a result of an Acquisition, so long as such Lien is released within
thirty (30) days after the Acquisition.
No Company shall enter into any contract or agreement which would prohibit
Agents or the Banks from acquiring a security interest, mortgage or other Lien
on, or a collateral assignment of, any of the property or assets of any Company.
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SECTION 5.10. REGULATIONS U and X. No Company shall take any action
that would result in any non-compliance of the Loans with Regulations U and X of
the Board of Governors of the Federal Reserve System.
SECTION 5.11. INVESTMENTS AND LOANS.
(a) Borrower and its Subsidiaries shall not (i) make or hold any
investment in any stocks, bonds or securities of any kind in any Sister Company,
or (ii) make or keep outstanding any advance or loan to any Sister Company.
(b) Without the prior written consent of Agents and the Majority Banks,
Borrower and its Subsidiaries shall not (i) make or hold any investment in any
stocks, bonds or securities of any kind in any Person which is not Borrower or a
Guarantor of Payment, (ii) make or keep outstanding any advance or loan to any
Person which is not Borrower or a Guarantor of Payment, or (iii) be or become a
Guarantor of any kind, except guaranties securing only Indebtedness of Borrower
and its Subsidiaries incurred or permitted pursuant to this Agreement; provided,
that this Section shall not apply to:
(A) loans made to Parent in accordance with Section 5.8;
(B) loans made by Borrower or any Subsidiary of Borrower to
Parent which shall not exceed the aggregate amount, for all such loans
by Borrower and its Subsidiaries, of Two Million Dollars ($2,000,000)
at any one (1) time outstanding (in addition to the loans permitted by
subpart (A) hereof);
(C) loans made to a direct or indirect Subsidiary of Borrower,
provided there is compliance with Section 5.18; or
(D) investments in any Person which is not Parent or a Sister
Company so long as all such investments do not exceed the aggregate
amount of Ten Million Dollars ($10,000,000) at any one (1) time.
(c) Parent shall not (i) make or hold any investment in any stocks,
bonds or securities of any kind in any Person which is not Borrower or a
Guarantor of Payment, (ii) make or keep outstanding any advance or loan to any
Person which is not Borrower or a Guarantor of Payment, or (iii) be or become a
Guarantor of any kind, except guaranties securing only Indebtedness of Borrower
and its Subsidiaries incurred or permitted pursuant to this Agreement; provided,
that this Section shall not apply to (A) any investments or loans of Parent
which do not exceed the aggregate amount, for all such investments and loans, of
Two Million Dollars ($2,000,000) at any one (1) time existing or outstanding, or
(B) the holding of any stock of any Sister Company.
SECTION 5.12. MERGER AND SALE OF ASSETS. Without the prior written
consent of Agents and the Majority Banks, no Company shall merge or consolidate
with any other Person or sell, lease or transfer or otherwise dispose of all or
a substantial part of its assets to any
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Person, except that if no Unmatured Event of Default or Event of Default shall
then exist or immediately thereafter shall begin to exist:
(a) any Subsidiary of Borrower may merge with (i) Borrower (provided
that Borrower shall be the continuing or surviving corporation), or (ii) one (1)
or more Guarantors of Payment, provided that either (A) the continuing or
surviving corporation shall be a Wholly-Owned Subsidiary which is a Guarantor of
Payment, or (B) after giving effect to any merger pursuant to this subclause
(ii), Borrower and/or one or more Wholly-Owned Subsidiaries which are Guarantors
of Payment shall own not less than the same percentage of the outstanding Voting
Stock of the continuing or surviving corporation as Borrower and/or one or more
Wholly-Owned Subsidiaries (which are Guarantors of Payment) owned of the merged
Subsidiary of Borrower immediately prior to such merger, or
(b) any Subsidiary of Borrower may sell, lease, transfer or otherwise
dispose of any of its assets to (i) Borrower, (ii) any Wholly-Owned Subsidiary
which is a Guarantor of Payment, or (iii) any Guarantor of Payment, of which
Borrower and/or one or more Wholly-Owned Subsidiaries, which are Guarantors of
Payment, shall own not less than the same percentage of Voting Stock as Borrower
and/or one or more Wholly-Owned Subsidiaries (which are Guarantors of Payment)
then own of the Subsidiary of Borrower making such sale, lease, transfer or
other disposition.
SECTION 5.13. ACQUISITIONS. Without the prior written consent of Agents
and the Majority Banks, Borrower and its Subsidiaries shall not acquire or
permit any Subsidiary of Borrower to acquire the assets or stock of any other
Person, except that Borrower, a Guarantor of Payment or a Subsidiary of Borrower
which will become a Guarantor of Payment on or before the day of the Acquisition
may acquire the stock or assets of another Person so long as: (a) Borrower, such
Guarantor of Payment or such Subsidiary, as applicable, is the surviving entity;
(b) the Companies are in full compliance with the Loan Documents both prior to
and subsequent to the transaction; and (c) Borrower shall provide to Agents and
the Banks, at least ten (10) days prior to such Acquisition, written notice of
such Acquisition, and, in addition, in the case of any Acquisition of a Person
for Consideration in excess of Five Million Dollars ($5,000,000), historical
financial statements of the target entity and a pro forma financial statement of
the Borrower and its Subsidiaries accompanied by a certificate of a Financial
Officer of Borrower showing pro forma compliance with Section 5.7 hereof, both
before and after the proposed Acquisition.
SECTION 5.14. NOTICE.
(a) Borrower shall cause a Financial Officer of Borrower to promptly
notify Agents and the Banks whenever any Unmatured Event of Default or Event of
Default may occur hereunder or any representation or warranty made in Article VI
hereof or elsewhere in this Agreement or in any Related Writing may for any
reason cease in any material respect to be true and complete; and
(b) Borrower shall provide notice to Agents and the Banks
contemporaneously with any notice provided to the trustee or the Senior
Subordinated Noteholders under the Indenture or the Senior Subordinated Notes.
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SECTION 5.15. ENVIRONMENTAL COMPLIANCE. Each Company shall comply in
all material respects with any and all Environmental Laws including, without
limitation, all Environmental Laws in jurisdictions in which any Company owns or
operates a facility or site, arranges for disposal or treatment of hazardous
substances, solid waste or other wastes, accepts for transport any hazardous
substances, solid waste or other wastes or holds any interest in real property
or otherwise. Borrower shall furnish to the Banks, promptly after receipt
thereof, a copy of any notice any Company may receive from any governmental
authority, private person or entity or otherwise that any material litigation or
proceeding pertaining to any environmental, health or safety matter has been
filed or is threatened against such Company, any real property in which such
Company holds any interest or any past or present operation of such Company. No
Company shall allow the release or disposal of hazardous waste, solid waste or
other wastes on, under or to any real property in which any Company holds any
interest or performs any of its operations, in violation of any Environmental
Law. As used in this Section, "litigation or proceeding" means any demand,
claim, notice, suit, suit in equity action, administrative action, investigation
or inquiry whether brought by any governmental authority, private person or
entity or otherwise. Borrower shall defend, indemnify and hold Agents and the
Banks harmless against all costs, expenses, claims, damages, penalties and
liabilities of every kind or nature whatsoever (including attorneys fees)
arising out of or resulting from the noncompliance of any Company with any
Environmental Law.
SECTION 5.16. AFFILIATE TRANSACTIONS. Except as set forth on SCHEDULE
5.16 attached hereto, no Company shall, directly or indirectly, enter into or
permit to exist any transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any Affiliate of such Company on terms that are less favorable to such Company
than those that might be obtained at the time in a transaction with a
non-Affiliate; provided, however, that the foregoing shall not prohibit the
payment of (a) customary and reasonable directors' fees to directors who are not
employees of a Company or any Affiliate of a Company, or (b) any transaction
between a Borrower and an Affiliate (if a Guarantor of Payment) which Borrower
reasonably determines in good faith is beneficial to Borrower and its Affiliates
as a whole and which is not entered into for the purpose of hindering the
exercise by Agents or the Banks of their rights or remedies under this
Agreement. For purposes of this provision, "Affiliate" shall mean any person or
entity, directly or indirectly, controlling, controlled by or under common
control with a Company and "control" (including the correlative meanings, the
terms "controlling", "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Company, whether through the
ownership of voting securities, by contract or otherwise.
SECTION 5.17. CORPORATE NAMES. No Company shall change its corporate
name, unless, in each case, such Company shall provide Agents with at least
thirty (30) days prior written notice thereof.
SECTION 5.18. SUBSIDIARY GUARANTIES. Each Subsidiary or other affiliate
of Borrower and its Subsidiaries, created, acquired or held subsequent to the
Closing Date, shall immediately execute and deliver to Administrative Agent a
Guaranty of Payment, such agreement to be in form and substance acceptable to
Agents and the Majority Banks, along with such corporate
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governance and authorization documents and an opinion of counsel as may be
deemed necessary or advisable by Agents; provided, however, that (a) a
Subsidiary shall not be required to execute such Guaranty of Payment so long as
(i) the total assets of such Subsidiary are less than the amount of One Million
Dollars ($1,000,000), and (ii) the aggregate of the total assets of all of such
Subsidiaries with total asset values of less than One Million Dollars
($1,000,000) does not exceed the aggregate amount of Two Million Dollars
($2,000,000), and (b) a Subsidiary organized outside of the United States shall
not be required to execute a Guaranty of Payment to the extent that such
Guaranty of Payment will result in adverse tax consequences for Borrower. In the
event that the total assets of any Subsidiary which is not a Guarantor of
Payment are at any time equal to or greater than One Million Dollars
($1,000,000), Borrower shall provide Agents and the Banks with prompt written
notice of such asset value.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that the statements set forth in this
Article VI are true, correct and complete.
SECTION 6.1. CORPORATE EXISTENCE; SUBSIDIARIES; FOREIGN QUALIFICATION.
Each Company is a corporation duly organized, validly existing, and in good
standing under the laws of its state of incorporation and is duly qualified and
authorized to do business and is in good standing as a foreign corporation in
the jurisdictions set forth opposite its name on SCHEDULE 6.1 hereof, which are
all of the states or jurisdictions where the character of its property or its
business activities makes such qualification necessary, except where the failure
to so qualify will not cause or result in a material adverse effect to the
business, operations or condition (financial or otherwise) of such Company.
SCHEDULE 6.1 hereof sets forth each Subsidiary of Borrower, its state of
incorporation, the location of its chief executive offices and its principal
place of business. Except as provided on Schedule 6.1, Borrower owns all of the
capital stock of each of its Subsidiaries.
SECTION 6.2. CORPORATE AUTHORITY. Each Company has the right and power
and is duly authorized and empowered to enter into, execute, deliver the Loan
Documents to which it is a party and to perform and observe the provisions of
the Loan Documents. The Loan Documents to which each Company is a party have
been duly authorized and approved by such Company's Board of Directors and are
the valid and binding obligations of such Company, enforceable against such
Company in accordance with their respective terms. The execution, delivery and
performance of the Loan Documents will not conflict with nor result in any
breach in any of the provisions of, or constitute a default under, or result in
the creation of any Lien (other than Liens permitted under Section 5.9 of this
Agreement) upon any assets or property of the Companies under the provisions of
the Articles (or Certificate) of Incorporation, Bylaws or Regulations or any
agreement of the Companies.
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SECTION 6.3. COMPLIANCE WITH LAWS. Each Company:
(a) holds permits, certificates, licenses, orders, registrations,
franchises, authorizations, and other approvals from federal, state, local, and
foreign governmental and regulatory bodies necessary for the conduct of its
business and is in material compliance with all applicable laws relating
thereto;
(b) is in material compliance with all federal, state, local, or
foreign applicable statutes, rules, regulations, and orders including, without
limitation, those relating to environmental protection, occupational safety and
health, and equal employment practices; and
(c) is not in violation of or in default under any material agreement
to which it is a party or by which its assets are subject or bound.
SECTION 6.4. LITIGATION AND ADMINISTRATIVE PROCEEDINGS. Except as
disclosed on SCHEDULE 6.4 attached hereto, there are (a) no lawsuits, actions,
investigations, or other proceedings pending or threatened against Borrower or
any of its Subsidiaries, or in respect of which Borrower or any of its
Subsidiaries may have any liability, in any court or before any governmental
authority, arbitration board, or other tribunal, (b) no orders, writs,
injunctions, judgments, or decrees of any court or government agency or
instrumentality to which any Company is a party or by which the property or
assets of any Company are bound and (c) no grievances, disputes, or
controversies outstanding with any union or other organization of the employees
of any Company, or threats of work stoppage, strike, or pending demands for
collective bargaining, which as to subsections (a), (b) and (c) hereof, if
violated or determined adversely, would have or would be reasonably expected to
have a material adverse effect on the business, property or operations
(financial or otherwise) of any Company,
SECTION 6.5. TITLE TO ASSETS. Each Company has good title to and
ownership of all property it purports to own, which property is free and clear
of all Liens, except those permitted under Section 5.9 hereto.
SECTION 6.6. LIENS AND SECURITY INTERESTS. Except for Liens permitted
pursuant to Section 5.9 hereof, (a) there is no financing statement outstanding
covering any personal property of any Company; (b) there is no mortgage
outstanding covering any real property of any Company; and (c) no real or
personal property of any Company is subject to any security interest or Lien of
any kind. No Company has entered into any contract or agreement which would
prohibit Agents and the Banks from acquiring a security interest, mortgage or
other Lien on, or a collateral assignment of, any of the property or assets of
any Company.
SECTION 6.7. TAX RETURNS. All federal, state and local tax returns and
other reports required by law to be filed in respect of the income, business,
properties and employees of Borrower have been filed and all taxes, assessments,
fees and other governmental charges which are due and payable have been paid,
except as otherwise permitted herein or the failure to do so does not and will
not cause or result in a material adverse effect on the business, operations or
condition
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(financial or otherwise) of Borrower and its Subsidiaries, on a Consolidated
basis. The provision for taxes on the books of Borrower is adequate for all
years not closed by applicable statutes and for the current fiscal year.
SECTION 6.8. ENVIRONMENTAL LAWS. Each Company is in material compliance
with any and all Environmental Laws including, without limitation, all
Environmental Laws in all jurisdictions in which any Company owns or operates,
or has owned or operated, a facility or site, arranges or has arranged for
disposal or treatment of hazardous substances, solid waste or other wastes,
accepts or has accepted for transport any hazardous substances, solid waste or
other wastes or holds or has held any interest in real property or otherwise.
Except as disclosed in SCHEDULE 6.4 hereof, no litigation or proceeding arising
under, relating to or in connection with any Environmental Law is pending or, to
the best of their knowledge, threatened against any Company, any real property
in which any Company holds or has held an interest or any past or present
operation of any Company. No release, threatened release or disposal of
hazardous waste, solid waste or other wastes is occurring, and no material
release, threatened release or disposal of hazardous waste, solid waste or other
wastes has occurred (other than those that are currently being cleaned up in
accordance with Environmental Laws), on, under or to any real property in which
any Company holds any interest or performs any of its operations, in violation
of any Environmental Law. As used in this Section, "litigation or proceeding"
means any demand, claim, notice, suit, suit in equity, action, administrative
action, investigation or inquiry whether brought by any governmental authority,
private person or entity or otherwise.
SECTION 6.9. EMPLOYEE BENEFITS PLANS. No ERISA Event has occurred or is
expected to occur with respect to an ERISA Plan. Full payment has been made of
all amounts which a Controlled Group member is required, under applicable law or
under the governing documents, to have been paid as a contribution to or a
benefit under each ERISA Plan. The liability of each Controlled Group member
with respect to each ERISA Plan has been fully funded based upon reasonable and
proper actuarial assumptions, has been fully insured, or has been fully reserved
for on its financial statements. No changes have occurred or are expected to
occur that would cause a material increase in the cost of providing benefits
under the ERISA Plan. With respect to each ERISA Plan that is intended to be
qualified under Code Section 401(a): (a) the ERISA Plan and any associated trust
operationally comply with the applicable requirements of Code Section 401(a),
(b) the ERISA Plan and any associated trust have been amended to comply with all
such requirements as currently in effect, other than those requirements for
which a retroactive amendment can be made within the "remedial amendment period"
available under Code Section 401(b) (as extended under Treasury Regulations and
other Treasury pronouncements upon which taxpayers may rely), (c) the ERISA Plan
and any associated trust have received a favorable determination letter from the
Internal Revenue Service stating that the ERISA Plan qualifies under Code
Section 401(a), that the associated trust qualifies under Code Section 501(a)
and, if applicable, that any cash or deferred arrangement under the ERISA Plan
qualifies under Code Section 401(k), unless the ERISA Plan was first adopted at
a time for which the above-described "remedial amendment period" has not yet
expired, (d) the ERISA Plan currently satisfies the requirements of Code Section
410(b), without regard to any retroactive amendment that may be made within the
above-described "remedial amendment period", and (e) no contribution made to the
ERISA Plan is subject to an excise tax
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under Code Section 4972. With respect to any Pension Plan, the "accumulated
benefit obligation" of Controlled Group members with respect to the Pension Plan
(as determined in accordance with Statement of Accounting Standards No. 87,
"Employers' Accounting for Pensions") does not exceed the fair market value of
Pension Plan assets. The aggregate potential amount of liability that would
result if all Controlled Group members withdrew from all Multiemployer Plans in
a "complete withdrawal" (within the meaning of ERISA Section 4203) is not
material.
SECTION 6.10. CONSENTS OR APPROVALS. Except as to the Banks, no
consent, approval or authorization of, or filing, registration or qualification
with, any governmental authority or any other Person is required to be obtained
or completed by Borrower in connection with the execution, delivery or
performance of any of the Loan Documents, which has not already been obtained or
completed.
SECTION 6.11. SOLVENCY. Borrower has received consideration which is
the reasonable equivalent value of the obligations and liabilities that Borrower
has incurred to the Banks. Borrower is not insolvent as defined in any
applicable state or federal statute, nor will Borrower be rendered insolvent by
the execution and delivery of the Loan Documents to Agents and the Banks.
Borrower is not engaged or about to engage in any business or transaction for
which the assets retained by it are or will be an unreasonably small amount of
capital, taking into consideration the obligations to Agents and the Banks
incurred hereunder. Borrower does not intend to, nor does it believe that it
will, incur debts beyond its ability to pay them as they mature.
SECTION 6.12. FINANCIAL STATEMENTS. The audited Consolidated financial
statements of the Companies for the fiscal year ended December 31, 1996 and the
unaudited financial statements of the Companies for the fiscal quarter ended
September 30, 1997, furnished to Agents and the Banks, are true and complete,
have been prepared in accordance with GAAP, and fairly present the Companies'
financial condition as of the date of such financial statements and the results
of their operations for the period then ending, subject, in case of such
unaudited interim statements, to changes from audit and year-end adjustments.
Since the dates of such statements, there has been no material adverse change in
any Company's financial condition, properties or business nor any change in any
Company's accounting procedures.
SECTION 6.13. REGULATIONS. Borrower is not engaged principally or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any "margin stock" (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System of the
United States of America). Neither the granting of any Loans (or any conversion
thereof) nor the use of the proceeds of the Loans will violate, or be
inconsistent with, the provisions of Regulation U or X of said Board of
Governors.
SECTION 6.14. MATERIAL AGREEMENTS. Except as disclosed on SCHEDULE 6.14
attached hereto, neither Borrower nor any of its Subsidiaries is a party to any
(a) debt instrument; (b) lease (capital, operating or otherwise), whether as
lessee or lessor thereunder; (c) contract, commitment, agreement, or other
arrangement involving the purchase or sale of any inventory by it, or the
license of any right to or by it; (d) contract, commitment, agreement, or other
arrangement
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with any of its "Affiliates" (as such term is defined in the Securities Exchange
Act of 1934, as amended); (e) management or employment contract or contract for
personal services with any of its Affiliates which is not otherwise terminable
at will or on less than ninety (90) days' notice without liability; (f)
collective bargaining agreement; or (g) other contract, agreement,
understanding, or arrangement, which, as to subsections (a) through (g), above,
has been violated, breached, or terminated and which violation, breach or
termination has had or would be reasonably expected to have a material adverse
effect on the business, operation or condition (financial or otherwise) of
Borrower and its Subsidiaries on a Consolidated basis.
SECTION 6.15. INTELLECTUAL PROPERTY. Each Company owns, possesses, or
has the right to use all the patents, patent applications, trademarks, service
marks, copyrights, licenses, and rights with respect to the foregoing necessary
for the conduct of its business without any known conflict with the rights of
others.
SECTION 6.16. INSURANCE. Each Company maintains with financially sound
and reputable insurers insurance with coverage and limits as required by law and
as is customary with persons engaged in the same businesses as the Companies.
SECTION 6.17. ACCURATE AND COMPLETE STATEMENTS. Neither the Loan
Documents nor any written statement made by any Company in connection with any
of the Loan Documents contains any untrue statement of a material fact or omits
a material fact necessary to make the statements contained therein or in the
Loan Documents not misleading.
SECTION 6.18. INDENTURE. (a) No Event of Default (as defined in the
Indenture) or Default (as defined in the Indenture) exists, nor will any such
Event of Default or Default exist immediately after the granting of any Loan,
under the Indenture, the Senior Subordinated Notes or any agreement executed by
Borrower in connection therewith; (b) no Company has incurred (as defined in the
Indenture) any Designated Senior Indebtedness (as defined in the Indenture)
other than the Debt; (c) the Debt constitutes Permitted Indebtedness (as defined
in the Indenture); and (d) no Company has "incurred" (as defined in the
Indenture) either prior to or after the granting of any Loan, any Indebtedness
(as defined in the Indenture) in violation of Section 4.06 (Limitation on
Additional Indebtedness) of the Indenture.
SECTION 6.19. DEFAULTS. No Unmatured Event of Default or Event of
Default exists hereunder, nor will any begin to exist immediately after the
execution and delivery hereof.
ARTICLE VII. EVENTS OF DEFAULT
Each of the following shall constitute an Event of Default hereunder:
SECTION 7.1. PAYMENTS. If the principal of or interest on any Note or
any commitment or other fee shall not be paid in full punctually when due and
payable and shall remain unpaid for a period of five (5) consecutive Business
Days.
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SECTION 7.2. SPECIAL COVENANTS. If any Company or any Obligor shall
fail or omit to perform and observe Sections 5.7 or 5.12 hereof.
SECTION 7.3. OTHER COVENANTS. If any Company or any Obligor shall fail
or omit to perform and observe any agreement or other provision (other than
those referred to in Sections 7.1 or 7.2 hereof) contained or referred to in
this Agreement or any Related Writing that is on such Company's or Obligor's
part, as the case may be, to be complied with, and that Unmatured Event of
Default shall not have been fully corrected within thirty (30) days after the
giving of written notice thereof to Borrower by Administrative Agent, Co-Agent
or any Bank that the specified Unmatured Event of Default is to be remedied.
SECTION 7.4. REPRESENTATIONS AND WARRANTIES. If any representation,
warranty or statement made in or pursuant to this Agreement or any Related
Writing or any other material information furnished by any Company or any
Obligor to the Banks or any thereof or any other holder of any Note, shall be
false or erroneous in any material respect; provided, however, that with respect
to Sections 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.13, 6.14, 6.15 and 6.16 hereof,
such inaccuracy shall not constitute an Event of Default if it is corrected
within thirty (30) days after the giving of written notice thereof to Borrower
by Administrative Agent or Co-Agent that the specified Unmatured Event of
Default is to be remedied.
SECTION 7.5. CROSS DEFAULT. If any Company or any Obligor shall default
in the payment of principal or interest due and owing upon any other obligation
for borrowed money in excess of the aggregate, for all such obligations, of Five
Hundred Thousand Dollars ($500,000) beyond any period of grace provided with
respect thereto or in the performance or observance of any other agreement, term
or condition contained in any agreement under which such obligation is created,
if the effect of such default is to allow the acceleration of the maturity of
such indebtedness or to permit the holder thereof to cause such indebtedness to
become due prior to its stated maturity.
SECTION 7.6. ERISA DEFAULT. The occurrence of one or more ERISA Events
which (a) the Majority Banks determine could have a material adverse effect on
the financial condition of the Companies when taken as a whole, or (b) results
in a Lien on any of the assets of any Company in excess, for all such Liens of
Five Hundred Thousand Dollars ($500,000).
SECTION 7.7. CHANGE IN MANAGEMENT/CONTROL. If (a) any Change of Control
shall occur, (b) Xxxxxx X. Xxxxxxxx or his immediate family shall cease to own
or control, directly or indirectly, at least twenty percent (20%) of the voting
stock of Borrower, or (c) either (i) Xxxxxx X. Xxxxxxxx shall cease to perform
his role as chief executive officer of Borrower, or (ii) Xxxxxx X. Xxxxxxxx
shall die or become incompetent and, within one hundred eighty (180) days
thereafter, Borrower shall not have selected a replacement Chief Executive
Officer with the expertise and management skills, in the sole opinion of the
Majority Banks, necessary for the successful management of the Companies.
SECTION 7.8. MONEY JUDGMENT. A final judgment or order for the payment
of money shall be rendered against any Company or any Obligor by a court of
competent
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jurisdiction, which remains unpaid or unstayed and undischarged for a period
(during which execution shall not be effectively stayed) of thirty (30) days
after the date on which the right to appeal has expired, provided that the
aggregate of all such judgments shall exceed Five Hundred Thousand Dollars
($500,000).
SECTION 7.9. DESIGNATED SENIOR INDEBTEDNESS/ PERMITTED INDEBTEDNESS.
If (a) any Company shall incur or permit to exist any Designated Senior
Indebtedness (as defined in the Indenture) other than the Debt, or (b) the Debt
shall cease to be Permitted Indebtedness (as defined in the Indenture).
SECTION 7.10. INDENTURE. If (a) any Event of Default (as defined in the
Indenture), or any event or condition which with the lapse of time or giving of
notice or both would constitute an Event of Default (as defined in the
Indenture), shall exist under the Indenture, the Senior Subordinated Notes or
any agreement executed by Borrower in connection therewith, (b) without the
prior written consent of Agents and the Majority Banks, the Indenture or the
Senior Subordinated Notes shall be amended or modified in any respect, or (c)
the Senior Subordinated Notes shall be accelerated for any reason.
SECTION 7.11. SOLVENCY. If any Company or any Obligor shall (a)
discontinue business, (b) generally not pay its debts as such debts become due,
(c) make a general assignment for the benefit of creditors, (d) apply for or
consent to the appointment of a receiver, a custodian, a trustee, an interim
trustee or liquidator of all or a substantial part of its assets, (e) be
adjudicated a debtor or have entered against it an order for relief under Title
11 of the United States Code, as the same may be amended from time to time, (f)
file a voluntary petition in bankruptcy or file a petition or an answer seeking
reorganization or an arrangement with creditors or seeking to take advantage of
any other law (whether federal or state) relating to relief of debtors, or admit
(by answer, by default or otherwise) the material allegations of a petition
filed against it in any bankruptcy, reorganization, insolvency or other
proceeding (whether federal or state) relating to relief of debtors, (g) suffer
or permit to continue unstayed and in effect for thirty (30) consecutive days
any judgment, decree or order entered by a court of competent jurisdiction,
which approves a petition seeking its reorganization or appoints a receiver,
custodian, trustee, interim trustee or liquidator of all or a substantial part
of its assets, or (h) take, or omit to take, any action in order thereby to
effect any of the foregoing.
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ARTICLE VIII. REMEDIES UPON DEFAULT
Notwithstanding any contrary provision or inference herein or
elsewhere,
SECTION 8.1. OPTIONAL DEFAULTS. If any Event of Default referred to in
Section 7.1, 7.2., 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9 or 7.10 hereof shall occur,
the Majority Banks shall have the right in their discretion, by directing
Administrative Agent, on behalf of the Banks, to give written notice to
Borrower, to:
(a) terminate the Commitment and the credits hereby established, if not
theretofore terminated, and, immediately upon such election, the obligations of
the Banks, and each thereof, to make any further Loan or Loans hereunder
immediately shall be terminated, and/or
(b) accelerate the maturity of all of the Debt (if it be not already
due and payable), whereupon all of the Debt shall become and thereafter be
immediately due and payable in full without any presentment or demand and
without any further or other notice of any kind, all of which are hereby waived
by Borrower.
SECTION 8.2. AUTOMATIC DEFAULTS. If any Event of Default referred to in
Section 7.11 hereof shall occur:
(a) all of the Commitment and the credits hereby established shall
automatically and immediately terminate, if not theretofore terminated, and no
Bank thereafter shall be under any obligation to grant any further Loan or Loans
hereunder, and
(b) the principal of and interest on any Notes then outstanding, and
all of the Debt to the Banks, shall thereupon become and thereafter be
immediately due and payable in full (if it be not already due and payable), all
without any presentment, demand or notice of any kind, which are hereby waived
by Borrower.
SECTION 8.3. OFFSETS. If there shall occur or exist any Event of
Default referred to in Section 7.11 hereof or if the maturity of the Notes is
accelerated pursuant to Section 8.1 or 8.2 hereof, each Bank shall have the
right at any time to set off against, and to appropriate and apply toward the
payment of, any and all Debt then owing by Borrower to that Bank (including,
without limitation, any participation purchased or to be purchased pursuant to
Section 8.4 hereof), whether or not the same shall then have matured, any and
all deposit balances and all other indebtedness then held or owing by that Bank
to or for the credit or account of Borrower, all without notice to or demand
upon Borrower or any other person, all such notices and demands being hereby
expressly waived by Borrower.
SECTION 8.4. EQUALIZATION PROVISION. Each Bank agrees with the other
Banks that if it, at any time, shall obtain any Advantage over the other Banks
or any thereof in respect of the Debt (except under Article III hereof), it
shall purchase from the other Banks, for cash and at par, such additional
participation in the Debt as shall be necessary to nullify the Advantage.
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If any such Advantage resulting in the purchase of an additional participation
as aforesaid shall be recovered in whole or in part from the Bank receiving the
Advantage, each such purchase shall be rescinded, and the purchase price
restored (but without interest unless the Bank receiving the Advantage is
required to pay interest on the Advantage to the person recovering the Advantage
from such Bank) ratably to the extent of the recovery. Each Bank further agrees
with the other Banks that if it at any time shall receive any payment for or on
behalf of Borrower on any indebtedness owing by Borrower to that Bank by reason
of offset of any deposit or other indebtedness, it will apply such payment first
to any and all indebtedness owing by Borrower to that Bank pursuant to this
Agreement (including, without limitation, any participation purchased or to be
purchased pursuant to this Section or any other Section of this Agreement).
Borrower agrees that any Bank so purchasing a participation from the other Banks
or any thereof pursuant to this Section may exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Bank was a direct creditor of Borrower in the amount of such
participation.
ARTICLE IX. THE AGENTS
The Banks authorize Administrative Agent and Co-Agent, and
Administrative Agent and Co- Agent hereby agree, to act as agents for the Banks
in respect of this Agreement upon the terms and conditions set forth elsewhere
in this Agreement, and upon the following terms and conditions:
SECTION 9.1. APPOINTMENT AND AUTHORIZATION. Each Bank hereby
irrevocably appoints and authorizes Administrative Agent and Co-Agent to take
such action as agent on its behalf and to exercise such powers hereunder as are
delegated to Agents by the terms hereof, together with such powers as are
reasonably incidental thereto. None of Administrative Agent, Co- Agent or any of
their respective directors, officers, attorneys or employees shall be liable for
any action taken or omitted to be taken by it or them hereunder or in connection
herewith, except for its or their own gross negligence or willful misconduct.
Except as set forth in this Agreement, neither Administrative Agent nor Co-Agent
shall have the ability to act on behalf of the other except with the express
consent of the other.
SECTION 9.2. NOTE HOLDERS. Agents may treat the payee of any Note as
the holder thereof until written notice of transfer shall have been filed with
it, signed by such payee and in form satisfactory to Agents.
SECTION 9.3. CONSULTATION WITH COUNSEL. Agents may consult with legal
counsel selected by it and shall not be liable for any action taken or suffered
in good faith by it in accordance with the opinion of such counsel.
SECTION 9.4. DOCUMENTS. Agents shall not be under any duty to examine
into or pass upon the validity, effectiveness, genuineness or value of any Loan
Documents or any other Related Writing furnished pursuant hereto or in
connection herewith or the value of any collateral obtained hereunder, and
Agents shall be entitled to assume that the same are valid, effective and
genuine and what they purport to be.
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SECTION 9.5. AGENTS AND AFFILIATES. With respect to the Loans, Agents
shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though they were not Agents, and Agents and their
respective affiliates may accept deposits from, lend money to and generally
engage in any kind of business with any Company or affiliate thereof.
SECTION 9.6. KNOWLEDGE OF DEFAULT. It is expressly understood and
agreed that Agents shall be entitled to assume that no Unmatured Event of
Default or Event of Default has occurred and is continuing, unless Agents has
been notified by a Bank in writing that such Bank believes that an Unmatured
Event of Default or Event of Default has occurred and is continuing and
specifying the nature thereof.
SECTION 9.7. ACTION BY AGENTS. So long as Agents shall be entitled,
pursuant to Section 9.6 hereof, to assume that no Unmatured Event of Default or
Event of Default shall have occurred and be continuing, Agents shall be entitled
to use their discretion with respect to exercising or refraining from exercising
any rights which may be vested in it by, or with respect to taking or refraining
from taking any action or actions which it may be able to take under or in
respect of, this Agreement. Agents shall incur no liability under or in respect
of this Agreement by acting upon any notice, certificate, warranty or other
paper or instrument believed by it to be genuine or authentic or to be signed by
the proper party or parties, or with respect to anything which it may do or
refrain from doing in the reasonable exercise of its judgment, or which may seem
to it to be necessary or desirable in the premises.
SECTION 9.8. NOTICES, DEFAULT, ETC. In the event that Agents shall have
acquired actual knowledge of any Unmatured Event of Default, Agents shall
promptly notify the Banks and shall take such action and assert such rights
under this Agreement as the Majority Banks shall direct and Agents shall inform
the other Banks in writing of the action taken. Agents may take such action and
assert such rights as it deems to be advisable, in its discretion, for the
protection of the interests of the holders of the Notes.
SECTION 9.9. INDEMNIFICATION OF AGENTS. The Banks agree to indemnify
Agents (to the extent not reimbursed by Borrower), ratably according to their
Commitment Percentages from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against Agents in their capacity as agent in any way relating to
or arising out of this Agreement or any Loan Document or any action taken or
omitted by Agents with respect to this Agreement or any Loan Document, provided
that no Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorney fees) or disbursements resulting from Agents' respective
gross negligence, willful misconduct or from any action taken or omitted by
Agents, or either thereof, in any capacity other than as agent under this
Agreement.
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SECTION 9.10. SUCCESSOR AGENT. Administrative Agent or Co-Agent may
resign as agent hereunder by giving not fewer than thirty (30) days' prior
written notice to Borrower and the Banks. If Administrative Agent or Co-Agent
shall resign under this Agreement, then whichever of Agents which shall not have
resigned shall fulfill the roles of both Administrative Agent and Co-Agent. If
both Agents shall resign under this Agreement, then (a) the Majority Banks shall
appoint from among the Banks a successor agent for the Banks (with the consent
of Borrower so long as an Event of Default has not occurred and which consent
shall not be unreasonably withheld or delayed), or (b) if a successor agent
shall not be so appointed and approved within the thirty (30) day period
following the notice to the Banks of the resignation, then Agents shall appoint
a successor agent (with the consent of Borrower so long as an Event of Default
has not occurred and which consent shall not be unreasonably withheld or
delayed) who shall serve as agent until such time as the Majority Banks appoint
a successor agent (with the consent of Borrower so long as an Event of Default
has not occurred and which consent shall not be unreasonably withheld or
delayed). Upon its appointment, such successor agent shall succeed to the
rights, powers and duties as agent, and the term "Administrative Agent",
"Co-Agent" and "Agents" shall mean such successor effective upon its
appointment, and any former agent's rights, powers and duties as agent shall be
terminated without any other or further act or deed on the part of such former
agent or agents or any of the parties to this Agreement.
ARTICLE X. MISCELLANEOUS
SECTION 10.1. BANKS' INDEPENDENT INVESTIGATION. Each Bank, by its
signature to this Agreement, acknowledges and agrees that neither Administrative
Agent nor Co- Agent has made any representations or warranties, express or
implied, with respect to the creditworthiness, financial condition, or any other
condition of any Company or with respect to the statements contained in any
information memorandum furnished in connection herewith or in any other oral or
written communication between Administrative Agent or Co-Agent, as the case may
be, and such Bank. Each Bank represents that it has made and shall continue to
make its own independent investigation of the creditworthiness, financial
condition and affairs of the Companies in connection with the extensions of
credit hereunder, and agrees that neither Administrative Agent nor Co-Agent have
any duty or responsibility, either initially or on a continuing basis, to
provide any Bank with any credit or other information with respect thereto
(other than such notices as may be expressly required to be given by
Administrative Agent or Co-Agent, or both, to the Banks hereunder), whether
coming into its possession before the granting of the first Loans hereunder or
at any time or times thereafter.
SECTION 10.2. NO WAIVER; CUMULATIVE REMEDIES. No omission or course of
dealing on the part of Agents, any Bank or the holder of any Note in exercising
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy hereunder. The remedies herein provided are cumulative and in addition
to any other rights, powers or privileges held by operation of law, by contract
or otherwise.
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SECTION 10.3. AMENDMENTS, CONSENTS. No amendment, modification,
termination, or waiver of any provision of any Loan Document nor consent to any
variance therefrom, shall be effective unless the same shall be in writing and
signed by the Majority Banks and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
Notwithstanding the foregoing provision to the contrary, the consent of the
holders of eighty-one percent (81%) of the amount of the Commitment, or, if
there is borrowing hereunder, the holders of eighty one percent (81%) of the
amount of the Notes, shall be required with respect to Section 5.7 hereof.
Furthermore, anything herein to the contrary notwithstanding, unanimous consent
of the Banks shall be required with respect to (a) any increase in the
Commitment hereunder, (b) the extension of maturity of the Notes, the payment
date of interest thereunder, or the payment of commitment or other fees or
amounts payable hereunder, (c) any reduction in the rate of interest on the
Notes, or in any amount of principal or interest due on any Note, or the payment
of commitment or other fees or amounts payable hereunder or any change in the
manner of pro rata application of any payments made by Borrower to the Banks
hereunder, (d) any change in any percentage voting requirement, voting rights,
or the Majority Banks definition in this Agreement, (e) the release of any
Guarantor of Payment, any collateral or any other security for the Debt (if
any), or (f) any amendment to this Section 10.3 or Section 8.4 hereof. Notice of
amendments or consents ratified by the Banks hereunder shall immediately be
forwarded by Borrower to all Banks. Each Bank or other holder of a Note shall be
bound by any amendment, waiver or consent obtained as authorized by this
Section, regardless of its failure to agree thereto.
SECTION 10.4. NOTICES. All notices, requests, demands and other
communications provided for hereunder shall be in writing and, if to Borrower,
mailed or delivered to it, addressed to it at the address specified on the
signature pages of this Agreement, if to a Bank, mailed or delivered to it,
addressed to the address of such Bank specified on the signature pages of this
Agreement, or, as to each party, at such other address as shall be designated by
such party in a written notice to each of the other parties. All notices,
statements, requests, demands and other communications provided for hereunder
shall be deemed to be given or made when delivered or forty-eight (48) hours
after being deposited in the mails with postage prepaid by registered or
certified mail, addressed as aforesaid, or sent by facsimile with telephonic
confirmation of receipt, except that all notices hereunder shall not be
effective until received.
SECTION 10.5. COSTS, EXPENSES AND TAXES. Borrower agrees to pay on
demand all other reasonable costs and expenses of the Banks and Agents,
including, but not limited to, (a) administration and out-of-pocket expenses of
Administrative Agent in connection with the administration of the Loan
Documents, the collection and disbursement of all funds hereunder and the other
instruments and documents to be delivered hereunder, (b) extraordinary expenses
of Agents and the Banks in connection with the administration of the Loan
Documents and the other instruments and documents to be delivered hereunder, (c)
the reasonable fees and out-of-pocket expenses of special counsel for the Banks,
with respect thereto and of local counsel, if any, who may be retained by said
special counsel with respect thereto, and (d) all costs and expenses, including
reasonable attorneys' fees, in connection with the restructuring or enforcement
of the Loan Documents or any Related Writing. Borrower also agrees to pay any
expenses of Administrative Agent incurred in connection with the preparation of
the Loan Documents and any Related Writings.
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In addition, Borrower shall pay any and all stamp and other taxes and fees
payable or determined to be payable in connection with the execution and
delivery of the Loan Documents, and the other instruments and documents to be
delivered hereunder, and agrees to hold Agent and each Bank harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes or fees.
SECTION 10.6. INDEMNIFICATION. Borrower agrees to defend, indemnify and
hold harmless Agents and the Banks from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorney fees) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent, Co-Agent or any Bank in connection with any investigative,
administrative or judicial proceeding (whether or not such Bank, Administrative
Agent or Co-Agent shall be designated a party thereto) or any other claim by any
person or entity relating to or arising out of this Agreement or any actual or
proposed use of proceeds of the Loans hereunder or any activities of any Company
or any Obligor or any of their affiliates; provided that no Bank, Administrative
Agent nor Co-Agent shall have the right to be indemnified under this Section for
its own gross negligence or willful misconduct as determined by a court of
competent jurisdiction. All obligations provided for in this Section 10.6 shall
survive any termination of this Agreement.
SECTION 10.7. CAPITAL ADEQUACY. To the extent not covered by Article
III hereof, if any Bank shall have determined, after the date hereof, that the
adoption of any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its lending office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Bank's capital (or the capital of its holding company) as
a consequence of its obligations hereunder to a level below that which such Bank
(or its holding company) could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies or the policies of
its holding company with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within fifteen (15) days after
demand by such Bank (with a copy to Administrative Agent), Borrower shall pay to
such Bank such additional amount or amounts as shall compensate such Bank (or
its holding company) for such reduction, provided that Borrower's obligation
under this Section 10.7 are limited to the parts of such reduction directly
related to the Loans. No Bank shall enforce this provision solely against
Borrower or against a few of such Bank's customers without in each case
generally enforcing these (or similar) provisions in other contracts (provided
that, anything herein to the contrary notwithstanding, (a) no Bank shall be
required to disclose to any Company the identity of or the nature of the Bank's
relationship with, any other of such Bank's customers and (b) a general written
statement of Bank regarding the satisfaction of this requirement shall be
satisfactory to Borrower). Each Bank shall designate a different lending office
if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate of any Bank claiming compensation
under this Section and setting forth the additional amount or amounts to be paid
to it hereunder shall be
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conclusive in the absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution methods. Failure on the
part of any Bank to demand compensation for any reduction in return on capital
with respect to any period shall not constitute a waiver of such Bank's rights
to demand compensation for any reduction in return on capital in such period or
in any other period. The protection of this Section shall be available to each
Bank regardless of any possible contention of the invalidity or inapplicability
of the law, regulation or other condition which shall have been imposed.
SECTION 10.8. OBLIGATIONS SEVERAL; NO FIDUCIARY OBLIGATIONS. The
obligations of the Banks hereunder are several and not joint. Nothing contained
in this Agreement and no action taken by Agents or the Banks pursuant hereto
shall be deemed to constitute the Banks a partnership, association, joint
venture or other entity. No default by any Bank hereunder shall excuse the other
Banks from any obligation under this Agreement; but no Bank shall have or
acquire any additional obligation of any kind by reason of such default. The
relationship among Borrower and the Banks with respect to the Loan Documents and
the Related Writings is and shall be solely that of debtor and creditors,
respectively, and Agents or any Bank shall not have any fiduciary obligation
toward Borrower with respect to any such documents or the transactions
contemplated thereby.
SECTION 10.9. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement.
SECTION 10.10. BINDING EFFECT; BORROWER'S ASSIGNMENT. This Agreement
shall become effective when it shall have been executed by Borrower, Agents and
by each Bank and thereafter shall be binding upon and inure to the benefit of
Borrower, Agents and each of the Banks and their respective successors and
assigns, except that Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of Agents and
all of the Banks.
SECTION 10.11. ASSIGNMENTS/PARTICIPATIONS.
A. Assignments of Commitment. Each Bank shall have the right at any
time or times to assign to another financial institution, without recourse, all
or a percentage of all of the following (a) that Bank's Commitment, (b) all
Loans made by that Bank, (c) that Bank's Notes, and (d) that Bank's interest in
any participation purchased pursuant to Section 8.4; provided, however, in each
such case, that the assignor and the assignee shall have complied with the
following requirements:
(i) Prior Consent. No assignment may be consummated pursuant to this
Section 10.11 without the prior written consent of Borrower and Agents (other
than an assignment by any Bank to any affiliate of such Bank), which consent of
Borrower and Agents shall not be unreasonably withheld; provided, however, that,
Borrower's consent shall not be required if, at the time of the
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proposed assignment any Unmatured Event of Default or Event of Default shall
have occurred. Anything herein to the contrary notwithstanding, any Bank may at
any time assign all or any portion of its rights under the Loan Documents to a
Federal Reserve Bank, and no such assignment shall release such assigning Bank
from its obligations hereunder;
(ii) Minimum Amount. Each such assignment shall be in a minimum amount
of the lesser of Ten Million Dollars ($10,000,000) of the assignor's Commitment
or the entire amount of the assignor's Commitment;
(iii) Assignment Fee; Assignment Agreement. Unless the assignment shall
be to an affiliate of the assignor or the assignment shall be due to merger of
the assignor or for regulatory purposes, the assignor shall (A) remit to
Administrative Agent, for its own account, an administrative fee of Three
Thousand Dollars ($3,000), (B) cause the assignee to execute and deliver to
Borrower and Administrative Agent an Assignment and Acceptance Agreement, in the
form of EXHIBIT C hereto (an "Assignment Agreement"), and (C) execute and
deliver, or cause the assignee to execute and deliver, as the case may be, to
Administrative Agent such additional amendments, assurances and other writings
as Administrative Agent may reasonably require;
(iv) Notes. Borrower shall execute and deliver (A) to Administrative
Agent, the assignor and the assignee, any consent or release (of all or a
portion of the obligations of the assignor) to be delivered in connection with
the Assignment Agreement, and (B) to the assignee, an appropriate Note or Notes.
After delivery of the new Note or Notes, the assignor's Note or Notes being
replaced shall be returned to Borrower marked "replaced"; and
(v) Non-U.S. Transferee. If the assignment is to be made to an assignee
which is organized under the laws of any jurisdiction other than the United
States or any state thereof, the assignor Bank shall cause such assignee, at
least five (5) Business Days prior to the effective date of such assignment, (A)
to represent to the transferor Bank (for the benefit of the assignor Bank,
Administrative Agent, Co-Agent and Borrower) that under applicable law and
treaties no taxes will be required to be withheld by Administrative Agent,
Co-Agent, Borrower or the assignor with respect to any payments to be made to
such assignee in respect of the Loans hereunder, (B) to furnish to the assignor
(and, in the case of any assignee registered in the Register, Administrative
Agent and Borrower) either (1) U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 or (2) United States Internal Revenue Service
Form W-8 or W-9, as applicable (wherein such assignee claims entitlement to
complete exemption from U.S. federal withholding tax on all interest payments
hereunder), and (C) to agree (for the benefit of the assignor, Administrative
Agent, Co-Agent and Borrower) to provide the assignor Bank (and, in the case of
any assignee registered in the Register, Administrative Agent and Borrower) a
new Form 4224 or Form 1001 or Form W-8 or W-9, as applicable, upon the
expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such transferee, and to comply from
time to time with all applicable U.S. laws and regulations with regard to such
withholding tax exemption.
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Upon satisfaction of the requirements of set forth in (i) through (v),
and any other condition contained in this Section 10.11A, (a) the assignee shall
become and thereafter be deemed to be a "Bank" for the purposes of this
Agreement, (b) the assignor shall cease to be and thereafter shall no longer be
deemed to be a "Bank" and (c) the signature pages hereto and Schedule 1 hereof
shall be automatically amended, without further action, to reflect the result of
any such transfer.
Administrative Agent shall maintain at its address referred to in
Section 10.4 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Banks and the Commitment of, and principal amount of the Loans owing to, each
Bank from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and Borrower, Agents and the Banks may treat each
financial institution whose name is recorded in the Register as the owner of the
Loan recorded therein for all purposes of this Agreement. The Register shall be
available for inspection by Borrower or any Bank at any reasonable time and from
time to time upon reasonable prior notice.
B. Sale of Participations. Each Bank shall have the right at any time
or times, without the consent of Agents or Borrower, to sell one or more
participations or sub-participations to a financial institution, as the case may
be, in all or any part of (a) that Bank's Commitment, (b) that Bank's Commitment
Percentage, (c) any Loan made by that Bank, (d) any Note delivered to that Bank
pursuant to this Agreement, and (e) that Bank's participations, if any,
purchased pursuant to Section 8.4 or this Section 10.11B.
(i) Benefits of Participant. The provisions of Article III and Section
10.7 shall inure to the benefit of each purchaser of a participation or
sub-participation and Administrative Agent shall continue to distribute payments
pursuant to this Agreement as if no participation has been sold.
(ii) Rights Reserved. In the event any Bank shall sell any
participation or sub- participation, that Bank shall, as between itself and the
purchaser, retain all of its rights (including, without limitation, rights to
enforce against Borrower the Loan Documents and the Related Writings) and duties
pursuant to the Loan Documents and the Related Writings, including, without
limitation, that Bank's right to approve any waiver, consent or amendment
pursuant to Section 10.3, except if and to the extent that any such waiver,
consent or amendment would:
(A) reduce any fee or commission allocated to the
participation or sub- participation, as the case may
be,
(B) reduce the amount of any principal payment on any
Loan allocated to the participation or
sub-participation, as the case may be, or reduce the
principal amount of any Loan so allocated or the rate
of interest payable thereon, or
(C) extend the time for payment of any amount allocated
to the participation or sub-participation, as the
case may be.
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(iii) No Delegation. No participation or sub-participation shall
operate as a delegation of any duty of the seller thereof. Under no circumstance
shall any participation or sub-participation be deemed a novation in respect of
all or any part of the seller's obligations pursuant to this Agreement.
SECTION 10.12. SEVERABILITY OF PROVISIONS; CAPTIONS; ATTACHMENTS. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction. The several captions to Sections and subsections
herein are inserted for convenience only and shall be ignored in interpreting
the provisions of this Agreement. Each schedule or exhibit attached to this
Agreement shall be deemed to be a part hereof.
SECTION 10.13. INVESTMENT PURPOSE. Each of the Banks represents and
warrants to Borrower that it is entering into this Agreement with the present
intention of acquiring any Note issued pursuant hereto for investment purposes
only and not for the purpose of distribution or resale, it being understood,
however, that each Bank shall at all times retain full control over the
disposition of its assets.
SECTION 10.14. ENTIRE AGREEMENT. This Agreement, any Note and any other
agreement, document or instrument attached hereto or referred to herein or
executed on or as of the date hereof integrate all the terms and conditions
mentioned herein or incidental hereto and supersede all oral representations and
negotiations and prior writings with respect to the subject matter hereof. This
Agreement is intended to, and Borrower, Agents and the Banks agree that this
Agreement shall, (a) constitute "New Credit Facility" (as defined in the
Indenture), and (b) be a replacement of the Credit Agreement dated as of April
11, 1995, as amended, among Borrower, KeyBank National Association (successor by
merger to Society National Bank), as Agent, and the banking institutions listed
on Annex 1 attached thereto.
SECTION 10.15. GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement, each of the Notes and any Related Writing shall be governed by and
construed in accordance with the laws of the State of Ohio and the respective
rights and obligations of Borrower and the Banks shall be governed by Ohio law,
without regard to principles of conflict of laws. Borrower hereby irrevocably
submits to the non-exclusive jurisdiction of any Ohio state or federal court
sitting in Cleveland, Ohio, over any action or proceeding arising out of or
relating to this Agreement, any Loan Document or any Related Writing, and
Borrower hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such Ohio state or federal court.
Borrower, on behalf of itself and its Subsidiaries, hereby irrevocably waives,
to the fullest extent permitted by law, any objection it may now or hereafter
have to the laying of venue in any action or proceeding in any such court as
well as any right it may now or hereafter have to remove such action or
proceeding, once commenced, to another court on the grounds of FORUM NON
CONVENIENS or otherwise. Borrower agrees that a final, nonappealable 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.
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SECTION 10.16. JURY TRIAL WAIVER. BORROWER, AGENTS AND EACH OF THE
BANKS WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENTS AND THE
BANKS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO. THIS
WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY AGENTS' OR ANY
BANK'S ABILITY TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR
COGNOVIT PROVISION CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT AMONG BORROWER, AGENTS AND THE BANKS, OR ANY THEREOF.
Address: 00000 Xxxxxx Xxxxxx PARK-OHIO INDUSTRIES, INC.
Xxxxxx, Xxxx 00000
Attention: Corporate Secretary By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Xxxxx X. Xxxxxx, Vice President
and /s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx, Secretary
Address: Key Center KEYBANK NATIONAL ASSOCIATION,
000 Xxxxxx Xxxxxx as a Bank and as Administrative Agent
Xxxxxxxxx, Xxxx 00000-0000
Attention: Commercial Loans- By: /s/ Xxxxxxx X. Xxxxxx
Cleveland District ---------------------------------
Xxxxxxx X. Xxxxxx, Vice President
Address: Huntington Building THE HUNTINGTON NATIONAL BANK
000 Xxxxxx Xxxxxx as a Bank and as Co-Agent
Xxxxxxxxx, Xxxx 00000
Attention: Commercial By: /s/ Xxxxxxx X. Xxxxxxxx
Banking Division ----------------------------------
Xxxxxxx X. Xxxxxxxx, Senior Vice President
Address: 000 Xxxxxx Xxxxxx XXXXXX XXXX, N.A.
00xx Xxxxx
Xxxxxxxxx, XX 00000-0000 By: /s/ Xxxxx X. Xxxxx
Attn: Corporate Banking Div. ---------------------------------
Xxxxx X. Xxxxx, Vice President
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