EXHIBIT 10.3
EXECUTION COPY
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ALLIANCE LAUNDRY HOLDINGS LLC
ALLIANCE LAUNDRY SYSTEMS LLC
-------------------------------------------------
$275,000,000
CREDIT AGREEMENT
May 5, 1998
-------------------------------------------------
XXXXXX BROTHERS INC.
as Arranger
XXXXXX COMMERCIAL PAPER INC.
as Syndication Agent
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Administrative Agent
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. DEFINITIONS 2
1.1 Defined Terms 2
1.2 Other Definitional Provisions 29
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 29
2.1 Term Loan Commitments 29
2.2 Procedure for Term Loan Borrowing 30
2.3 Repayment of Term Loans 30
2.4 Revolving Credit Commitments 30
2.5 Procedure for Revolving Credit Borrowing 31
2.6 Swing Line Commitment 31
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans 32
2.8 Repayment of Loans; Evidence of Debt 33
2.9 Commitment Fees, etc. 34
2.10 Termination or Reduction of Revolving Credit Commitments 34
2.11 Optional Prepayments 34
2.12 Mandatory Prepayments and Commitment Reductions 35
2.13 Conversion and Continuation Options 36
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches 37
2.15 Interest Rates and Payment Dates 37
2.16 Computation of Interest and Fees 38
2.17 Inability to Determine Interest Rate 38
2.18 Pro Rata Treatment and Payments 39
2.19 Requirements of Law 41
2.20 Taxes 42
2.21 Indemnity 44
2.22 Illegality 44
2.23 Change of Lending Office 44
2.24 Replacement of Lenders under Certain Circumstances 45
SECTION 3. LETTERS OF CREDIT 45
3.1 L/C Commitment 45
3.2 Procedure for Issuance of Letter of Credit 46
3.3 Fees and Other Charges 47
3.4 L/C Participations 47
3.5 Reimbursement Obligation of the Borrower 48
3.6 Obligations Absolute 49
3.7 Letter of Credit Payments 50
3.8 Applications 00
-x-
XXXXXXX 0. REPRESENTATIONS AND WARRANTIES 50
4.1 Financial Condition 50
4.2 No Change 51
4.3 Existence; Compliance with Law 51
4.4 Power; Authorization; Enforceable Obligations 51
4.5 No Legal Bar 52
4.6 No Material Litigation 52
4.7 No Default 52
4.8 Ownership of Property; Liens 52
4.9 Intellectual Property 52
4.10 Taxes 53
4.11 Federal Regulations 53
4.12 Labor Matters 53
4.13 ERISA 53
4.14 Investment Company Act; Other Regulations 54
4.15 Subsidiaries 54
4.16 Use of Proceeds 54
4.17 Environmental Matters 54
4.18 Accuracy of Information, etc 55
4.19 Security Documents 56
4.20 Solvency 56
4.21 Senior Indebtedness 56
4.22 Regulation H 56
4.23 Year 2000 Compliance 56
SECTION 5. CONDITIONS PRECEDENT 57
5.1 Conditions to Initial Extension of Credit 57
5.2 Conditions to Each Extension of Credit 61
SECTION 6. AFFIRMATIVE COVENANTS 62
6.1 Financial Statements 62
6.2 Certificates; Other Information 63
6.3 Payment of Obligations 64
6.4 Conduct of Business and Maintenance of Existence, etc. 65
6.5 Maintenance of Property; Insurance 65
6.6 Inspection of Property; Books and Records; Discussions 65
6.7 Notices 65
6.8 Environmental Laws 66
6.9 Interest Rate Protection 66
6.10 Additional Collateral, etc 66
6.11 Further Assurances 68
SECTION 7. NEGATIVE COVENANTS 68
7.1 Financial Condition Covenants 68
7.2 Limitation on Indebtedness 70
7.3 Limitation on Liens 73
-ii-
7.4 Limitation on Fundamental Changes 76
7.5 Limitation on Disposition of Property 76
7.6 Limitation on Restricted Payments 78
7.7 Limitation on Capital Expenditures 80
7.8 Limitation on Investments 80
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments 82
7.10 Limitation on Transactions with Affiliates 83
7.11 Limitation on Sales and Leasebacks 84
7.12 Limitation on Changes in Fiscal Periods 84
7.13 Limitation on Negative Pledge Clauses 84
7.14 Limitation on Restrictions on Subsidiary Distributions 85
7.15 Limitation on Lines of Business 85
7.16 Limitation on Amendments to Recapitalization Documents 85
7.17 Limitation on Activities of Holdings and Alliance Laundry
Corporation 85
SECTION 8. EVENTS OF DEFAULT 86
SECTION 9. THE AGENTS 90
9.1 Appointment 90
9.2 Delegation of Duties 90
9.3 Exculpatory Provisions 90
9.4 Reliance by the Agents 91
9.5 Notice of Default 91
9.6 Non-Reliance on Agents and Other Lenders 91
9.7 Indemnification 92
9.8 Agent in Its Individual Capacity 92
9.9 Successor Administrative Agent 93
9.10 Authorization to Release Liens 93
9.11 The Arranger 93
SECTION 10. MISCELLANEOUS 93
10.1 Amendments and Waivers 93
10.2 Notices 94
10.3 No Waiver; Cumulative Remedies 96
10.4 Survival of Representations and Warranties 96
10.5 Payment of Expenses 96
10.6 Successors and Assigns; Participations and Assignments 97
10.7 Adjustments; Set-off 99
10.8 Counterparts 100
10.9 Severability 100
10.10 Integration 100
10.11 GOVERNING LAW 100
10.12 Submission To Jurisdiction; Waivers 100
10.13 Acknowledgements 101
10.14 Confidentiality 101
10.15 Enforceability; Usury 102
10.16 WAIVERS OF JURY TRIAL 102
-iii-
ANNEXES:
A Pricing Grid
SCHEDULES:
1.1A Commitments
1.1B Mortgaged Property
4.1(b) Undisclosed Liabilities
4.4 Consents, Authorizations, Filings and Notices
4.6 Material Litigation
4.15 Subsidiaries
4.17 Environmental Matters
4.19(a) UCC Filing Jurisdictions
4.19(b) Mortgage Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.8 Existing Investments
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F Form of Legal Opinion of Xxxxxxxx & Xxxxx
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
G-3 Form of Swing Line Note
H Form of Prepayment Option Notice
I Form of Exemption Certificate
-iv-
EXHIBIT 10.3
CREDIT AGREEMENT, dated as of May 5, 1998, among ALLIANCE LAUNDRY
HOLDINGS LLC (formerly known as Raytheon Commercial Laundry LLC), a Delaware
limited liability company ("Holdings"), ALLIANCE LAUNDRY SYSTEMS LLC, a Delaware
--------
limited liability company (the "Borrower"), the several banks and other
--------
financial institutions or entities from time to time parties to this Agreement
(the "Lenders"), XXXXXX BROTHERS INC., as advisor and arranger (in such
-------
capacity, the "Arranger"), XXXXXX COMMERCIAL PAPER INC., as syndication agent
--------
(in such capacity, the "Syndication Agent"), and GENERAL ELECTRIC CAPITAL
-----------------
CORPORATION, as administrative agent (in such capacity, the "Administrative
--------------
Agent").
-----
W I T N E S S E T H:
-------------------
WHEREAS, Bain/RCL, L.L.C., a Delaware limited liability company
("Xxxx/RCL"), RCL Acquisitions, L.L.C., a Delaware limited liability company
----------
("MergeCo"), Holdings and Raytheon Company, a Delaware corporation ("Raytheon"),
--------- --------
have entered into that certain Agreement and Plan of Merger, dated as of
February 21, 1998 (as amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof, the "Merger Agreement"), pursuant to
----------------
which each such entity will participate in a leveraged recapitalization
transaction involving Holdings (the "Recapitalization"; references herein to the
----------------
Recapitalization include all financings and other transactions contemplated by
this Agreement to occur on the Closing Date);
WHEREAS, pursuant to the Merger Agreement, the Recapitalization will
be accomplished through the following steps: (a) Bain/RCL, its affiliates,
certain members of management of Holdings and its Subsidiaries and certain other
investors will contribute at least $45,250,000 in cash common equity to MergeCo;
(b) Holdings will transfer as a capital contribution all of its assets and
liabilities to the Borrower (the "Capital Contribution"); (c) MergeCo will be
--------------------
merged with and into Holdings, with Holdings as the surviving entity (the
"Merger"); (d) the Borrower will, together with Alliance Laundry Corporation, a
-------
Delaware corporation ("Alliance Laundry Corporation"), issue $110,000,000 in
----------------------------
aggregate principal amount of 9% Senior Subordinated Notes due 2008; (e) on
the date hereof, the Borrower will make a special distribution and/or loan in
cash to Holdings in the amount of approximately $269,400,000 (the "Intercompany
------------
Distribution"), the proceeds of which will be used to pay a portion of the cash
------------
consideration for the Merger and related fees and expenses; and (f) pursuant to
the Merger, (i) the limited liability company interests in Holdings owned by
Raytheon prior to the Merger will be converted into the right to receive (A)
$339,500,000 in cash (subject to adjustment as provided in the Merger Agreement
(as in effect on the date hereof)), which will be financed in part with the
proceeds of the Intercompany Distribution, (B) common limited liability company
interests of Holdings, as the surviving entity of the Merger, with a value of
approximately $3,500,000, (C) subordinated notes of Holdings in an aggregate
principal amount of $9,000,000 (as amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof, the "Subordinated Seller
-------------------
Notes"), and (D) preferred limited liability company interests of Holdings, as
-----
the surviving entity of the Merger, having an aggregate liquidation preference
of $6,000,000 (as amended, supplemented or otherwise modified from time to time
in accordance with the terms hereof, the "Seller Preferred Membership
---------------------------
Interests", and together with the Subordinated Seller Notes, the "Seller
------
Securities"), and (ii) the limited liability company interests in MergeCo shall
----------
be converted into common limited liability company interests of Holdings, as
2
the surviving entity of the Merger, with a value of $47,100,000 and representing
93% of the outstanding common limited liability company interests of Holdings
after the Merger;
WHEREAS, Holdings and the Borrower have requested that the Lenders
make available the credit facilities pursuant to this Agreement in order to
finance a portion of the Recapitalization, to pay related fees and expenses and
to provide for the general corporate purposes and working capital requirements
of the Borrower and its Subsidiaries following the Recapitalization; and
WHEREAS, the Lenders are willing to make such credit facilities
available upon and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in
-------------
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"Accounts Receivable": as to the Borrower or any of its Subsidiaries,
-------------------
any right to payment (including interest payments) for goods sold or leased
or for services rendered by the Borrower or such Subsidiary in the ordinary
course of business.
"Acquired Person": as to any Person, any other Person (i) at least 80%
---------------
of the Capital Stock of which is owned by such Person and (ii) which is
consolidated with such Person in accordance with GAAP.
"Acquisition": as to any Person, the acquisition by such Person of
-----------
(a) Capital Stock of any other Person if, after giving effect to the
acquisition of such Capital Stock, such other Person would be (i) an
Acquired Person of such Person and (ii) a Subsidiary Guarantor, (b) all or
substantially all of the assets of any other Person or (c) assets
constituting one or more business units of any other Person.
"Adjustment Date": as defined in the Pricing Grid.
---------------
"Administrative Agent": as defined in the Preamble to this Agreement.
--------------------
"Affiliate": as to any Person, any other Person which, directly or
---------
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, to direct or cause the direction
of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent and the
------
Administrative Agent.
3
"Aggregate Exposure": with respect to any Lender at any time, an
------------------
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loan and (ii)
the amount of such Lender's Revolving Credit Commitment then in effect or,
if the Revolving Credit Commitments have been terminated, the amount of
such Lender's Revolving Extensions of Credit then outstanding.
"Aggregate Exposure Percentage" with respect to any Lender at any
-----------------------------
time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all the Lenders at such
time.
"Agreement": this Credit Agreement, as amended, supplemented or
---------
otherwise modified from time to time.
"Alliance Laundry Corporation": as defined in the recitals to this
----------------------------
Agreement.
"ALSA": Alliance Laundry S.A. (formerly known as Raytheon Appliances
----
S.A.), an Argentina corporation.
"Applicable Margin": for each Type of Loan, the rate per annum set
-----------------
forth under the relevant column heading below:
Base Rate Eurodollar
Loans Loans
--------- ----------
Revolving Credit Loans 1.375% 2.375%
Swing Line Loans 1.375% 2.375%
Term Loans 1.625% 2.625%
provided, that, on and after the first Adjustment Date occurring after the
--------
completion of two full fiscal quarters of the Borrower after the Closing
Date, the Applicable Margin with respect to Revolving Credit Loans, Swing
Line Loans and Term Loans will be determined pursuant to the Pricing Grid.
"Application": an application, in such form as the relevant Issuing
-----------
Lender may specify from time to time, requesting such Issuing Lender to
open a Letter of Credit.
"Arranger": as defined in the Preamble to this Agreement.
--------
"Approved Fund": means, with respect to any Lender that is a fund
-------------
that invests in commercial loans, any other fund that invests in commercial
loans and is managed by the same investment advisor as such Lender or by an
Affiliate or such investment advisor.
"Asset Sale": any Disposition of Property or series of related
----------
Dispositions of Property (excluding any such Disposition permitted by
clause (a), (b), (c), (d), (e), (f), (g), (m), (n), (p), (r), (s) or (t)(i)
of Section 7.5) which yields gross proceeds to Holdings, the Borrower or
any of its Subsidiaries (valued at the initial principal amount
4
thereof in the case of non-cash proceeds consisting of notes or other debt
securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $500,000.
"Assignee": as defined in Section 10.6(c).
--------
"Assignor": as defined in Section 10.6(c).
--------
"Available Revolving Credit Commitment": as to any Revolving Credit
-------------------------------------
Lender at any time, an amount equal to the excess, if any, of (a) such
Lender's Revolving Credit Commitment then in effect over (b) such Lender's
----
Revolving Extensions of Credit then outstanding; provided, that (i) in
--------
calculating any Lender's (other than the Swing Line Lender's) Revolving
Extensions of Credit for the purpose of determining such Lender's Available
Revolving Credit Commitment pursuant to Section 2.9(a), the aggregate
principal amount of Swing Line Loans then outstanding shall be deemed to be
zero and (ii) in calculating the Swing Line Lender's Revolving Extensions
of Credit for the purpose of determining the Swing Line Lender's Available
Revolving Credit Commitment pursuant to Section 2.9(a), the Swing Line
Lender's Revolving Extensions of Credit shall be deemed to include the
aggregate principal amount of the Swing Line Loans then outstanding.
"Bain Investors": collectively, Bain/RCL, BCIP Associate, II, BCIP
--------------
Associates II, BCIP Associates II-B, Xxxx Capital Fund V, L.P., Xxxx
Capital Fund V-B, L.P., BCIP Trust Associates II, and BCIP Trust Associate,
II-B.
"Bain/RCL": as defined in the recitals to this Agreement.
--------
"Base Rate": for any day, a rate per annum (rounded upwards, if
---------
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate"
----------
shall mean the rate of interest per annum publicly announced from time to
time by the Reference Lender as its prime or base rate in effect at its
principal office in New York City (the Prime Rate not being intended to be
the lowest rate of interest charged by the Reference Lender in connection
with extensions of credit to debtors). Any change in the Base Rate due to
a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change
in the Prime Rate or the Federal Funds Effective Rate respectively.
"Base Rate Loans": Loans the rate of interest applicable to which is
---------------
based upon the Base Rate.
"Benefitted Lender": as defined in Section 10.7.
-----------------
"Board": the Board of Governors of the Federal Reserve System of the
-----
United States (or any successor).
"Borrower": as defined in the Preamble to this Agreement.
--------
5
"Borrowing Date": any Business Day specified by the Borrower as a
--------------
date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"BRS": Bruckman, Rosser, Xxxxxxxx and Co., L.P.
---
"Business Day": (i) for all purposes other than as covered by clause
------------
(ii) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between banks in Dollar deposits in the interbank eurodollar
market.
"CapEx Carryforward Amount": as defined in Section 7.7.
-------------------------
"Capital Contribution": as defined in the recitals to this Agreement.
--------------------
"Capital Expenditures": for any period, with respect to any Person,
--------------------
the aggregate of all expenditures by such Person and its Subsidiaries for
the acquisition or leasing (pursuant to a capital lease) of fixed or
capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) which should be
capitalized under GAAP on a consolidated balance sheet of such Person and
its Subsidiaries.
"Capital Lease Obligations": with respect to any Person, the
-------------------------
obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and, for the purposes of this Agreement, the amount of
such obligations at any time shall be the capitalized amount thereof at
such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
-------------
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any of
the foregoing.
"Cash Equivalents": (a) (i) with respect to the Borrower or any
----------------
Domestic Subsidiary, marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United
States or (ii) with respect to any Foreign Subsidiary, marketable direct
obligations issued by, or unconditionally guaranteed by, the government of
the jurisdiction of organization of such Foreign Subsidiary or issued by
any agency thereof and backed by the full faith and credit of such
government, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, bankers' acceptances, time
deposits, eurodollar time deposits or overnight bank deposits having
maturities of one year or less from the date of acquisition issued by any
Lender or by any commercial
6
bank organized under the laws of the United States of America or any state
thereof having combined capital and surplus of not less than $500,000,000
(or, in the case of any certificate of deposit, bankers' acceptances, time
deposits, eurodollar time deposits or overnight time deposits of any
Foreign Subsidiary, issued by any commercial bank having capital and
surplus of not less than $500,000,000 (or the equivalent thereof)); (c)
commercial paper rated at least A-2 (or the equivalent thereof) by Standard
& Poor's Ratings Services ("S&P") or P-2 (or the equivalent thereof) by
---
Xxxxx'x Investors Service, Inc. ("Moody's"), or carrying an equivalent
-------
rating by a nationally recognized rating agency, if both of the two named
rating agencies cease publishing ratings of commercial paper generally, and
maturing within one year from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the
applicable requirements of clause (b) of this definition, having a term of
not more than 30 days with respect to securities of the types described in
clauses (a) and (b) of this definition; (e) securities with maturities of
one year or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A (or the equivalent
thereof) by S&P or A (or the equivalent thereof) by Moody's or carry an
equivalent rating by a nationally recognized rating agency if both of the
two named rating agencies cease publishing ratings of such type generally;
(f) securities with maturities of one year or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar funds which
invest substantially in assets satisfying the requirements of clauses (a)
through (f) of this definition.
"Closing Date": the date on which the conditions precedent set forth
------------
in Section 5.1 shall have been satisfied or waived, which date is May 5,
1998.
"Code": the Internal Revenue Code of 1986, as amended from time to
----
time.
"Collateral": all Property of the Loan Parties, now owned or
----------
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commitment": as to any Lender, the sum of the Term Loan Commitment
----------
and the Revolving Credit Commitment of such Lender.
"Commitment Fee Rate": 0.50% per annum; provided, that on and after
------------------- --------
the first Adjustment Date occurring after the completion of two full fiscal
quarters of the Borrower after the Closing Date, the Commitment Fee Rate
will be determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not incorporated,
--------------------------
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414(b), (c), (m) or (o)
of the Code.
7
"Compliance Certificate": a certificate duly executed by a
----------------------
Responsible Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential Information
-----------------------------------
Memorandum dated April, 1998 and furnished to the Lenders.
"Consolidated Cash Interest Expense": for any period, the
----------------------------------
Consolidated Interest Expense payable in cash during such period, provided,
--------
that, the Consolidated Interest Expense accrued with respect to the Senior
----
Subordinated Notes during such period shall be deemed to be payable in cash
during such period.
"Consolidated Current Assets": at any date, all amounts (other than
---------------------------
cash, Cash Equivalents and deferred income taxes) which would, in
conformity with GAAP, be set forth opposite the caption "total current
assets" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts which
--------------------------------
would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet
of the Borrower and its Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt (including accrued but unpaid interest)
of the Borrower and its Subsidiaries and (b) without duplication of clause
(a) above, all Indebtedness (including accrued but unpaid interest)
consisting of Term Loans, Revolving Credit Loans, Letters of Credit or
Swing Line Loans to the extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income for
-------------------
such period plus the sum of (a) cash interest margin of the Borrower and
----
its Subsidiaries (including the Securitization Entities) from Notes
Receivable (after giving effect to any Hedge Agreements relating to such
Notes Receivables) and (b) without duplication and to the extent reflected
as a charge in the statement of such Consolidated Net Income for such
period, the sum of (i) income tax expense (including franchise taxes
imposed in lieu of income taxes), (ii) interest expense associated with
Indebtedness (including the Loans and the Letters of Credit) and Hedge
Agreements, but excluding any interest expense associated with any
Indebtedness (including Letters of Credit) issued in connection with any
Permitted Receivables Financing, (iii) amortization or writeoff of deferred
financing fees, debt discount and debt issuance costs and commissions,
discounts and other fees and charges associated with Indebtedness
(including the Loans, the Letters of Credit and any Indebtedness issued in
connection with any Permitted Receivables Financing) and Hedge Agreements,
(iv) depreciation and amortization expense, (v) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (vi) any
extraordinary, unusual or non-recurring expenses or losses (including,
whether or not otherwise includable as a
8
separate item in the statement of such Consolidated Net Income for such
period, losses on sales of assets outside of the ordinary course of
business, and charges for the writeoff of any step-up in basis of inventory
required in a transaction which is accounted for under the purchase method
of accounting and (vii) any other non-cash charges and minus, to the extent
-----
included in the statement of such Consolidated Net Income for such period,
the sum of (x) interest income, (y) any extraordinary, unusual or non-
recurring income or gains (including, whether or not otherwise includable
as a separate item in the statement of such Consolidated Net Income for
such period, gains on the sales of assets outside of the ordinary course of
business) and (z) any other non-cash income, all as determined on a
consolidated basis.
"Consolidated Interest Coverage Ratio": for any period, the ratio of
------------------------------------
(a) Consolidated EBITDA for such period to (b) Consolidated Cash Interest
Expense for such period.
"Consolidated Interest Expense": for any period, total interest
-----------------------------
expense (including that attributable to Capital Lease Obligations) of the
Borrower and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing
and net costs under Hedge Agreements in respect of interest rates to the
extent such net costs are allocable to such period in accordance with GAAP,
but excluding any interest expense associated with any Indebtedness
(including Letters of Credit) issued in connection with any Permitted
Receivables Financing).
"Consolidated Leverage Ratio": as at the last day of any period of
---------------------------
four consecutive fiscal quarters of the Borrower, the ratio of (a)
Consolidated Total Debt on such day to (b) Consolidated EBITDA for such
period; provided that for purposes of calculating Consolidated EBITDA for
--------
any period, the Consolidated EBITDA of any Person or assets acquired by the
Borrower or any of its Subsidiaries during such period pursuant to an
Acquisition or Subsidiary Acquisition permitted hereunder (including the
portion of such period prior to the consummation of such Acquisition or
Subsidiary Acquisition) shall be included on a pro forma basis for such
--- -----
period (assuming that (i) the consummation of such acquisition and the
incurrence, assumption or repayment of any Indebtedness in connection
therewith occurred on the first day of such period and (ii) any cost
savings to be implemented in connection with such Acquisition or Subsidiary
Acquisition as to which the Borrower shall have provided support for the
calculation thereof in conformity with Regulation S-X under the Securities
Act as in effect on the date hereof had been effected on the first day of
such period) if the Borrower shall deliver to the Administrative Agent a
certificate of a Responsible Officer setting forth, consistent with Article
11 of Regulation S-X under the Securities Act as in effect on the date
hereof, the calculations required to support such pro forma adjustments.
--- -----
"Consolidated Net Income": for any period, the consolidated net
-----------------------
income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
--------
excluded (a) the income (or loss) of any Person accrued prior to the date
it becomes a Subsidiary of the Borrower or is merged into or consolidated
with the Borrower or any of its Subsidiaries pursuant to an Acquisition
permitted hereunder, (b) the income (or loss) of any Person (other than a
Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form
of dividends or similar distributions and (c) the undistributed earnings of
any Subsidiary of the Borrower to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at
the time permitted by the
9
terms of any Contractual Obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary.
"Consolidated Senior Debt": all Funded Debt under this Agreement and
------------------------
all other Funded Debt of the Borrower and its Subsidiaries (excluding all
other Funded Debt of the Borrower and its Subsidiaries which is
subordinated to the Funded Debt under this Agreement on terms no less
favorable than the terms of the Senior Subordinated Notes).
"Consolidated Senior Debt Leverage Ratio": as at the last day of any
---------------------------------------
period of four consecutive fiscal quarters of the Borrower, the ratio of
(a) Consolidated Senior Debt on such day to (b) Consolidated EBITDA for
such period; provided that for purposes of calculating Consolidated EBITDA
--------
for any period, the Consolidated EBITDA of any Person or assets acquired by
the Borrower or any of its Subsidiaries during such period pursuant to an
Acquisition or Subsidiary Acquisition permitted hereunder (including the
portion of such period prior to the consummation of such Acquisition or
Subsidiary Acquisition) shall be included on a pro forma basis for such
--- -----
period (assuming that (i) the consummation of such acquisition and the
incurrence, assumption or repayment of any Indebtedness in connection
therewith occurred on the first day of such period and (ii) any cost
savings to be implemented in connection with such Acquisition or Subsidiary
Acquisition as to which the Borrower shall have provided support for the
calculation thereof in conformity with Regulation S-X under the Securities
Act as in effect on the date hereof had been effected on the first day of
such period) if the Borrower shall deliver to the Administrative Agent a
certificate of a Responsible Officer setting forth, consistent with Article
11 of Regulation S-X under the Securities Act as in effect on the date
hereof, the calculations required to support such pro forma adjustments.
--- -----
"Consolidated Total Debt": at any date, the aggregate principal
-----------------------
amount of all Funded Debt of the Borrower and its Subsidiaries at such
date, determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": at any date, the excess of
----------------------------
Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date.
"Contractual Obligation": as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Control Investment Affiliate": as to any Person, any other Person
----------------------------
which, directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, to direct or
cause the direction of the management and policies of such Person whether
by contract or otherwise.
"Default": any of the events specified in Section 8, whether or not
-------
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Designated Equity Amounts": at any date, the amount equal to the
-------------------------
aggregate amount of Net Cash Proceeds received by Holdings from the
issuance of Capital Stock
10
(other than to the Borrower or any Subsidiary of Holdings or the Borrower)
or from any capital contribution to Holdings by a Person other than the
Borrower or any Subsidiary of Holdings or the Borrower which have been
designated in writing by the Borrower to the Administrative Agent as
"Permitted Expenditure Amounts" so long as such Net Cash Proceeds are
utilized by Holdings, the Borrower or any of its Subsidiaries within 45
days after such receipt for an Expenditure Use Amount.
"Disposition": with respect to any Property, any sale, lease, sale
-----------
and leaseback, assignment, conveyance, transfer or other disposition
thereof (excluding the sale by Holdings of its own Capital Stock); the
terms "Dispose" and "Disposed of" shall have correlative meanings.
------- -----------
"Dollars" and "$": dollars in lawful currency of the United States of
------- -
America.
"Domestic Subsidiary": any Subsidiary of the Borrower organized or
-------------------
incorporated under the laws of any jurisdiction within the United States of
America.
"ECF Percentage": 75%; provided, that, with respect to any fiscal
-------------- --------
year of the Borrower ending on or after December 31, 1999, the ECF
Percentage with respect to such fiscal year shall be 50% if the
Consolidated Leverage Ratio at the last day of the period of four
consecutive fiscal quarters ending on the last day of such fiscal year is
not greater than 4.00 to 1.0.
"Eligible Assignee": means (a) a Lender or an Affiliate of a Lender,
-----------------
(b) a commercial bank organized under the laws of the United States or any
state and having total assets in excess of $500,000,000 or an Affiliate of
any such bank or (c) any other fund or financial institution or Affiliate
or Approved Fund thereof that in the ordinary course of business extends
credit or invests in extensions of credit of a type similar to the
Revolving Credit Loans and has total assets of at least $100,000,000.
"Environmental Laws": any and all foreign, Federal, state, local or
------------------
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability
or standards of conduct concerning protection of the environment, as now or
at any time hereafter in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
---------------------------------
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of the Board) maintained by a
member bank of the Federal Reserve System.
11
"Eurodollar Base Rate": with respect to each day during each Interest
--------------------
Period pertaining to a Eurodollar Loan, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Dow Xxxxx Markets screen as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest
Period. In the event that such rate does not appear on Page 3750 of the
Dow Xxxxx Markets screen (or otherwise on such screen), the "Eurodollar
----------
Base Rate" for purposes of this definition shall mean, with respect to each
---------
day during each Interest Period pertaining to a Eurodollar Loan, the rate
at which the Administrative Agent is offered Dollar deposits by first class
banks at or about 11:00 A.M., New York City time, two Business Days prior
to the beginning of such Interest Period in the interbank eurodollar market
for delivery on the first day of such Interest Period for the number of
days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
----------------
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
---------------
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
-----------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
------------------
the then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
----------------
provided that any requirement for the giving of notice, the lapse of time,
--------
or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the excess,
----------------
if any, of (a) the sum, without duplication, of (i) Consolidated Net Income
for such fiscal year, (ii) an amount equal to the amount of all non-cash
charges (including depreciation and amortization, but excluding any non-
cash charges associated with any Permitted Receivables Financing) deducted
in arriving at such Consolidated Net Income, (iii) decreases in
Consolidated Working Capital for such fiscal year, (iv) an amount equal to
the aggregate net non-cash loss on the Disposition of Property by the
Borrower and
12
its Subsidiaries during such fiscal year (other than sales of inventory in
the ordinary course of business and sales of Receivables pursuant to any
Permitted Receivables Financing), to the extent deducted in determining
such Consolidated Net Income, (v) the net increase during such fiscal year
(if any) in deferred tax accounts of the Borrower, (vi) the amount by which
Consolidated Working Capital was increased as a result of the payment in
such fiscal year of items referred to in clause (b)(xvi) below, (vii) any
unused CapEx Carryforward Amount from the prior fiscal year, (viii)
decreases during such fiscal year in the retained interest of the Borrower
and its Subsidiaries in any Securitization Entity resulting from the sale
of Receivables to such Securitization Entity in connection with a Permitted
Receivables financing and (ix) any cash deposits returned to the Borrower
and its Subsidiaries in respect of the Limited Originator Recourse during
such fiscal year over (b) the sum, without duplication, of----(i) an amount
equal to the amount of all non-cash credits included in determining such
Consolidated Net Income, (ii) the aggregate amount actually paid by the
Borrower and its Subsidiaries in cash during such fiscal year on account of
Capital Expenditures (excluding the principal amount of Indebtedness
incurred in connection with such expenditures and any such expenditures
financed with the proceeds of any portion of any Reinvestment Deferred
Amount that exceeded any gain included in the determination of Consolidated
Net Income recognized as a result of the event that gave rise to such
Reinvestment Deferred Amount or Permitted Expenditure Amounts), (iii) the
CapEx Carryforward Amount for such fiscal year, (iv) the aggregate amount
of all prepayments of Revolving Credit Loans and Swing Line Loans during
such fiscal year to the extent accompanying permanent optional reductions
of the Revolving Credit Commitments and all optional prepayments of the
Term Loans and other Funded Debt (to the extent such Funded Debt may not be
reborrowed under the terms of such Funded Debt) during such fiscal year,
(v) the aggregate amount of all regularly scheduled principal payments of
Funded Debt (including, without limitation, the Term Loans) of the Borrower
and its Subsidiaries made during such fiscal year (other than in respect of
any revolving credit facility to the extent there is not an equivalent
permanent reduction in commitments thereunder), (vi) increases in
Consolidated Working Capital for such fiscal year, (vii) an amount equal to
the aggregate net non-cash gain on the Disposition of Property by the
Borrower and its Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent included in
determining such Consolidated Net Income, (viii) the net decrease during
such fiscal year (if any) in deferred tax accounts of the Borrower, (ix)
cash expenses paid during such period in connection with the issuance
pursuant to the Senior Subordinated Note Indenture of senior subordinated
notes in exchange for the 9% Senior Subordinated Notes issued pursuant to
the Senior Subordinated Note Indenture on the Closing Date to the extent
not deducted in determining such Consolidated Net Income, (x) any cash
payments made during such period in permanent satisfaction of non-current
liabilities of the Borrower and its Subsidiaries, (xi) any cash payments
made during such fiscal year in respect of restructuring charges to the
extent not deducted in determining such Consolidated Net Income, (xii) any
Restricted Payments permitted under Section 7.6 and made in cash during
such fiscal year, (xiii) increases during such fiscal year in the retained
interest of the Borrower and its Subsidiaries in any Securitization Entity
resulting from the sale of Receivables to such Securitization Entity in
connection with a Permitted Receivables Financing, (xiv) any cash payments
made during such fiscal year pursuant to Investments permitted under
Sections 7.8(d), 7.8(i) (other than in respect of Acquisitions consummated
in accordance with clause (i)(A)(y) of the proviso to Section 7.8(i)),
7.8(l) and 7.8(p) and which results in a net increase during such fiscal
year in the outstanding or unreturned cash balance of such Investments,
(xv) any gain recognized as a result of any Asset Sale or Recovery Event to
the extent such gain was included in determining such Consolidated Net
Income, (xvi) the amount of non cash charges that decreased Consolidated
Working Capital during such fiscal year which resulted from items that the
Borrower reasonably determines in good faith are expected to be paid in
cash in the immediately following fiscal year and (xvii) any cash deposits
made by the Borrower and its Subsidiaries pursuant to the Limited
Originator Recourse during such fiscal year.
"Excess Cash Flow Application Date": as defined in Section 2.12(c).
---------------------------------
13
"Excluded Subsidiaries": collectively, any Foreign Subsidiaries and
---------------------
any Securitization Entities.
"Expenditure Use Amounts": at any date, the amount equal to the sum
-----------------------
of (a) all amounts utilized by Holdings, the Borrower and its Subsidiaries
as of such date to finance Capital Expenditures, other than Capital
Expenditures which are (i) not in excess of the permitted Capital
Expenditures for the relevant fiscal year as set forth in Section 7.7(a)
and any CapEx Carryforward Amounts from the prior fiscal year, (ii)
financed with Reinvestment Deferred Amounts, or (iii) attributable to all
or a portion of the cost of Acquisitions or Subsidiary Acquisitions
permitted under Section 7.8, (b) all amounts utilized by Holdings, the
Borrower and its Subsidiaries as of such date to finance Acquisitions
permitted pursuant to Section 7.8(i), except to the extent that the
consideration (determined in accordance with Section 7.8(i)) for all such
Acquisitions made since the Closing Date does not exceed $30,000,000 in the
aggregate, (c) all amounts utilized by the Borrower as of such date to
repurchase or redeem Senior Subordinated Notes permitted pursuant to
Section 7.9(a) and (d) all amounts utilized by the Borrower and the
Subsidiary Guarantors as of such date to finance Investments (other than
Acquisitions) pursuant to Section 7.8(i), except to the extent that the
consideration (determined in accordance with Section 7.8(i)) for all such
Investments (other than Acquisitions) made since the Closing Date does not
exceed $5,000,000 in the aggregate.
"Facility": each of (a) the Term Loan Commitments and the Term Loans
--------
made thereunder (the "Term Loan Facility") and (b) the Revolving Credit
------------------
Commitments and the extensions of credit made thereunder (the "Revolving
---------
Credit Facility").
---------------
"Federal Funds Effective Rate": for any day, the weighted average of
----------------------------
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by
the Reference Lender from three federal funds brokers of recognized
standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
------------------
Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such Person that
-----------
matures more than one year from the date of its creation or matures within
one year from such date but is renewable or extendible, at the option of
such Person, to a date more than one year from such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders
to extend credit during a period of more than one year from such date,
including, without limitation, all current maturities and current sinking
fund payments in respect of such Indebtedness whether or not required to be
paid within one year from the date of its creation and, in the case of the
Borrower, Indebtedness in respect of the Loans, provided that (a) any
--------
Indebtedness of such Person in respect of the undrawn portion of any letter
of credit shall not constitute Funded Debt of such Person and (b) any
undrawn loan commitment or cash collateral deposit pursuant to the Limited
14
Originator Recourse shall not constitute Funded Debt of the Borrower and
its Subsidiaries.
"Funding Office": the office specified from time to time by the
--------------
Administrative Agent as its funding office by notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United States
----
of America as in effect from time to time, except that for purposes of
Section 7.1, GAAP shall be determined on the basis of such principles in
effect on the date hereof and consistent with those used in the preparation
of the most recent audited financial statements delivered pursuant to
Section 4.1(b), except that calculations made for purposes of determining
compliance with Section 7.1 and for purposes of determining the Applicable
Margin shall be made without giving effect to depreciation, amortization or
other expenses to the extent recorded as a result of the application of
purchase accounting in accordance with Accounting Principles Board Opinion
Nos. 16 and 17. In the event that any "Accounting Change" (as defined
below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement,
then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the
same after such Accounting Changes as if such Accounting Changes had not
been made. Until such time as such an amendment shall have been executed
and delivered by the Borrower, the Administrative Agent and the Required
Lenders, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Accounting Changes
had not occurred. "Accounting Changes" refers to changes in accounting
principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants or, if applicable, the
Securities and Exchange Commission (or successors thereto or agencies with
similar functions).
"Governmental Authority": any nation or government, any state or
----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government (including, without limitation, the National
Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and Collateral
----------------------------------
Agreement to be executed and delivered by Holdings, Alliance Laundry
Corporation, the Borrower and each Subsidiary Guarantor, substantially in
the form of Exhibit A, as the same may be amended, supplemented or
otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
-------------------- -------------------
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
-------------------
(the "primary obligor") in any manner, whether directly or indirectly,
---------------
including, without limitation, any
15
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
-------- -------
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection or standard contractual indemnities entered into, in
each case, in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of
(a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b)
the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by the Borrower in good faith.
"Guarantors": the collective reference to Holdings, Alliance Laundry
----------
Corporation and the Subsidiary Guarantors.
"Hedge Agreements": all interest rate or currency swaps, caps or
----------------
collar agreements or similar arrangements or foreign exchange contracts
entered into by the Borrower or any of its Subsidiaries providing for
protection against fluctuations in interest rates or currency exchange
rates or the exchange of nominal interest obligations, either generally or
under specific contingencies.
"Holdings": as defined in the Preamble to this Agreement.
--------
"Indebtedness": of any Person at any date, without duplication, (a)
------------
all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of Property or services (other
than current accounts or trade payables and accrued expenses incurred in
the ordinary course of such Person's business and excluding any such
obligations arising under ERISA other than such obligations which must be
satisfied within the succeeding twelve months) to the extent such
obligations would appear as liabilities on a consolidated balance sheet of
such Person prepared in accordance with GAAP, (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments,
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to Property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of
such Property), (e) all Capital Lease Obligations of such Person, (f) the
face amount of all obligations of such Person, contingent or otherwise, as
an account party under acceptance, letter of credit or similar facilities,
(g) all Guarantee Obligations of such Person in respect of obligations of
the kind referred to in clauses (a) through (f) above;
16
(h) all obligations of the kind referred to in clauses (a) through (g)
above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on
Property (including, without limitation, accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become
liable for the payment of such obligation, and (i) for the purposes of
Section 8(e) only, all obligations of such Person in respect of Hedge
Agreements. The amount of any Indebtedness under (x) clause (h) shall be
equal to the lesser of (A) the stated amount of the relevant obligations
and (B) the fair market value of the Property subject to the relevant Lien
and (y) clause (i) shall be the net amount, including any net termination
payments, required to be paid to a counterparty rather than the notional
amount of the applicable Hedge Agreement.
"Indemnified Liabilities": as defined in Section 10.5.
-----------------------
"Indemnitee": as defined in Section 10.5.
----------
"Initial Receivables Facility": as defined in Section 5.1(c).
----------------------------
"Insolvency": with respect to any Multiemployer Plan, the condition
----------
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
---------
"Intellectual Property": the collective reference to all rights,
---------------------
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents,
patent licenses, trademarks, trademark licenses, technology, know-how and
processes, and all rights to xxx at law or in equity for any infringement
or other impairment thereof, including the right to receive all proceeds
and damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the first day
---------------------
of each April, July, October and January to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last
day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day which is three months,
or a whole multiple thereof, after the first day of such Interest Period
and the last day of such Interest Period and (d) as to any Loan (other than
any Revolving Credit Loan that is a Base Rate Loan and any Swing Line
Loan), the date of any repayment or prepayment made in respect thereof.
"Intercompany Distribution": as defined in the recitals to this
-------------------------
Agreement.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
---------------
period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending, (i) in the case of any
such period ending on or prior to the date which is 30 days after the
Closing Date, one week thereafter and (ii) in the case of any such period
ending on or after the date which is 30 days after the Closing Date, one,
two,
17
three or six or (if available to all Lenders under the relevant
Facility) nine or twelve months thereafter, as selected by the Borrower in
its notice of borrowing or notice of conversion, as the case may be, given
with respect thereto; and (b) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending, (i) in the case of any such period ending on or
prior to the date which is 30 days after the Closing Date, ending one week
thereafter and (ii) in the case of any such period ending on or after the
date which is 30 days after the Closing Date, one, two, three or six or (if
available to all Lenders under the relevant Facility) nine or twelve months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last
day of the then current Interest Period with respect thereto; provided
--------
that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) (A) any Interest Period with respect to any Revolving
Credit Loan that would otherwise extend beyond the Scheduled Revolving
Credit Termination Date shall end on the Revolving Credit Termination
Date and (B) any Interest Period with respect to any Term Loan that
would otherwise extend beyond the date final payment is due on the
Term Loans shall end on such due date;
(iii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not
to require a prepayment of any Eurodollar Loan during an Interest
Period for such Loan in connection with any scheduled payment of
principal with respect thereto.
"Investments": as defined in Section 7.8.
-----------
"Issuing Lender": (a) any Lender designated as the "Issuing Lender"
--------------
in a written notice from the Administrative Agent and the Borrower to the
Lenders and (b) any commercial bank reasonably acceptable to the Borrower
which is designated as the "Issuing Lender" by the Administrative Agent and
subject to a Master L/C Agreement with the Administrative Agent, in each
case in its capacity as issuer of any Letter of Credit.
"L/C Commitment": $25,000,000.
--------------
"L/C Fee Payment Date": the first day of each April, July, October
--------------------
and January and the last day of the Revolving Credit Commitment Period.
18
"L/C Obligations": at any time, an amount equal to the sum of (a) the
---------------
aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit
which have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Revolving
----------------
Credit Lenders.
"Lenders": as defined in the Preamble to this Agreement.
-------
"Letters of Credit": as defined in Section 3.1(a).
-----------------
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever, in each case,
for the purpose of securing any obligation of any Person (including,
without limitation, any conditional sale or other title retention agreement
and any capital lease having substantially the same economic effect as any
of the foregoing).
"Limited Originator Recourse": a reimbursement obligation of the
---------------------------
Borrower or any of its Subsidiaries with respect to a letter of credit,
revolving loan commitment, cash collateral account or other such credit
enhancement issued in connection with the incurrence of Indebtedness by a
Securitization Entity under a Permitted Receivables Financing; provided,
--------
that the aggregate available amount of all such credit enhancements at any
time shall not exceed 10.0% of the principal amount of such Indebtedness at
such time.
"Loan": any loan made by any Lender pursuant to this Agreement.
----
"Loan Documents": this Agreement, the Security Documents the Notes
--------------
and the Applications.
"Loan Parties": Holdings, the Borrower, Alliance Laundry Corporation
------------
and each Subsidiary of the Borrower which is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
-------------------------
holders of more than 50% of the aggregate unpaid principal amount of the
Term Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Credit
Facility, prior to any termination of the Revolving Credit Commitments, the
holders of more than 50% of the Total Revolving Credit Commitments).
"Majority Revolving Credit Facility Lenders": the Majority Facility
------------------------------------------
Lenders in respect of the Revolving Credit Facility.
"Management Notes": as defined in Section 7.6(b).
----------------
"Material Adverse Effect": a material adverse effect on (a) the
-----------------------
business, assets, property or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken
19
as a whole or (b) the validity or enforceability of this Agreement or any
of the other Loan Documents or the rights or remedies, taken as a whole, of
the Administrative Agent or the Lenders hereunder or thereunder.
"Material Subsidiary": any Subsidiary of Holdings or the Borrower
-------------------
which has assets (valued at their fair market value) or annual revenues
which are in excess of $2,500,000.
"Materials of Environmental Concern": any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"MergeCo": as defined in the recitals to this Agreement.
-------
"Merger": as defined in the recitals to this Agreement.
------
"Merger Agreement": as defined in the recitals to this Agreement.
----------------
"Mortgaged Properties": the real properties listed on Schedule 1.1B,
--------------------
as to which the Administrative Agent for the benefit of the Lenders shall
be granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by any
---------
Loan Party in favor of, or for the benefit of, the Administrative Agent for
the benefit of the Lenders, substantially in the form of Exhibit D (with
such changes thereto as shall be advisable under the law of the
jurisdiction in which such mortgage or deed of trust is to be recorded), as
the same may be amended, supplemented or otherwise modified from time to
time.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
------------------
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
-----------------
Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or the sale or disposition of any non-
cash consideration or otherwise, but only as and when received and
excluding the portion of such deferred payment constituting interest) of
such Asset Sale or Recovery Event, net of attorneys' fees, accountants'
fees, investment banking fees, amounts required to be applied to the
repayment of Indebtedness secured by a Lien expressly permitted hereunder
on any asset which is the subject of such Asset Sale or Recovery Event
(other than any Lien pursuant to a Security Document) and other customary
costs, fees and expenses actually incurred in connection therewith and net
of taxes paid or reasonably estimated to be payable as a result thereof
(after taking into account any available tax credits or deductions and any
tax sharing arrangements) and net of amounts deposited in escrow in
connection therewith or reasonably expected to be paid as a result
20
of any purchase price adjustment, indemnities or reserves related thereto
(such amounts shall be Net Cash Proceeds to the extent and at the time
released or not required to be so used) and (b) in connection with any
issuance or sale of equity securities or debt securities or instruments or
the incurrence of loans or capital contribution, the cash proceeds received
from such issuance, incurrence or capital contribution, net of attorneys'
fees, investment banking fees, accountants' fees, underwriting discounts
and commissions and other customary fees and expenses actually incurred in
connection therewith.
"Non-Excluded Taxes": as defined in Section 2.20(a).
------------------
"Non-U.S. Lender": as defined in Section 2.20(d).
---------------
"Notes": the collective reference to any promissory note evidencing
-----
Loans.
"Notes Receivable": as to the Borrower or any of its Subsidiaries,
----------------
any right to payment in respect of loans or finance leases made by the
Borrower or such Subsidiary to its customers or users of the Borrower's or
any Subsidiary's product or customers of distributors of such products in
the ordinary course of business.
"Obligations": the unpaid principal of and interest on (including,
-----------
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans and Reimbursement Obligations and all other
obligations and liabilities of the Borrower to the Administrative Agent or
to any Lender (or, in the case of Hedge Agreements, any affiliate of any
Lender), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, any other Loan Document, the
Letters of Credit, any Hedge Agreement entered into with any Lender or any
affiliate of any Lender, or any other document made, delivered or executed
by any Loan Party in connection herewith or therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that
are required to be paid by the Borrower pursuant hereto) or otherwise.
"Other Taxes": any and all present or future stamp or documentary
-----------
taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant": as defined in Section 10.6(b).
-----------
"Payment Office": the office specified from time to time by the
--------------
Administrative Agent as its payment office by notice to the Borrower and
the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
----
to Subtitle A of Title IV of ERISA (or any successor).
21
"Permitted Co-Investors": (i) BRS, BCB Family Partners, L.P., NAZ
----------------------
Family Partners, L.P., Xxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxxx, Xxxxxx X.
Xxxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxx, H. Xxxxxx Xxxxxxxx, Xxxxx
X. Xxxxx, Xxxx Xxxx Emunds, Xxxxx Xxxxxx, Xxxxxxxx Xxxxxx, Xxxxxx X.
Xxxxxxx, MLPF&S Custodian FBO Xxxx Xxxxxxxx, and BRS/RCL Investment Corp.
or (ii) any Person or Persons which acquire the Capital Stock of Holdings
owned by such Persons referred to in the preceding clause (i) on the
Closing Date with the consent of Xxxx/RCL, and in the case of each of
clauses (i) and (ii) above, any of their respective Related Parties and
Control Investment Affiliates.
"Permitted Expenditure Amounts": at any date, the amount equal to (a)
-----------------------------
the sum of (i) all Designated Equity Amounts as of such date, (ii) any
portion of the Excess Cash Flow of the Borrower for fiscal years completed
since the Closing Date which was not required to be applied toward the
prepayment of the Term Loan and the reduction of the Revolving Credit
Commitments pursuant to the provisions of Section 2.12(c) and (iii) 50% of
the aggregate Prepayment Amounts declined by the Term Loan Lenders pursuant
to Section 2.18(d) as of such date minus (b) the aggregate amount of
Expenditure Use Amounts as of such date.
"Permitted Investors": the collective reference to the Sponsor, the
-------------------
Xxxx Investors and their respective Related Parties and Control Investment
Affiliates.
"Permitted Receivables Financing": (a) the Initial Receivables
-------------------------------
Facility, as the same may be amended, modified, changed or replaced from
time to time and/or (b) any other off-balance sheet transaction providing
for the sale of Receivables by the Borrower and its Subsidiaries to a
Securitization Entity or any other Person (other than Holdings, the
Borrower or any of their respective Subsidiaries) which transaction may
include limited recourse to the Borrower and its Subsidiaries (not to
exceed the Limited Originator Recourse) based on the collectability of the
Receivables sold.
"Person": an individual, partnership, corporation, limited liability
------
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Plan": at a particular time, any employee benefit plan which is
----
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pricing Grid": the pricing grid attached hereto as Annex A.
------------
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
-----------------------
"Projections": as defined in Section 6.2(c).
-----------
"Properties": as defined in Section 4.17(a).
----------
22
"Property": any right or interest in or to property of any kind
--------
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Raytheon": as defined in the recitals to this Agreement.
--------
"Recapitalization": as defined in the recitals to this Agreement.
----------------
"Recapitalization Documents": the collective reference to the Merger
--------------------------
Agreement and all other documents and agreements delivered in connection
therewith on the Closing Date.
"Receivables": as to the Borrower or any of its Subsidiaries,
-----------
collectively, the Accounts Receivable and Notes Receivable of the Borrower
or such Subsidiary, as the case may be.
"Recovery Event": any settlement of or payment in respect of any
--------------
property or casualty insurance claim or any condemnation proceeding
relating to any asset of Holdings, the Borrower or any of its Subsidiaries
with a value in excess of $500,000.
"Reference Lender": Citibank, N.A. or its successor.
----------------
"Refunded Swing Line Loans": as defined in Section 2.7(b).
-------------------------
"Refunding Date": as defined in Section 2.7(c).
--------------
"Register": as defined in Section 10.6(d).
--------
"Regulation U": Regulation U of the Board as in effect from time to
------------
time.
"Reimbursement Obligation": the obligation of the Borrower to
------------------------
reimburse the relevant Issuing Lender or the Administrative Agent, as the
case may be, pursuant to Section 3.5 for amounts drawn under Letters of
Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment
----------------------------
Event, the aggregate Net Cash Proceeds received by Holdings, the Borrower
or any of its Subsidiaries in connection therewith which are not applied to
prepay the Term Loans or reduce the Revolving Credit Commitments pursuant
to Section 2.12(b) as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
------------------
which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
-------------------
Officer stating that no Event of Default has occurred and is continuing and
that the Borrower (directly or indirectly through a Subsidiary Guarantor)
(in the case of any Asset Sale or Recovery Event relating to assets of the
Borrower or a Subsidiary Guarantor) or any Subsidiary (in the case of any
Asset Sale or Recovery Event relating to assets of a Subsidiary which is
23
not a Subsidiary Guarantor) intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to
acquire assets (directly or through the purchase of the Capital Stock of a
Person pursuant to an Acquisition or (in the case of any Asset Sale or
Recovery Event relating to assets of a Subsidiary which is not a Subsidiary
Guarantor or the Capital Stock of any such Subsidiary) Subsidiary
Acquisition) useful in its business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
------------------------------
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire
assets (directly or through the purchase of the Capital Stock of a Person
pursuant to an Acquisition or (in the case of any Asset Sale or Recovery
Event relating to assets of a Subsidiary which is not a Subsidiary
Guarantor or the Capital Stock of any such Subsidiary) Subsidiary
Acquisition) useful in the Borrower's or any of its Subsidiaries' business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
----------------------------
Event, the earlier of (a) the date occurring six months after such
Reinvestment Event (or (i) in the case of any Reinvestment Event arising
out of any Asset Sale in connection with the Ripon Transition, the date
occurring nine months after such Reinvestment Event, or (ii) in the case of
any Reinvestment Event arising out of a casualty insurance claim where the
Borrower or any of its Subsidiaries is rebuilding or restoring the property
subject to such casualty, the date occurring twelve months after such
Reinvestment Event) and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, acquire assets
(directly or through the purchase of the Capital Stock of a Person pursuant
to an Acquisition or (in the case of any Asset Sale or Recovery Event
relating to assets of a Subsidiary which is not a Subsidiary Guarantor or
the Capital Stock of any such Subsidiary) Subsidiary Acquisition) useful in
the Borrower's or any of its Subsidiaries' business with all or any portion
of the relevant Reinvestment Deferred Amount.
"Related Party": with respect to any Person, any stockholder,
-------------
officer, employee or partner of such Person and (a) trusts for the benefit
of such Person or the spouses, issue, parents or other relatives of such
Person, (b) entities controlling or controlled by such Person and (c) in
the event of the death of any such individual Person, heirs or testamentary
legatees of such Person.
"Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
----------------
ERISA, other than those events as to which the notice period is waived
under subsections .22, .23, .25, .27 or .28 of PBGC Reg. (S) 4043.
"Required Lenders": at any time, the holders of more than 50% of (a)
----------------
until the Closing Date, the Commitments and (b) thereafter, the sum of (i)
the aggregate unpaid principal amount of the Term Loans then outstanding
and (ii) the Total Revolving Credit Commitments then in effect or, if the
Revolving Credit Commitments have been terminated, the Total Revolving
Extensions of Credit then outstanding.
24
"Required Prepayment Lenders": the Majority Facility Lenders in
---------------------------
respect of each Facility.
"Requirement of Law": as to any Person, the Certificate of
------------------
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Responsible Officer": the chief executive officer, president or
-------------------
chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.
"Restricted Payments": as defined in Section 7.6.
-------------------
"Revolving Credit Commitment": as to any Lender, the obligation of
---------------------------
such Lender, if any, to make Revolving Credit Loans and participate in
Swing Line Loans and Letters of Credit (or guarantees by the Administrative
Agent in respect of Letters of Credit issued by Issuing Lenders which are
not Lenders), in an aggregate principal and/or face amount not to exceed
the amount set forth under the heading "Revolving Credit Commitment"
opposite such Lender's name on Schedule 1.1A, as the same may be changed
from time to time pursuant to the terms hereof. The original amount of the
Total Revolving Credit Commitments is $75,000,000.
"Revolving Credit Commitment Period": the period from and including
----------------------------------
the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Facility": as defined in the definition of
-------------------------
"Facility" contained in this Section 1.1.
---------
"Revolving Credit Lender": each Lender which has a Revolving Credit
-----------------------
Commitment or which is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
----------------------
"Revolving Credit Percentage": as to any Revolving Credit Lender at
---------------------------
any time, the percentage which such Lender's Revolving Credit Commitment
then constitutes of the Total Revolving Credit Commitments (or, at any time
after the Revolving Credit Commitments shall have expired or terminated,
the percentage which the aggregate principal amount of such Lender's
Revolving Extensions of Credit then outstanding constitutes of the
aggregate principal amount of the Revolving Extensions of Credit of all the
Revolving Credit Lenders then outstanding).
"Revolving Credit Termination Date": the Scheduled Revolving Credit
---------------------------------
Termination Date.
"Revolving Extensions of Credit": as to any Revolving Credit Lender
------------------------------
at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving
25
Credit Loans made by such Lender then outstanding, (b) such Lender's
Revolving Credit Percentage of the L/C Obligations then outstanding and (c)
such Lender's Revolving Credit Percentage of the aggregate principal amount
of Swing Line Loans then outstanding.
"Ripon Transition": collectively, (a) the establishment of the
----------------
capability to manufacture small-chassis frontload washers and dryers at the
manufacturing facility located in Ripon, Wisconsin and (b) the Disposition
by the Borrower and its Subsidiaries of Property located at the Ripon
facility on the Closing Date which is not intended to be used at the Ripon
facility after the establishment of the manufacturing capability described
in clause (a).
"Sale/Leaseback Transaction": as defined in Section 7.11.
--------------------------
"Scheduled Revolving Credit Termination Date": the fifth anniversary
-------------------------------------------
of the Closing Date.
"Securities Act": the Securities Act of 1933, as amended.
--------------
"Securitization Documentation": the collective reference to the
----------------------------
documentation pursuant to which any Permitted Receivables Financing
(including the Initial Receivables Facility) is established and maintained.
"Securitization Entity": as to the Borrower or any of its
---------------------
Subsidiaries, a corporation, partnership, trust, limited liability company
or other entity that is formed by the Borrower or such Subsidiary for the
purpose of purchasing or financing Receivables of the Borrower and/or its
Subsidiaries pursuant to any Permitted Receivables Financing and that is
designated as a "Securitization Entity" in a written notice delivered to
the Administrative Agent by the Borrower (including Alliance Commercial
Appliances Receivables LLC, Alliance Commercial Appliances Finance LLC and
Alliance Laundry Receivables Warehouse, LLC) so long as (a) such
corporation, partnership, trust, limited liability company or other entity
engages in no business and incurs no Indebtedness or other liabilities or
obligations other than those related to or incidental to the relevant
Permitted Receivables Financing, (b) neither the Borrower nor any
Subsidiary issues or incurs any Indebtedness or Guarantee Obligations
(other than Limited Originator Recourse) in respect of, or grants any Lien
on any of its assets or properties to secure, any Indebtedness, liabilities
or other obligations of such corporation, partnership, trust, limited
liability company or other entity or otherwise relating to such Permitted
Receivables Financing, (c) neither Holdings, the Borrower nor any of their
respective Subsidiaries has any material contract, agreement, arrangement
or understanding other than on terms no less favorable to Holdings, the
Borrower or such Subsidiary than those that might be obtained at that time
from Persons that are not Affiliates of the Borrower, other than fees
payable in the ordinary course of business in connection with servicing
receivables of such entity, and (d) neither Holdings, the Borrower nor any
of their respective Subsidiaries has any obligation to maintain such
entity's financial condition or cause such entity to achieve certain levels
of operating results.
26
"Security Documents": the collective reference to the Guarantee and
------------------
Collateral Agreement, the Mortgages and all other security documents
hereafter delivered to and accepted by the Administrative Agent granting a
Lien on any Property of any Person to secure the obligations and
liabilities of any Loan Party under any Loan Document.
"Seller Preferred Membership Interests": as defined in the recitals
-------------------------------------
to this Agreement.
"Seller Securities": as defined in the recitals to this Agreement.
-----------------
"Senior Subordinated Note Indenture": the indenture entered into by
----------------------------------
the Borrower and certain of its Subsidiaries in connection with the
issuance of the Senior Subordinated Notes on the Closing Date, together
with all instruments and other agreements entered into on the Closing Date
by the Borrower or such Subsidiaries in connection therewith, as the same
may be amended, supplemented or otherwise modified from time to time in
compliance with Section 7.9.
"Senior Subordinated Notes": the 9% Senior Subordinated Notes due
-------------------------
2008 issued pursuant to the Senior Subordinated Note Indenture and any
senior subordinated notes having the same terms and conditions as such
Senior Subordinated Notes issued in exchange for such Senior Subordinated
Notes pursuant to the Senior Subordinated Note Indenture, as the same may
be amended, supplemented or otherwise modified from time to time in
compliance with Section 7.9.
"Single Employer Plan": any Plan which is covered by Title IV of
--------------------
ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of
-------
any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the
amount of all "liabilities of such Person, contingent or otherwise", as of
such date, as such quoted terms are determined in accordance with
applicable federal and state laws governing determinations of the
insolvency of debtors, (b) the "present fair saleable value" (as determined
in accordance with applicable federal and state laws governing
determination of the insolvency of debtors) of the assets of such Person
will, as of such date, be greater than the amount that will be required to
pay the liability of such Person on its debts as such debts become absolute
and matured, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business,
and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) "debt" means liability on a "claim", (ii)
"claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or
(y) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured, and (iii) the Borrower may
assume, so long as no Default or Event of Default shall have occurred and
be continuing at the time such assumption is made, that all or a portion of
the
27
outstanding Term Loans or Indebtedness permitted under Section 7.2(f)
will be refinanced at the maturity thereof.
"Specified Change of Control": a "Change of Control" as defined in
---------------------------
the Senior Subordinated Note Indenture.
"Sponsor": Xxxx Capital, Inc.
-------
"Subordinated Seller Notes": as defined in the recitals to this
-------------------------
Agreement.
"Subsidiary": as to any Person, a corporation, partnership, limited
----------
liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, (a) all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower and (b) except as otherwise expressly provided
herein, for purposes of this Agreement, (i) no Securitization Entity shall
be a Subsidiary of the Borrower or Holdings and (ii) ALSA shall not be a
Subsidiary of the Borrower or Holdings unless the Administrative Agent and
the Borrower shall otherwise agree.
"Subsidiary Acquisition": any Investment (other than an Acquisition)
----------------------
which results in the creation or acquisition of a Subsidiary.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than
--------------------
any Excluded Subsidiary.
"Swing Line Commitment": the obligation of the Swing Line Lender to
---------------------
make Swing Line Loans pursuant to Section 2.6 in an aggregate principal
amount at any one time outstanding not to exceed $10,000,000.
"Swing Line Lender": General Electric Capital Corporation, in its
-----------------
capacity as the lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.6.
----------------
"Swing Line Participation Amount": as defined in Section 2.7(c).
-------------------------------
"Syndication Agent": as defined in the Preamble to this Agreement.
-----------------
"Tax Refund": as defined in Section 2.20(f).
----------
"Term Loan": as defined in Section 2.1.
---------
"Term Loan Commitment": as to each Term Loan Lender, the obligation
--------------------
of such Lender, if any, to make a Term Loan to the Borrower hereunder in a
principal amount
28
not to exceed the amount set forth under the heading "Term Loan Commitment"
opposite such Lender's name on Schedule 1.1A. The original aggregate amount
of the Term Loan Commitments is $200,000,000.
"Term Loan Facility": as defined in the definition of "Facility"
------------------
contained in this Section 1.1.
"Term Loan Lender": each Lender which has a Term Loan Commitment or
----------------
which is the holder of a Term Loan.
"Term Loan Percentage": as to any Lender at any time, the percentage
--------------------
which such Lender's Term Loan Commitment then constitutes of the aggregate
Term Loan Commitments (or, at any time after the Closing Date, the
percentage which the principal amount of such Lender's Term Loan then
outstanding constitutes of the aggregate principal amount of the Term Loans
then outstanding); provided, that solely for purposes of calculating the
--------
amount of each installment of Term Loans (other than the last installment)
payable to a Term Loan Lender pursuant to Section 2.3, such Term Loan
Lender's Term Loan Percentage shall be calculated without giving effect to
any portion of any prior mandatory or optional prepayment attributable to
such Term Loan Lender's Term Loans which shall have been declined by such
Term Loan Lender (or, in the case of any Term Loan Lender which shall have
acquired its Term Loans by assignment from another Person, by such other
Person).
"Total Revolving Credit Commitments": at any time, the aggregate
----------------------------------
amount of the Revolving Credit Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the aggregate
------------------------------------
amount of the Revolving Extensions of Credit of the Revolving Credit
Lenders outstanding at such time.
"Transferee": as defined in Section 10.14.
----------
"Type": as to any Loan, its nature as a Base Rate Loan or a
----
Eurodollar Loan.
"UCC Filing Collateral": Collateral (other than fixtures) as to which
---------------------
filing financing statements under the Uniform Commercial Code of the
applicable jurisdiction is an appropriate method of perfection of a
security interest in such Collateral.
"Uniform Customs": the Uniform Customs and Practice for Documentary
---------------
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
-----------------------
the Capital Stock of which (other than directors' qualifying shares
required by law and/or other nominal amounts of shares or other equity
interests required by law to be held other than by such Person) is owned by
such Person directly and/or through other Wholly Owned Subsidiaries.
29
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is
---------------------------------
a Wholly Owned Subsidiary of Holdings or the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
-----------------------------
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to Holdings, the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and conditions
---------------------
hereof each Term Loan Lender severally agrees to make a term loan (each, a "Term
----
Loan") to the Borrower on the Closing Date in an amount equal to the amount of
----
the Term Loan Commitment of such Lender. The Term Loans may from time to time
be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with Sections 2.2 and 2.13.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
---------------------------------
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, on the Closing
Date) requesting that the Term Loan Lenders make the Term Loans on the Closing
Date. The Term Loans made on the Closing Date shall initially be Base Rate
Loans, and no Term Loan may be converted into or continued as a Eurodollar Loan
with an Interest Period longer than one week prior to the date which is 30 days
after the Closing Date. Upon receipt of such notice the Administrative Agent
shall promptly notify each Term Loan Lender thereof. Not later than 12:00 Noon,
New York City time, on the Closing Date each Term Loan Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the Term Loan to be made by such Lender.
The Administrative Agent shall transfer to the account of the Borrower specified
by the Borrower the aggregate of the amounts made available to the
Administrative Agent by the Term Loan Lenders in immediately available funds.
30
2.3 Repayment of Term Loans. The Borrower shall pay to the
-----------------------
Administrative Agent, for the account of the Term Loan Lenders, the principal
amount of the Term Loans in twenty consecutive quarterly installments payable on
the last day of March, June, September and December of each year, commencing on
September 30, 2000, each of which shall be in an amount equal to the amount set
forth below opposite such installment (and, upon receipt thereof, the
Administrative Agent will distribute to each Term Loan Lender its Term Loan
Percentage of each such payment):
Installment Principal Amount
----------- ----------------
1-12 $250,000 per installment
13-16 10,000,000 per installment
17-20 39,250,000 per installment
2.4 Revolving Credit Commitments. (a) Subject to the terms and
----------------------------
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
----------------------
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's Revolving
Credit Percentage of the sum of (i) the L/C Obligations then outstanding and
(ii) the aggregate principal amount of the Swing Line Loans then outstanding,
does not exceed the amount of such Lender's Revolving Credit Commitment. During
the Revolving Credit Commitment Period, the Borrower may use the Revolving
Credit Commitments by borrowing, prepaying the Revolving Credit Loans in whole
or in part, and reborrowing, all in accordance with the terms and conditions
hereof. The Revolving Credit Loans may from time to time be Eurodollar Loans or
Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.5 and 2.13, provided that no
--------
Revolving Credit Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit Loans
on the Revolving Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing. The Borrower may
----------------------------------------
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give the
--------
Administrative Agent irrevocable notice (which notice may be given by telephone,
promptly confirmed by telecopy) (which notice must be received by the
Administrative Agent prior to 3:00 P.M., New York City time, (a) three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) one Business Day prior to the requested Borrowing Date, in the case of Base
Rate Loans) specifying (i) the amount and Type of Revolving Credit Loans to be
borrowed, (ii) the requested Borrowing Date, (iii) the account to which the
proceeds of such Loans should be transferred and (iv) in the case of Eurodollar
Loans, the respective length of the initial Interest Periods therefor. Any
Revolving Credit Loans made on the Closing Date shall initially be Base Rate
Loans, and no Revolving Credit Loan may be converted into or continued as a
Eurodollar Loan with an Interest Period longer than one week prior to the date
which is 30 days after the Closing Date. Each borrowing under the Revolving
Credit Commitments shall be in an amount equal to (x) in the case of Base Rate
Loans, at least $250,000 (or, if the then aggregate Available Revolving Credit
Commitments are less than $250,000, such lesser amount) and (y) in the case of
Eurodollar
31
Loans, $1,000,000 or a whole multiple of $100,000 in excess thereof;
provided, that (A) the Swing Line Lender may request, on behalf of the Borrower,
--------
borrowings under the Revolving Credit Commitments which are Base Rate Loans in
other amounts pursuant to Section 2.7 and (B) borrowings of Base Rate Loans
contemplated under Section 3.5 shall not be subject to the requirements of this
sentence. Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each Revolving Credit Lender thereof. Each
Revolving Credit Lender will make the amount of its pro rata share of each
--- ----
borrowing available to the Administrative Agent for the account of the Borrower
at the Funding Office prior to 12:00 Noon, New York City time, on the Borrowing
Date requested by the Borrower in Dollars and in funds immediately available to
the Administrative Agent. Such borrowing will then be made immediately
available on such day to the Borrower by the Administrative Agent transferring
to the account of the Borrower specified by the Borrower the aggregate of the
amounts made available to the Administrative Agent by the Revolving Credit
Lenders and in like funds as received by the Administrative Agent.
2.6 Swing Line Commitment. (a) Subject to the terms and conditions
---------------------
hereof, the Swing Line Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Credit Commitments from time to
time during the Revolving Credit Commitment Period by making swing line loans
("Swing Line Loans") to the Borrower; provided that (i) the aggregate principal
------------------ --------
amount of Swing Line Loans outstanding at any time shall not exceed the Swing
Line Commitment then in effect (notwithstanding that the Swing Line Loans
outstanding at any time, when aggregated with the Swing Line Lender's other
outstanding Revolving Credit Loans hereunder, may exceed the Swing Line
Commitment then in effect) and (ii) the Borrower shall not request, and the
Swing Line Lender shall not make, any Swing Line Loan if, after giving effect to
the making of such Swing Line Loan, the aggregate amount of the Available
Revolving Credit Commitments would be less than zero. During the Revolving
Credit Commitment Period, the Borrower may use the Swing Line Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof. Swing Line Loans shall be Base Rate Loans only.
(b) The Borrower shall repay all outstanding Swing Line Loans on the
Revolving Credit Termination Date.
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line
-----------------------------------------------------------
Loans. (a) Whenever the Borrower desires that the Swing Line Lender make Swing
Line Loans it shall give the Swing Line Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swing Line Lender not later than 1:30 P.M., New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed, (ii) the account to
which such amount should be transferred and (iii) the requested Borrowing Date
(which shall be a Business Day during the Revolving Credit Commitment Period).
Each borrowing under the Swing Line Commitment shall be in a minimum amount
equal to $50,000. Not later than 4:30 P.M., New York City time, on the Borrowing
Date specified in a notice in respect of Swing Line Loans, the Swing Line Lender
shall make available to the Administrative Agent at the Funding Office an amount
in Dollars and in immediately available funds equal to the amount of the Swing
Line Loan to be made by the Swing Line Lender. The Administrative Agent shall
make the proceeds of such Swing Line Loan available to the Borrower on such
Borrowing Date by transferring such proceeds to the account of the Borrower
specified by the Borrower on such Borrowing Date in immediately available funds.
32
(b) The Swing Line Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one Business
Day's notice to the Administrative Agent given by the Swing Line Lender no later
than 12:00 Noon, New York City time, request each Revolving Credit Lender to
make, and each Revolving Credit Lender hereby severally agrees to make, a
Revolving Credit Loan, in an amount equal to such Revolving Credit Lender's
Revolving Credit Percentage of the aggregate amount of the Swing Line Loans (the
"Refunded Swing Line Loans") outstanding on the date of such notice, to repay
-------------------------
the Swing Line Lender. Upon receipt of any such notice from the Swing Line
Lender, the Administrative Agent shall promptly notify the Revolving Credit
Lenders thereof. Each Revolving Credit Lender shall make the amount of such
Revolving Credit Loan available to the Administrative Agent at the Funding
Office in immediately available funds, not later than 10:00 A.M., New York City
time, one Business Day after the date of such notice. The proceeds of such
Revolving Credit Loans shall be immediately made available by the Administrative
Agent to the Swing Line Lender for application by the Swing Line Lender to the
repayment of the Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have otherwise
been made pursuant to Section 2.7(b), one of the events described in Section
8(f) shall have occurred and be continuing with respect to the Borrower or if
for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "Refunding Date"), purchase for cash an undivided participating interest in
--------------
the then outstanding Swing Line Loans by paying to the Swing Line Lender an
amount (the "Swing Line Participation Amount") equal to (i) such Revolving
-------------------------------
Credit Lender's Revolving Credit Percentage times (ii) the sum of the aggregate
-----
principal amount of Swing Line Loans then outstanding which were to have been
repaid with such Revolving Credit Loans.
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Lender's Swing Line Participation Amount,
the Swing Line Lender receives any payment on account of the Swing Line Loans,
the Swing Line Lender will distribute to such Lender its Swing Line
Participation Amount (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender's participating interest
was outstanding and funded and, in the case of principal and interest payments,
to reflect such Lender's pro rata portion of such payment if such payment is not
--- ----
sufficient to pay the principal of and interest on all Swing Line Loans then
due); provided, however, that in the event that such payment received by the
-------- -------
Swing Line Lender is required to be returned, such Revolving Credit Lender will
return to the Swing Line Lender any portion thereof previously distributed to it
by the Swing Line Lender.
(e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.7(b) and to purchase participating interests pursuant
to Section 2.7(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 2.5 or 5; (iii) any adverse change in the
condition (financial or otherwise) of the Borrower; (iv) any breach of this
33
Agreement or any other Loan Document by the Borrower, any other Loan Party or
any other Revolving Credit Lender; or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
2.8 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
------------------------------------
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Revolving Credit Lender, Term Loan Lender or the Swing Line
Lender, as the case may be, (i) the then unpaid principal amount of each
Revolving Credit Loan of such Revolving Credit Lender on the Revolving Credit
Termination Date (or such earlier date on which the Loans become due and payable
pursuant to Section 8), (ii) the then unpaid principal amount of each Swing Line
Loan of such Swing Line Lender on the Revolving Credit Termination Date (or such
earlier date on which the Loans become due and payable pursuant to Section 8)
and (iii) the principal amount of the Term Loan of such Term Loan Lender in
installments according to the amortization schedule set forth in Section 2.3 (or
on such earlier date on which the Loans become due and payable pursuant to
Section 8). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 2.15.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type thereof and each Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
----- -----
obligations of the Borrower therein recorded (absent manifest error); provided,
--------
however, that the failure of any Lender or the Administrative Agent to maintain
-------
the Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay (with applicable interest) the
Loans made to such Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing the Term Loan, Revolving Credit Loans
or Swing Line Loans, as the case may be, of such Lender, substantially in the
forms of Exhibit G-1, G-2 or G-3, respectively, with appropriate insertions as
to date and principal amount.
2.9 Commitment Fees, etc. (a) The Borrower agrees to pay to the
---------------------
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment
34
Period, computed at the Commitment Fee Rate on the average daily amount of the
Available Revolving Credit Commitment of such Lender during the period for which
payment is made, payable quarterly in arrears on the first day of each April,
July, October and January of each year, commencing on the first of such dates to
occur after the date hereof and on the Revolving Credit Termination Date.
(b) The Borrower agrees to pay to the Syndication Agent the fees in
the amounts and on the dates previously agreed to in writing by the Borrower and
the Syndication Agent.
(c) The Borrower agrees to pay to the Administrative Agent the fees
in the amounts and on the dates from time to time agreed to in writing by the
Borrower and the Administrative Agent.
2.10 Termination or Reduction of Revolving Credit Commitments. The
--------------------------------------------------------
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments; provided
--------
that no such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans and Swing Line Loans made on the effective date thereof,
the Total Revolving Extensions of Credit would exceed the Total Revolving Credit
Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a
whole multiple thereof, and shall reduce permanently the Revolving Credit
Commitments then in effect. Upon receipt of any such notice from the Borrower,
the Administrative Agent shall promptly notify each Revolving Credit Lender
thereof.
2.11 Optional Prepayments. The Borrower may at any time and from
--------------------
time to time prepay the Loans, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent prior to 12:00
Noon, New York City time, at least three Business Days prior thereto in the case
of Eurodollar Loans or prior to 12:00 Noon, New York City time, at least one
Business Day prior thereto in the case of Base Rate Loans (other than Swing Line
Loans) or prior to 12:00 Noon, New York City time, on the date of such
prepayment in the case of Swing Line Loans, which notice shall specify the date
and amount of prepayment and whether the prepayment is of Eurodollar Loans or
Base Rate Loans; provided, that if a Eurodollar Loan is prepaid on any day other
--------
than the last day of the Interest Period applicable thereto, the Borrower shall
also pay any amounts then due and owing pursuant to Section 2.21. Upon receipt
of any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with
(except in the case of Revolving Credit Loans which are Base Rate Loans and
Swing Line Loans) accrued interest to such date on the amount prepaid. Partial
prepayments of Term Loans and Revolving Credit Loans shall be in a minimum
principal amount of $250,000. Partial prepayments of Swing Line Loans shall be
in a minimum principal amount of $50,000.
2.12 Mandatory Prepayments and Commitment Reductions. (a) Unless
-----------------------------------------------
the Required Prepayment Lenders shall otherwise agree and without prejudice to
Section 7.2, if any Indebtedness is incurred by Holdings, the Borrower or any of
its Subsidiaries (excluding any Indebtedness incurred in accordance with Section
7.2 as in effect on the date of this Agreement), an amount equal to 100% of the
Net Cash Proceeds thereof shall be applied on the date of such
35
issuance or incurrence toward the prepayment of the Term Loans and the reduction
of the Revolving Credit Commitments as set forth in Section 2.12(d).
(b) Unless the Required Prepayment Lenders shall otherwise agree, if
on any date Holdings, the Borrower or any of its Subsidiaries shall receive Net
Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment
Notice shall be delivered in respect thereof within five Business Days
thereafter, 100% of such Net Cash Proceeds shall be applied on such fifth
Business Day toward the prepayment of the Term Loans and the reduction of the
Revolving Credit Commitments as set forth in Section 2.12(d); provided, that,
--------
notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of Asset
Sales (other than Asset Sales in connection with the Ripon Transition) that may
be excluded from the foregoing requirement pursuant to a Reinvestment Notice
shall not exceed $5,000,000 in any fiscal year of the Borrower, (ii) on each
Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event shall be applied toward
the prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.12(d) and (iii) for purposes of this
Section 2.12(b), the Net Cash Proceeds of any Asset Sale pursuant to Section
7.5(k) shall be equal to the lesser of (A) the amount of such Net Cash Proceeds
and (B) the aggregate amount of Investments made by Holdings, the Borrower or
any of their respective Subsidiaries in the relevant Foreign Subsidiary after
the Closing Date and, in no event, shall the Net Cash Proceeds of all Asset
Sales in respect of the Capital Stock of any Foreign Subsidiary for purposes of
this Section 2.12(b) exceed the aggregate amount of Investments made by
Holdings, the Borrower and their respective Subsidiaries in such Foreign
Subsidiary after the Closing Date.
(c) Unless the Required Prepayment Lenders shall otherwise agree, if,
for any fiscal year of the Borrower commencing with the fiscal year ending on or
about December 31, 1999, there shall be Excess Cash Flow, the Borrower shall, on
the relevant Excess Cash Flow Application Date, apply the ECF Percentage of such
Excess Cash Flow toward the prepayment of the Term Loans and the reduction of
the Revolving Credit Commitments as set forth in Section 2.12(d). Each such
prepayment and commitment reduction shall be made on a date (an "Excess Cash
-----------
Flow Application Date") no later than five Business Days after the earlier of
---------------------
(i) the date on which the financial statements of the Borrower referred to in
Section 6.1(a), for the fiscal year with respect to which such prepayment is
made, are required to be delivered to the Lenders and (ii) the date such
financial statements are actually delivered.
(d) Subject to Section 2.18, amounts to be applied in connection with
prepayments and Commitment reductions made pursuant to this Section shall be
applied, first, to the prepayment of the Term Loans and, second, to reduce
----- ------
permanently the Revolving Credit Commitments. Any such reduction of the
Revolving Credit Commitments shall be accompanied by prepayment of the Revolving
Credit Loans and/or Swing Line Loans to the extent, if any, that the Total
Revolving Extensions of Credit exceed the amount of the Total Revolving Credit
Commitments as so reduced, provided that if the aggregate principal amount of
--------
Revolving Credit Loans and Swing Line Loans then outstanding is less than the
amount of such excess (because L/C Obligations constitute a portion thereof),
the Borrower shall, to the extent of the balance of such excess, replace
outstanding Letters of Credit and/or deposit an amount in cash in a cash
collateral account established with the Administrative Agent for the benefit of
the Lenders on terms and conditions satisfactory to the Administrative Agent.
The application of any prepayment pursuant to this Section shall be made first
to Base Rate Loans and second to
36
Eurodollar Loans (in a manner, to the extent practicable and permitted
hereunder, which minimizes amounts payable under Section 2.21 as a result of
such prepayment). Each prepayment of the Loans under this Section (except in the
case of Revolving Credit Loans that are Base Rate Loans and Swing Line Loans)
shall be accompanied by accrued interest to the date of such prepayment on the
amount prepaid.
(e) Any prepayment of Loans and/or reduction of Commitments pursuant
to this Section, and the rights of the Lenders in respect thereof, are subject
to the provisions of Section 2.18.
2.13 Conversion and Continuation Options. (a) Subject to
-----------------------------------
Sections 2.2 and 2.5, the Borrower may elect from time to time to convert
Eurodollar Loans to Base Rate Loans by giving the Administrative Agent at least
two Business Days' prior irrevocable notice of such election. The Borrower may
elect from time to time to convert Base Rate Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no Base Rate Loan under a particular Facility
--------
may be converted into a Eurodollar Loan (i) when any Event of Default has
occurred and is continuing and the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
conversions or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
(b) Subject to Sections 2.2 and 2.5, any Eurodollar Loan may be
continued as such upon the expiration of the then current Interest Period with
respect thereto by the Borrower giving irrevocable notice to the Administrative
Agent, in accordance with the applicable provisions of the term "Interest
Period" set forth in Section 1.1, of the length of the next Interest Period to
be applicable to such Loans, provided that no Eurodollar Loan under a particular
--------
Facility may be continued as such (i) when any Event of Default has occurred and
is continuing and the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations or
(ii) after the date that is one month prior to the final scheduled termination
or maturity date of such Facility, and provided, further, that if the Borrower
-------- -------
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to Base Rate Loans on the last day of
such then expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches.
---------------------------------------------------------
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving effect
thereto, the minimum principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $100,000
in excess thereof and (b) no more than one Eurodollar Tranche shall be
outstanding at any time prior to the day which is 30 days after the Closing Date
and no more than eight Eurodollar Tranches shall be outstanding at any one time
thereafter.
37
2.15 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
--------------------------------
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) shall bear interest at a rate per annum
which is equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus 2%
----
or (y) in the case of Reimbursement Obligations, the rate applicable to Base
Rate Loans under the Revolving Credit Facility plus 2%, and (ii) if all or a
----
portion of any interest payable on any Loan or Reimbursement Obligation or any
commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall (to the extent permitted by applicable law) bear interest at a rate
per annum equal to the rate then applicable to Base Rate Loans under the
relevant Facility plus 2% (or, in the case of any such other amounts that do not
----
relate to a particular Facility, the rate then applicable to Base Rate Loans
under the Revolving Credit Facility plus 2%), in each case, with respect to
----
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
--------
shall be payable from time to time on demand.
2.16 Computation of Interest and Fees. (a) Interest, fees and
--------------------------------
commissions payable pursuant hereto shall be calculated on the basis of a 360-
day year for the actual days elapsed, except that, with respect to Base Rate
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders
of each determination of a Eurodollar Rate. Any change in the interest rate on
a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.15(a).
2.17 Inability to Determine Interest Rate. If prior to the first day
------------------------------------
of any Interest Period:
38
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower, absent
manifest error) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate in accordance with the terms thereof for such Interest
Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the first day of such Interest Period,
to Base Rate Loans. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans under the relevant Facility shall be made or
continued as such, nor shall the Borrower have the right to convert Loans under
the relevant Facility to Eurodollar Loans. The Administrative Agent shall
withdraw (i) any such notice pursuant to clause (a) above if the Administrative
Agent determines that the relevant circumstances have ceased to exist and (ii)
any such notice pursuant to clause (b) above upon receipt of notice from the
Majority Facility Lenders in respect of the relevant Facility that the relevant
circumstances described in such clause (b) have ceased to exist.
2.18 Pro Rata Treatment and Payments. (a) Each borrowing by the
-------------------------------
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Term Loan Percentages or Revolving
--- ----
Credit Percentages, as the case may be, of the relevant Lenders. Each payment
(other than prepayments) in respect of principal or interest in respect of the
Loans, each payment in respect of fees payable hereunder, and each payment in
respect of Reimbursement Obligations, shall be applied to the amounts of such
obligations owing to the Lenders pro rata according to the respective amounts
--- ----
then due and owing to the Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans shall be made pro rata
--- ----
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Loan Lenders (except as otherwise provided in Section 2.18(d)).
The amount of each principal prepayment of the Term Loans shall be applied to
reduce the then remaining installments of the Term Loans, pro rata based upon
--- ----
the then remaining principal amount thereof. Amounts prepaid on account of the
Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans shall be made
pro rata according to the respective outstanding principal amounts of the
--- ----
Revolving Credit Loans then held by the Revolving Credit Lenders.
39
(d) Notwithstanding anything to the contrary in Section 2.12 or this
Section, after the aggregate principal amount of the Term Loans has been reduced
to $150,000,000, each Term Loan Lender may, at its option, decline all or any
portion of any mandatory prepayment applicable to the Term Loans of such Lender;
accordingly, with respect to the amount of any mandatory prepayment described in
Section 2.12 that is allocated to the Term Loans (such amounts, the "Prepayment
----------
Amount") the Borrower will, in lieu of applying such amount to the prepayment of
------
Term Loans as provided in Section 2.12(d), on the date specified in Section 2.12
for such prepayment, give the Administrative Agent telephonic notice (promptly
confirmed in writing) of the aggregate amount required to be applied to prepay
Term Loans and requesting that the Administrative Agent prepare and provide to
each Term Loan Lender a notice (each, a "Prepayment Option Notice") as described
------------------------
below. As promptly as practicable after receiving such notice from the
Borrower, the Administrative Agent will send to each Term Loan Lender a
Prepayment Option Notice, which shall be in the form of Exhibit H and shall
include an offer by the Borrower to prepay on the date (each a "Prepayment
----------
Date") that is 10 Business Days after the date of the Prepayment Option Notice,
the Term Loan of such Term Loan Lender by an amount equal to the portion of the
Prepayment Amount indicated in such Lender's Prepayment Option Notice as being
applicable to such Lender's Term Loans. On the Prepayment Date, (i) the
Borrower shall pay to the Administrative Agent the aggregate amount necessary to
prepay that portion of the outstanding relevant Term Loans in respect of which
Lenders have accepted full or partial prepayment as described above (such
Lenders, the "Accepting Lenders") as notified by the Administrative Agent to the
-----------------
Borrower, and such amount shall be applied to reduce the Prepayment Amounts, as
applicable, with respect to each Accepting Lender, (ii) the Revolving Credit
Commitments shall be reduced by an amount equal to 50% of the portion of the
Prepayment Amount not accepted by the Term Loan Lenders (and, such reduction
shall be accompanied by prepayment of the Revolving Credit Loans and/or Swing
Line Loans to the extent, if any, that the Total Revolving Extensions of Credit
exceed the amount of the Total Revolving Credit Commitments as so reduced,
provided that if the aggregate principal amount of Revolving Credit Loans and
--------
Swing Line Loans then outstanding is less than the amount of such excess
(because L/C Obligations constitute a portion thereof), the Borrower shall, to
the extent of the balance of such excess, replace outstanding Letters of Credit
and/or deposit an amount in cash in a cash collateral account established with
the Administrative Agent for the benefit of the Lenders on terms and conditions
satisfactory to the Administrative Agent) and (iii) the Borrower shall be
entitled to retain the remaining 50% of the portion of the Prepayment Amount not
accepted by the Lenders.
(e) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 2:00 P.M., New
York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Payment Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any
40
payment of principal pursuant to the preceding two sentences, interest thereon
shall be payable at the then applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, but shall not be required to, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount is not made
available to the Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon at a rate equal to the daily average Federal Funds
Effective Rate for the period until such Lender makes such amount immediately
available to the Administrative Agent. A certificate of the Administrative
Agent submitted to any Lender with respect to any amounts owing under this
paragraph shall be presumed correct in the absence of manifest error. If such
Lender's share of such borrowing is not made available to the Administrative
Agent by such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with interest
thereon at the rate per annum applicable to Base Rate Loans under the relevant
Facility, on the Business Day following the date of demand, from the Borrower.
(g) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
--- ----
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.19 Requirements of Law. (a) If the adoption of or any change in
-------------------
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application or
any Eurodollar Loan made by it, or change the basis of taxation of payments
to such Lender in respect thereof (except for Non-Excluded Taxes covered by
Section 2.20 and changes in the rate of tax on the overall net income or
profits of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
41
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
within 10 days of its demand therefor, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable. If
any Lender becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event in reasonable detail by reason of which it
has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor setting forth in reasonable detail the
basis therefor, the Borrower shall pay to such Lender within 10 days after
receipt of such request such additional amount or amounts as will compensate
such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.19 or Section 2.21, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled, provided that no Lender shall be entitled to
--------
claim any such additional amount with respect to the period which is more than
180 days prior to the delivery of such notice. A certificate as to any
additional amounts payable pursuant to this Section 2.19 or Section 2.21
submitted by such Lender to the Borrower (with a copy to the Administrative
Agent) setting forth in reasonable detail the calculation of such amounts and
the basis therefor shall be presumptively correct in the absence of manifest
error. The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
2.20 Taxes. (a) Except as otherwise provided herein, all payments
-----
made by the Borrower under this Agreement shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on any Agent or any Lender
as a result of a present or former connection between such Agent or such Lender
and the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely and directly from such Agent or such Lender
having executed, delivered or performed its obligations or received a payment
42
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
------------------
from any amounts payable to any Agent or any Lender hereunder, the amounts so
payable to such Agent or such Lender shall be increased to the extent necessary
to yield to such Agent or such Lender (after payment of all Non-Excluded Taxes
and Other Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement, provided, however, that the
-------- -------
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to such
Lender's failure to comply with the requirements of paragraph (d) or (e) of this
Section or (ii) that are United States withholding taxes imposed on amounts
payable to such Lender or Participant at the time the Lender or Participant
becomes a party to this Agreement, except to the extent that such Lender's
assignor (if any) was entitled, at the time of assignment, to receive additional
amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to
Section 2.20(a).
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agents and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure. The agreements in this
Section 2.20 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a United States Person as
defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver
---------------
to the Borrower and the Administrative Agent (or, in the case of a Participant,
to the Lender from which the related participation shall have been purchased)
two copies of either U.S. Internal Revenue Service Form 1001 or Form 4224, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest" a statement substantially in the form of
Exhibit I and a Form W-8, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents,
together with any other certificate or statement of exemption required under the
Codes or Regulations issued thereunder. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of any Participant, on or before the date such Participant purchases
the related participation). In addition, each Non-U.S. Lender shall deliver
such forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of
43
this paragraph, a Non-U.S. Lender shall not be required to deliver any form
pursuant to this paragraph that such Non-U.S. Lender is not legally able to
deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
--------
legally entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(f) If the Administrative Agent or any Lender receives a refund or
otherwise would have received a refund but for the offset of the amount of such
refund against the Lender's Non-Excluded Taxes ("Tax Refund"), which in the good
----------
faith judgment of such Lender is allocable to Non-Excluded Taxes paid by the
Borrower, it shall promptly pay such Tax Refund to the Borrower, net of all out-
of-pocket expenses of such Lender incurred in obtaining such Tax Refund,
provided, however, that the Borrower agrees to promptly return such Tax Refund
-------- -------
to the Administrative Agent or the applicable Lender, as the case may be, if it
receives notice from the Administrative Agent or applicable Lender that such
Administrative Agent or Lender is required to repay such Tax Refund but only if
such repayment is required because the initial Tax Refund was permitted in
error.
2.21 Indemnity. The Borrower agrees to indemnify each Lender and to
---------
hold each Lender harmless from any loss or expense (other than any loss of
Applicable Margin) which such Lender may sustain or incur as a consequence of
(a) default by the Borrower in making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day which is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
----
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section submitted to the Borrower by any Lender
shall be presumptively correct in the absence of manifest error. This covenant
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
44
2.22 Illegality. Notwithstanding any other provision herein, if the
----------
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be cancelled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs
on a day which is not the last day of the then current Interest Period with
respect thereto, the Borrower shall pay to such Lender such amounts, if any, as
may be required pursuant to Section 2.21.
2.23 Change of Lending Office. Each Lender agrees that, upon the
------------------------
occurrence of any event giving rise to the operation of Section 2.19 or 2.20(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
--------
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
-------- -------
or postpone any of the obligations of any Borrower or the rights of any Lender
pursuant to Section 2.19 or 2.20(a).
2.24 Replacement of Lenders under Certain Circumstances. The
--------------------------------------------------
Borrower shall be permitted to (a) replace any Lender which (i) defaults in its
obligation to make Loans hereunder, (ii) is not required to make Eurodollar
Loans pursuant to Section 2.22 or (iii) in connection with any proposed
amendment, modification, supplement or waiver with respect to any of the
provisions of the Loan Documents as contemplated in Section 10.1 where such
amendment, modification, supplement or waiver has been approved by the Required
Lenders (and, if applicable, the Required Prepayment Lenders and/or Majority
Facility Lenders) in accordance with such Section, fails to consent to any such
proposed action and (b) replace or remove any Lender which requests
reimbursement for amounts owing pursuant to Section 2.19 or 2.20 and, if the
Borrower elects to remove such Lender, terminate such Lender's Revolving Credit
Commitment hereunder; provided that (A) (i) such replacement or removal, as the
--------
case may be, does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement or
removal, as the case may be, (iii) prior to any such replacement or removal, as
the case may be, pursuant to clause (b) above such Lender shall have taken no
action under Section 2.23 so as to eliminate the continued need for payment of
amounts owing pursuant to Section 2.19 or 2.20, (iv) the Borrower shall be
liable to such replaced or removed Lender under Section 2.21 if any Eurodollar
Loan owing to such replaced Lender shall be purchased other than on the last day
of the Interest Period relating thereto and (v) any such replacement or removal,
as the case may be, shall not be deemed to be a waiver of any rights which the
Borrower, the Administrative Agent or any other Lender shall have against the
replaced or removed Lender, (B) in the case of replacement of a Lender under
this Section 2.24, (i) the replacement financial institution shall purchase, at
par, all Loans and other amounts owing to such replaced Lender on or prior to
the date of replacement, (ii) the replacement financial institution, if not
already a Lender, shall be reasonably satisfactory to the Administrative Agent,
(iii) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of Section 10.6 (provided that no registration
and processing fee
45
referred to therein shall be required to be paid in connection therewith), and
(iv) until such time as such replacement shall be consummated, the Borrower
shall pay all additional amounts (if any) required pursuant to Section 2.19 or
2.20, (C) if the Borrower elects to remove a Lender under clause (b) of this
Section 2.24 and if such Lender has any Loans outstanding at such time, the
consent of the Administrative Agent and the Required Lenders shall be required
to terminate such Lender's Revolving Credit Commitment and (D) in the case of
replacement of a non-consenting Lender under clause (a)(iii) of this Section
2.24, the Borrower shall replace such Lender within 60 days of such Lender's
failure to consent to the proposed action.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
--------------
(i) each Issuing Lender which is a Lender, in reliance on the agreements of the
other Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue
letters of credit ("Letters of Credit") for the account of the Borrower on any
-----------------
Business Day during the Revolving Credit Commitment Period in such form as may
be approved from time to time by such Issuing Lender and (ii) in the event no
Issuing Lender is a Lender, the Administrative Agent, in reliance on the
agreements of the other Revolving Credit Lenders set forth in Section 3.4(a),
agrees to cause Letters of Credit to be issued by an Issuing Lender for the
account of the Borrower on any Business Day during the Revolving Credit
Commitment Period in such form as may be approved from time to time by such
Issuing Lender; provided that no Issuing Lender shall have any obligation to nor
--------
shall any Issuing Lender issue any Letter of Credit and the Administrative Agent
shall not have any obligation to and shall not cause any Letter of Credit to be
issued if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the aggregate amount of the Available
Revolving Credit Commitments would be less than zero. Each Letter of Credit
shall (i) be denominated in Dollars and (ii) expire no later than the earlier of
(x) the first anniversary of its date of issuance and (y) the date which is five
Business Days prior to the Scheduled Revolving Credit Termination Date, provided
--------
that any Letter of Credit with a one-year term may provide for the renewal
thereof for additional one-year periods (which shall in no event extend beyond
the date referred to in clause (y) above).
(b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(c) No Issuing Lender shall at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause such
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law. The Administrative Agent shall not at any time
be obligated to cause any Letter of Credit to be issued hereunder if such
issuance would conflict with, or cause the Administrative Agent, such Issuing
Lender or any L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower may
------------------------------------------
from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender and the Administrative Agent at their
respective addresses for notices specified herein an Application therefor,
completed to the satisfaction of the relevant Issuing Lender and the
Administrative Agent, and such other certificates, documents and other papers
and information as
46
the Issuing Lender or the Administrative Agent may request. In the case of any
Letter of Credit to be issued by an Issuing Lender which is a Lender, upon
receipt of any Application, such Issuing Lender will process such Application
and the certificates, documents and other papers and information delivered to it
in connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall
such Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed to by such Issuing Lender and the Borrower. In the case
of any Letter of Credit not to be issued by an Issuing Lender which is a Lender,
upon receipt of any Application, the Administrative Agent shall cause such
Issuing Lender to process such Application and the certificates, documents and
other papers and information delivered to it in connection therewith in
accordance with its customary procedures and to promptly issue the Letter of
Credit requested thereby (but in no event shall the Administrative Agent be
required to cause such Issuing Lender to issue any Letter of Credit earlier than
three Business Days after its receipt of the Application therefor and all such
other certificates, documents and other papers and information relating thereto)
by issuing the original of such Letter of Credit to the beneficiary thereof or
as otherwise may be agreed to by the Administrative Agent and the Borrower. The
relevant Issuing Lender shall furnish a copy of such Letter of Credit to the
Borrower and the Administrative Agent promptly following the issuance thereof.
The Issuing Lender shall promptly furnish to the Administrative Agent, which
shall in turn promptly furnish to the Lenders, notice of the issuance of each
Letter of Credit (including the amount and expiration date thereof).
3.3 Fees and Other Charges. (a) The Borrower will pay a fee on the
----------------------
undrawn face amount of all outstanding Letters of Credit at a per annum rate
equal to the Applicable Margin then in effect with respect to Eurodollar Loans
under the Revolving Credit Facility, shared ratably among the Revolving Credit
Lenders and payable quarterly in arrears on each L/C Fee Payment Date after the
issuance date. In addition, (i) in the case of any Letter of Credit issued by
an Issuing Lender which is a Lender, the Borrower shall pay to such Issuing
Lender for its own account a fronting fee on the undrawn face amount of all
outstanding Letters of Credit issued by such Issuing Lender at a rate per annum
of 0.25%, payable quarterly in arrears on each L/C Fee Payment Date after the
issuance date and (ii) in the case of any Letter of Credit issued by an Issuing
Lender which is not a Lender, the Borrower shall pay to the Administrative Agent
for its own account a fronting fee on the undrawn face amount of all outstanding
Letters of Credit issued by such Issuing Lender which is not a Lender at a rate
per annum to be agreed by the Administrative Agent and the Borrower payable
quarterly in arrears on each L/C Fee Payment Date after the issuance date.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse each Issuing Lender for such normal, reasonable and customary costs
and expenses as are incurred or charged by such Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit issued by it.
3.4 L/C Participations. (a) (i) In the case of Letters of Credit
------------------
issued by an Issuing Lender which is a Lender, such Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce such
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts
47
and purchases from such Issuing Lender, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's Revolving Credit Percentage in such Issuing
Lender's obligations and rights under each Letter of Credit issued by such
Issuing Lender hereunder and the amount of each draft paid by such Issuing
Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees
with each such Issuing Lender that, if a draft is paid under any Letter of
Credit for which such Issuing Lender is not reimbursed in full by the Borrower
in accordance with the terms of this Agreement, such L/C Participant shall pay
to such Issuing Lender upon demand at such Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Revolving Credit
Percentage of the amount of such draft, or any part thereof, which is not so
reimbursed.
(ii) In the case of Letters of Credit issued by an Issuing Lender
which is not a Lender, the Administrative Agent irrevocably agrees to grant and
hereby grants to each L/C Participant, and, to induce the Administrative Agent
to cause such Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Administrative Agent, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's Revolving Credit Percentage in the
Administrative Agent's obligations and rights under each such Letter of Credit
issued hereunder and the amount of each payment made by the Administrative Agent
in respect of any draft paid by such Issuing Lender thereunder. Each L/C
Participant unconditionally and irrevocably agrees with the Administrative Agent
that, if the Administrative Agent makes a payment in respect of a draft paid
under any such Letter of Credit for which the Administrative Agent is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Administrative Agent upon
demand at the Administrative Agent's address for notices specified herein an
amount equal to such L/C Participant's Revolving Credit Percentage of the amount
of such payment, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant pursuant
to Section 3.4(a) in respect of any unreimbursed portion of any payment made by
the relevant Issuing Lender or the Administrative Agent, as the case may be,
under any Letter of Credit is paid to the relevant Issuing Lender or the
Administrative Agent, as the case may be, within three Business Days after the
date such payment is due (provided that demand for payment is received prior to
2:00 P.M., New York City time), such L/C Participant shall pay to the relevant
Issuing Lender or the Administrative Agent, as the case may be, on demand an
amount equal to the product of (i) such amount, times (ii the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the Issuing Lender, times (ii a fraction the numerator of which is the number
of days that elapse during such period and the denominator of which is 360. If
any such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to the relevant Issuing Lender or the
Administrative Agent, as the case may be, by such L/C Participant within three
Business Days after the date such payment is due, such Issuing Lender or the
Administrative Agent, as the case may be, shall be entitled to recover from such
L/C Participant, on demand, such amount with interest thereon calculated from
such due date at the rate per annum applicable to Base Rate Loans under the
Revolving Credit Facility. A certificate of the relevant Issuing Lender or the
Administrative Agent submitted to any L/C
48
Participant with respect to any amounts owing under this Section shall be
presumed correct in the absence of manifest error.
(c) Whenever, at any time after an Issuing Lender or the
Administrative Agent has made payment under or in respect of any Letter of
Credit and has received from any L/C Participant its pro rata share of such
--- ----
payment in accordance with Section 3.4(a), such Issuing Lender or the
Administrative Agent receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by the relevant Issuing Lender or the Administrative
Agent, as the case may be), or any payment of interest on account thereof, such
Issuing Lender or the Administrative Agent, as the case may be, will distribute
to such L/C Participant its pro rata share thereof; provided, however, that in
--- ---- -------- -------
the event that any such payment received by such Issuing Lender or the
Administrative Agent shall be required to be returned by such Issuing Lender or
the Administrative Agent, as the case may be, such L/C Participant shall return
to such Issuing Lender or the Administrative Agent, as the case may be, the
portion thereof previously distributed by such Issuing Lender or the
Administrative Agent, as the case may be, to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower agrees,
----------------------------------------
in accordance with the terms of the provisions of this Section, to reimburse (a)
in the case of any Letter of Credit issued by an Issuing Lender which is a
Lender, such Issuing Lender for the amount of (i) such draft so paid and (ii)
any taxes, fees, charges or other costs or expenses incurred by the Issuing
Lender in connection with such payment and (b) in the case of any Letter of
Credit issued by an Issuing Lender which is not a Lender, the Administrative
Agent for the amount of any payment made by the Administrative Agent in respect
of any drawing under any such Letter of Credit. Each such payment shall be made
to the relevant Issuing Lender or the Administrative Agent, as the case may be,
at its address for notices specified herein in lawful money of the United States
of America and in immediately available funds. If any draft shall be presented
for payment under any Letter of Credit, (a) in the case of any Letter of Credit
issued by an Issuing Lender which is a Lender, such Issuing Lender shall
promptly notify the Borrower of the date and amount thereof and (b) in the case
of any Letter of Credit issued by an Issuing Lender which is not a Lender, the
Administrative Agent shall promptly notify the Borrower of the date and amount
thereof. If the relevant Issuing Lender or the Administrative Agent, as the
case may be, notifies the Borrower prior to 12:00 Noon, New York City time, on
any Business Day, of any drawing under any Letter of Credit, the Borrower shall
reimburse such Issuing Lender or the Administrative Agent, as the case may be,
pursuant to this Section with respect to such drawing on the next Business Day.
If the relevant Issuing Lender or the Administrative Agent, as the case may be,
notifies the Borrower after 12:00 Noon, New York City time, on any Business Day
of any drawing under any Letter of Credit, the Borrower shall reimburse such
Issuing Lender or the Administrative Agent, as the case may be, pursuant to this
Section with respect to such drawing on the second succeeding Business Day.
Interest shall be payable on any and all amounts remaining unpaid by the
Borrower under this Section from the date of the related drawing until payment
in full at the rate set forth in (i) until the second Business Day following the
date of such drawing, Section 2.15(b) and (ii) thereafter, Section 2.15(c).
Each drawing under any Letter of Credit shall (unless an event of the type
described in clause (i) or (ii) of Section 8(f) shall have occurred and be
continuing with respect to the Borrower, in which case the procedures specified
in Section 3.4 for funding by L/C Participants shall apply) constitute a request
by the Borrower to the Administrative Agent for a borrowing pursuant to Section
2.5 of Base Rate Loans (or, at the option of the Administrative Agent and the
Swing Line Lender in
49
their sole discretion, a borrowing pursuant to Section 2.7 of Swing Line Loans)
in the amount of such drawing. The Borrowing Date with respect to such borrowing
shall be the date of such drawing.
3.6 Obligations Absolute. Except as otherwise provided in this
--------------------
Section, the Borrower's obligations under this Section 3 shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower may have or have had
against any Issuing Lender, the Administrative Agent, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lenders and the Administrative Agent that the Issuing Lenders and the
Administrative Agent shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing
Lenders and the Administrative Agent shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions resulting from the gross negligence or willful
misconduct of the relevant Issuing Lender or the Administrative Agent, as the
case may be. The Borrower agrees that any action taken or omitted by the
Issuing Lenders and the Administrative Agent under or in connection with any
Letter of Credit or the related drafts or documents, if done in the absence of
gross negligence or willful misconduct and in accordance with the standards of
care specified in the Uniform Customs and the Uniform Commercial Code of the
State of New York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lenders or the Administrative Agent to the Borrower.
3.7 Letter of Credit Payments. The responsibility of the Issuing
-------------------------
Lenders to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
3.8 Applications. To the extent that any provision of any
------------
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans and issue or participate in the Letters of Credit, Holdings
and the Borrower hereby jointly and severally represent and warrant to each
Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma consolidated
------------------- --- -----
balance sheet of the Borrower and its consolidated Subsidiaries as at December
31, 1997 (including the notes thereto) (the "Pro Forma Balance Sheet"), copies
-----------------------
of which have heretofore been furnished to
50
each Lender, has been prepared giving effect (as if such events had occurred on
such date) to (i) the consummation of the Recapitalization, including the Loans
to be made and the Senior Subordinated Notes and Seller Securities to be issued
on the Closing Date and the use of proceeds thereof and (ii) the payment of fees
and expenses in connection with the foregoing. The Pro Forma Balance Sheet has
been prepared based on the best information reasonably available to Holdings and
the Borrower as of the date of delivery thereof and on good faith estimates and
assumptions believed to be reasonable at the time made, and presents fairly in
all material respects on a pro forma basis the estimated financial position of
--- -----
the Borrower and its consolidated Subsidiaries as at December 31, 1997, assuming
that the events specified in the preceding sentence had actually occurred at
such date.
(b) The audited combined statements of assets, liabilities and parent
company investment of the Commercial Laundry Business of Raytheon as at December
31, 1996 and December 31, 1997, and the related combined statements of income,
of parent company investment and of cash flows for the fiscal years ended on
such dates, reported on by and accompanied by an unqualified report from Coopers
& Xxxxxxx L.L.P., present fairly in all material respects the combined financial
condition of the Commercial Laundry Business of Raytheon as at such date, and
the combined results of its operations and its combined cash flows for the
respective fiscal years then ended. The unaudited combined statement of assets,
liabilities and parent company investment of the Commercial Laundry Business of
Raytheon as at March 31, 1998, and the related unaudited combined statements of
income, of parent company investment and cash flows for the three-month period
ended on such date, present fairly in all material respects the combined
financial condition of the Commercial Laundry Business of Raytheon as at such
date, and the combined results of its operations and its combined cash flows for
the three-month period then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein and for the absence of
certain notes thereto). As of the Closing Date after giving effect to the
Recapitalization, Holdings, the Borrower and its Subsidiaries own substantially
all of the assets used in connection with the conduct of the Commercial Laundry
Business of Raytheon prior to the Closing Date. Except as set forth on Schedule
4.1(b), as of the Closing Date, Holdings, the Borrower and their respective
Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities or liabilities for taxes, or any long-term leases or unusual forward
or long-term commitments, including, without limitation, any interest rate or
foreign currency swap or exchange transaction or other obligation in respect of
derivatives, which are not reflected in the most recent financial statements
referred to in this paragraph but which would in accordance with GAAP be so
reflected in a consolidated balance sheet of the Borrower as of the Closing
Date.
4.2 No Change. Since December 31, 1997 there has been no development
---------
or event which has had or could reasonably be expected to have a Material
Adverse Effect (it being understood that the consummation of the
Recapitalization on the Closing Date shall not constitute or be deemed to have a
Material Adverse Effect). As of the Closing Date, there has been no development
or event which has had or could reasonably be expected to have a material
adverse effect on the Recapitalization.
4.3 Existence; Compliance with Law. Each of Holdings, the Borrower
------------------------------
and their respective Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws
51
of the jurisdiction of its organization, (b) has the power and authority, and
the legal right, to own and operate its Property, to lease the Property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of Property or
the conduct of its business requires such qualification, except to the extent
the failure to be so qualified and/or in good standing could not reasonably be
expected to have a Material Adverse Effect, and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
4.4 Power; Authorization; Enforceable Obligations. Each Loan Party
---------------------------------------------
has the power and authority, and the legal right, to make, deliver and perform
the Loan Documents to which it is a party and, in the case of the Borrower, to
borrow hereunder. Each Loan Party has taken all necessary corporate action to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party and, in the case of the Borrower, to authorize the borrowings on
the terms and conditions of this Agreement. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the
Recapitalization or the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the other
Loan Documents, except (i) consents, authorizations, filings and notices
described in Schedule 4.4 or 8.2 to the Merger Agreement, which consents,
authorizations, filings and notices have been obtained or made and (except as
otherwise disclosed on such Schedule) are in full force and effect, (ii) other
consents required in connection with the Recapitalization, the failure to obtain
which could not reasonably be expected to have a Material Adverse Effect, (iii)
the filings referred to in Section 4.19 and (iv) consents, authorizations,
filings and notices required after the Closing Date in the ordinary course of
business which have been obtained or made and are in full force and effect.
Each Loan Document has been duly executed and delivered on behalf of each Loan
Party party thereto. This Agreement and each other Loan Document constitutes a
legal, valid and binding obligation of each Loan Party party thereto,
enforceable against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of this
------------
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of Holdings, the Borrower or
any of their respective Subsidiaries and will not result in, or require, the
creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Security Documents). No Contractual
Obligation applicable to the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
4.6 No Material Litigation. Except as disclosed on Schedule 4.6, no
----------------------
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of Holdings or the
Borrower, threatened by or against Holdings, the Borrower or any of their
respective Subsidiaries or against any of their respective properties or
revenues (a)
52
with respect to any of the Loan Documents or (b) which could reasonably be
expected to have a Material Adverse Effect.
4.7 No Default. Neither Holdings, the Borrower nor any of their
----------
respective Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
4.8 Ownership of Property; Liens. Each of Holdings, the Borrower and
----------------------------
their respective Subsidiaries has title in fee simple to, or a valid leasehold
interest in, all its material real property, and good title to, or a valid
leasehold interest in, all its other Property material to the conduct of its
Business, and none of such Property is subject to any Lien except as permitted
by Section 7.3.
4.9 Intellectual Property. Holdings, the Borrower and each of their
---------------------
respective Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted, except for any
failure to so own or license Intellectual Property which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
No claim has been asserted and is pending by any Person against Holdings, the
Borrower or any of their respective Subsidiaries challenging or questioning the
use of any Intellectual Property by Holdings, the Borrower or any of their
respective Subsidiaries or the validity or effectiveness of any Intellectual
Property used by Holdings, the Borrower or any of their respective Subsidiaries,
except for any claims which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. The use of
Intellectual Property by Holdings, the Borrower and their respective
Subsidiaries does not infringe on the rights of any Person in any material
respect and in any manner which could reasonably be expected to have a Material
Adverse Effect.
4.10 Taxes. Each of Holdings, the Borrower and each of their
-----
respective Subsidiaries has filed or caused to be filed all Federal, state and
other material tax returns which are required to be filed and has paid all
material taxes shown to be due and payable on said returns prior to the date
penalties or interest attach thereto or on any assessments made against it or
any of its Property and all other material taxes, fees or other charges imposed
on it or any of its Property by any Governmental Authority (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Holdings, the Borrower or their
respective Subsidiaries, as the case may be); no tax Lien has been filed which
is not permitted under Section 7.3, and, to the knowledge of Holdings and the
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge.
4.11 Federal Regulations. No part of the proceeds of any Loans will
-------------------
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under or Regulation U as now and from time
to time hereafter in effect or for any purpose which violates the provisions of
the Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 referred to in Regulation U.
53
4.12 Labor Matters. There are no strikes or other labor disputes
-------------
against Holdings, the Borrower or any of their respective Subsidiaries pending
or, to the knowledge of Holdings or the Borrower, threatened that (individually
or in the aggregate) could reasonably be expected to have a Material Adverse
Effect. Hours worked by and payment made to employees of Holdings, the Borrower
and their respective Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters that (individually or in the aggregate) could reasonably be expected to
have a Material Adverse Effect. All payments due from Holdings, the Borrower or
any of their respective Subsidiaries on account of employee health and welfare
insurance that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect if not paid have been paid or accrued as a
liability on the books of Holdings, the Borrower or the relevant Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
-----
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan (based
on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan
which has resulted or could reasonably be expected to result in a material
liability under ERISA, and neither the Borrower nor any Commonly Controlled
Entity would become subject to any material liability under ERISA if the
Borrower or any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. No such Multiemployer Plan
is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan Party is an
-----------------------------------------
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
------------
constitute all the Subsidiaries of Holdings and the Borrower at the date hereof.
4.16 Use of Proceeds. The proceeds of the Term Loans shall be used
---------------
to finance the Recapitalization and to pay related fees and expenses. The
proceeds of the Revolving Credit Loans and the Swing Line Loans, and the Letters
of Credit, shall be used to finance a portion of the Recapitalization and to pay
related fees and expenses and for general corporate and working capital
purposes.
4.17 Environmental Matters. Except as set forth on Schedule 4.17:
---------------------
54
(a) The facilities and properties owned, leased or operated by
Holdings, the Borrower or any of their respective Subsidiaries (the
"Properties") do not contain any Materials of Environmental Concern in amounts
----------
or concentrations or under circumstances which (i) constitute a violation of, or
(ii) could give rise to liability under, any Environmental Law, except in either
case insofar as such violation or liability, or any aggregation thereof, could
not reasonably be expected to result in a Material Adverse Effect.
(b) The Properties and all operations at the Properties are in
compliance, and have in the last five years been in material compliance, with
all applicable Environmental Laws,except for any failures to comply which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, and there is no contamination at, under or about the
Properties or violation of any Environmental Law with respect to the Properties
or the business operated by Holdings, the Borrower or any of their respective
Subsidiaries (the "Business") which could reasonably be expected to result in a
--------
Material Adverse Effect. Neither Holdings, the Borrower nor any of their
respective Subsidiaries has assumed any liability of any other Person under
Environmental Laws which could reasonably be expected to have a Material Adverse
Effect.
(c) Neither Holdings, the Borrower nor any of their respective
Subsidiaries has received any written notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the Business, nor does Holdings or the Borrower have knowledge or reason to
believe that any such notice will be received or is being threatened, except
insofar as such notice or threatened notice, or any aggregation thereof, does
not involve a matter or matters that constitute a breach of any other
representation contained in this Section 4.17.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
which could give rise to liability under, any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Properties in violation of, or in a manner that
could give rise to liability under, any applicable Environmental Law, except
insofar as any such violation or liability referred to in this paragraph, or any
aggregation thereof, could not reasonably be expected to result in a Material
Adverse Effect.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of Holdings or the Borrower, threatened, under
any Environmental Law to which Holdings, the Borrower or any of their respective
Subsidiaries is or will be named as a party with respect to the Properties or
the Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
the Properties or the Business, except insofar as such proceeding, action,
decree, order or other requirement, or any aggregation thereof, could not
reasonably be expected to result in a Material Adverse Effect.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of Holdings, the Borrower or any of their respective Subsidiaries
in connection with the Properties or otherwise in connection with the Business,
in violation of or in amounts or in a manner that could give rise to liability
under Environmental Laws, except insofar as any such violation or liability
referred to in
55
this paragraph, or any aggregation thereof, could not reasonably be expected to
result in a Material Adverse Effect.
4.18 Accuracy of Information, etc. Subject to the next succeeding
----------------------------
sentence and to the qualification provided therein, no statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
to the Administrative Agent or the Lenders or any of them, by or on behalf of
any Loan Party for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, taken as a whole, contained as of the
date such statement, information, document or certificate was so furnished, any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein, taken as
a whole, not misleading. The projections and pro forma financial information
--- -----
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Lenders that such financial information as
it relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount. There is no
fact known to any Loan Party that could reasonably be expected to have a
Material Adverse Effect that has not been expressly disclosed herein, in the
other Loan Documents, in the Confidential Information Memorandum or in any other
documents, certificates and statements furnished to the Administrative Agent and
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
4.19 Security Documents. (a) The Guarantee and Collateral Agreement
------------------
is effective to create in favor of the Administrative Agent, for the benefit of
the Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when stock certificates
representing such Pledged Stock are delivered to the Administrative Agent,
together with proper endorsements executed in blank and, in the case of the UCC
Filing Collateral described in the Guarantee and Collateral Agreement, when
financing statements in appropriate form are filed in the offices specified on
Schedule 4.19(a), the Guarantee and Collateral Agreement shall, except as
otherwise provided therein, constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations (as defined
in the Guarantee and Collateral Agreement), in each case prior and superior in
right to any other Person other than Liens permitted under Section 7.3 (except
Section 7.3(j)).
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
4.19(b), each such Mortgage shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Mortgaged Properties and the proceeds thereof, as security for the Obligations
(as defined in the relevant Mortgage), in each case prior and superior in right
to any other Person other than Liens permitted under Section 7.3 (except Section
7.3(j)).
56
4.20 Solvency. The Loan Parties are, and after giving effect to the
--------
Recapitalization and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
4.21 Senior Indebtedness. The Obligations, and the obligations of
-------------------
each Subsidiary Guarantor under the Guarantee and Collateral Agreement,
constitute "Senior Debt" and "Designated Senior Debt" of the Borrower, in each
case under and as defined in the Senior Subordinated Note Indenture. No
Indebtedness (other than the Obligations owing by the Borrower under the Loan
Documents) has been designated as "Designated Senior Debt" under the Senior
Subordinated Note Indenture.
4.22 Regulation H. No Mortgage, other than Mortgages for which the
------------
Borrower has delivered notice to the Administrative Agent, encumbers improved
real property which is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available under the National
Flood Insurance Act of 1968.
4.23 Year 2000 Compliance. To the best knowledge of Holdings and the
--------------------
Borrower, any requirements for upgrade or replacement projects to permit the
proper functioning of such computer and management information systems after the
year 2000 could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each
-----------------------------------------
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to May 15, 1998 and prior to or concurrently
with the making of such extension of credit on the Closing Date, of the
following conditions precedent:
(a) Loan Documents. The Syndication Agent shall have received (i)
--------------
this Agreement, executed and delivered by a duly authorized officer of
Holdings and the Borrower, (ii) the Guarantee and Collateral Agreement,
executed and delivered by a duly authorized officer of Holdings, the
Borrower and each Subsidiary Guarantor, (iii) a Mortgage covering each of
the Mortgaged Properties, executed and delivered by a duly authorized
officer of each party thereto, and (iv) to the extent requested on or prior
to the Closing Date, for the account of each relevant Lender, Notes
conforming to the requirements hereof and executed and delivered by a duly
authorized officer of the Borrower.
(b) Recapitalization. The Recapitalization shall have been or shall
----------------
be concurrently consummated for aggregate consideration not exceeding
$358,000,000 pursuant to and in accordance with the Merger Agreement
(subject to adjustment as provided in the Merger Agreement (as in effect on
the date hereof)), and no representation or other material provision
thereof shall have been waived, amended, supplemented or otherwise modified
without the prior written consent of the Agents. Without limiting the
foregoing, the following transactions shall have been consummated, in each
case on terms and conditions reasonably satisfactory to the Lenders:
57
(i) Xxxx/RCL and its affiliates and other investors shall have
contributed at least $45,250,000 in cash common equity to MergeCo;
(ii) Holdings shall have transferred as a capital contribution
all of its assets and liabilities to the Borrower;
(iii) the Merger shall have been consummated in accordance with
applicable law;
(iv) the Borrower shall have received the net proceeds from the
issuance by the Borrower and Alliance Laundry Corporation of at least
$110,000,000 in aggregate principal amount of Senior Subordinated
Notes; and
(v) pursuant to the Merger, (1) the limited liability company
interests owned by Raytheon prior to the Merger shall have been
converted into (A) the right to receive $339,500,000 in cash (subject
to adjustment as provided in the Merger Agreement (as in effect on the
date hereof)), which will be financed in part with the proceeds of the
Intercompany Distribution, (B) common limited liability company
interests of Holdings, as the surviving entity of the Merger, with a
value of approximately $3,500,000, (C) Subordinated Seller Notes in an
aggregate principal amount of $9,000,000 and (D) Seller Preferred
Membership Interests having an aggregate liquidation preference of
$6,000,000 and (2) the limited liability company interests in MergeCo
shall be converted into membership interests of Holdings, as the
surviving entity in the Merger, with a value of $47,100,000 and
representing 93% of the outstanding common limited liability company
interests in Holdings following the Merger.
(c) Accounts Receivables and Notes Receivable Financing. The Agents
---------------------------------------------------
and the Lenders shall have received evidence reasonably satisfactory to
them that the Borrower shall have established a $250,000,000 non-recourse
off-balance sheet receivables purchase and equipment financing facility (as
the same may be amended, modified or changed from time to time, the
"Initial Receivables Facility") on terms and conditions satisfactory to the
-----------------------------
Agents and the Lenders. Without limiting the foregoing, the Initial
Receivables Facility shall have a term of at least five years.
(d) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
---------------------------------------------
have received (i) the Pro Forma Balance Sheet, (ii) audited combined
financial statements of the Commercial Laundry Business of Raytheon for the
1996 and 1997 fiscal years and (iii) interim combined financial statements
of the Commercial Laundry Business of Raytheon for the three-month period
ended on or about March 31, 1998, and such financial statements shall not,
in the reasonable judgment of the Lenders, reflect any material adverse
change in the consolidated financial condition of the Commercial Laundry
Business of Raytheon, as reflected in the financial statements or
projections contained in the Confidential Information Memorandum.
(e) Approvals. All governmental and third party approvals (including
---------
landlords' and other consents) necessary in connection with the
Recapitalization, the continuing operations of Holdings, the Borrower and
their respective Subsidiaries and the
58
transactions contemplated hereby shall have been obtained and be in full
force and effect, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority
which would restrain, prevent or otherwise impose adverse conditions on the
Recapitalization or the financing contemplated hereby.
(f) Related Agreements. The Syndication Agent shall have received
------------------
(in a form reasonably satisfactory to the Syndication Agent), with a copy
for each Lender, true and correct copies, certified as to authenticity by
Holdings, of the Merger Agreement and such other documents or instruments
as may be reasonably requested by the Syndication Agent, including, without
limitation, a copy of the Senior Subordinated Note Indenture and any other
debt instrument, security agreement or other material contract to which any
Loan Party may be a party.
(g) Fees. The Lenders, the Syndication Agent, the Arranger and the
----
Administrative Agent shall have received all fees required to be paid, and
all expenses for which invoices have been presented, on or before the
Closing Date. All such amounts will be paid with proceeds of Loans made on
the Closing Date and will be reflected in the funding instructions given by
the Borrower to the Administrative Agent on or before the Closing Date.
(h) Business Plan. The Lenders shall have received a satisfactory
-------------
business plan for fiscal years 1998-2006 and a satisfactory written
analysis of the business and prospects of the Holdings and its Subsidiaries
for the period from the Closing Date through the final maturity of the Term
Loans, and any differences between such information and corresponding
information provided in writing to the Syndication Agent previously shall
be satisfactory to the Syndication Agent in all material respects.
(i) Solvency Certificate. The Lenders shall have received a solvency
--------------------
certificate from the chief financial officer of Holdings which shall
document the solvency of Holdings and its Subsidiaries considered as a
whole and of the Borrower and its Subsidiaries considered as a whole after
giving effect to the Recapitalization and the transactions contemplated
hereby and shall otherwise be in form and substance satisfactory to the
Lenders.
(j) Lien Searches. The Syndication Agent shall have received the
-------------
results of a recent lien search in each of the jurisdictions where assets
of the Loan Parties are located, and such search shall reveal no liens on
any of the assets of Holdings or its Subsidiaries except for liens
permitted by Section 7.3 or liens to be discharged prior to the Closing
Date pursuant to documentation satisfactory in form and substance to the
Syndication Agent.
(k) Environmental Condition. The Arranger and the Syndication Agent
-----------------------
shall be satisfied with the environmental condition of the real properties
of Holdings and its Subsidiaries.
(l) Expenses. The Syndication Agent shall have received satisfactory
--------
evidence that the aggregate fees and expenses incurred and to be incurred
by Holdings, the
59
Borrower and their respective Subsidiaries in connection with the
Recapitalization and the financing thereof shall not exceed $22,500,000.
(m) Closing Certificate. The Syndication Agent shall have received,
-------------------
with a counterpart for each Lender, a certificate of each Loan Party, dated
the Closing Date, substantially in the form of Exhibit C, with appropriate
insertions and attachments.
(n) Legal Opinions. The Agents shall have received the following
--------------
executed legal opinions:
(i) the legal opinion of Xxxxxxxx & Xxxxx, counsel to Holdings
and its Subsidiaries, substantially in the form of Exhibit F; and
(ii) the legal opinion of Xxxxx, Xxxxxx & Xxxxxxx,Xxxxxxxx Law
Offices and Xxxxx & Lardner and of such other special and local
counsel as may be required by the Syndication Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agents may
reasonably require.
(o) Pledged Stock; Stock Power; Pledged Notes. The Syndication Agent
-----------------------------------------
shall have received on behalf of the Administrative Agent (i) the
certificates representing the shares of Capital Stock pledged pursuant to
the Guarantee and Collateral Agreement, together with an undated stock
power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof, provided that, the Borrower shall have 90
--------
days after the Closing Date to deliver the certificates representing the
pledged Capital Stock of ALSA to the Administrative Agent, and (ii) each
promissory note pledged to the Administrative Agent pursuant to the
Guarantee and Collateral Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank satisfactory to the
Syndication Agent) by the pledgor thereof.
(p) Filings, Registrations and Recordings. Each document (including,
-------------------------------------
without limitation, any Uniform Commercial Code financing statement)
required by the Security Documents or under law or reasonably requested by
the Syndication Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for filing,
registration or recordation and shall have been delivered to the
Syndication Agent.
(q) Title Insurance; Flood Insurance. (i) If requested by the
--------------------------------
Syndication Agent, the Syndication Agent shall have received, and the title
insurance company issuing the policy referred to in clause (ii) below (the
"Title Insurance Company") shall have received, maps or plats of an as-
-----------------------
built survey of the sites of the Mortgaged Properties certified to the
Agents and the Title Insurance Company in a manner satisfactory to them,
dated a date satisfactory to the Syndication Agent and the Title Insurance
Company by an independent professional licensed land surveyor satisfactory
to the Syndication Agent and the Title Insurance Company, which maps or
plats and the surveys on which they are
60
based shall be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted by the
American Land Title Association and the American Congress on Surveying and
Mapping in 1992, and, without limiting the generality of the foregoing,
there shall be surveyed and shown on such maps, plats or surveys the
following: (A) the locations on such sites of all the buildings, structures
and other improvements and the established building setback lines; (B) the
lines of streets abutting the sites and width thereof; (C) all access and
other easements appurtenant to the sites; (D) all roadways, paths,
driveways, easements, encroachments and overhanging projections and similar
encumbrances affecting the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building structures and
improvements on the sites; (F) if the site is described as being on a filed
map, a legend relating the survey to said map; and (G) the flood zone
designations, if any, in which the Mortgaged Properties are located.
(ii) The Syndication Agent (on behalf of the Administrative Agent)
shall have received in respect of each Mortgaged Property a mortgagee's
title insurance policy (or policies) or marked up unconditional binder for
such insurance. Each such policy shall (A) be in an amount satisfactory to
the Syndication Agent; (B) be issued at ordinary rates; (C) insure that the
Mortgage insured thereby creates a valid first Lien on such Mortgaged
Property free and clear of all defects and encumbrances, except as
disclosed therein; (D) name the Administrative Agent for the benefit of the
Lenders as the insured thereunder; (E) be in the form of ALTA Loan Policy -
1970 (Amended 10/17/70 and 10/17/84) (or equivalent policies); (F) contain
such endorsements and affirmative coverage as the Agents may reasonably
request and (G) be issued by title insurance companies satisfactory to the
Syndication Agent (including any such title insurance companies acting as
co-insurers or reinsurers, at the option of the Syndication Agent). The
Syndication Agent shall have received evidence satisfactory to it that all
premiums in respect of each such policy, all charges for mortgage recording
tax, and all related expenses, if any, have been paid.
(iii) If requested by the Syndication Agent, the Syndication Agent
(on behalf of the Administrative Agent) shall have received (A) a policy of
flood insurance which (1) covers any parcel of improved real property which
is encumbered by any Mortgage, (2) is written in an amount not less than
the outstanding principal amount of the indebtedness secured by such
Mortgage which is reasonably allocable to such real property or the maximum
limit of coverage made available with respect to the particular type of
property under the National Flood Insurance Act of 1968, whichever is less,
and (3) has a term ending not later than the maturity of the Indebtedness
secured by such Mortgage and is otherwise in form and substance
satisfactory to the Syndication Agent and (B) confirmation that the
Borrower has received the notice required pursuant to Section 208(e)(3) of
Regulation H of the Board.
(iv) To the extent requested, the Syndication Agent shall have
received a copy of all recorded documents referred to, or listed as
exceptions to title in, the title policy or policies referred to in clause
(ii) above and a copy of all other material documents affecting the
Mortgaged Properties.
61
(r) Availability. The aggregate principal amount of Revolving Credit
------------
Loans outstanding on the Closing Date shall not exceed $5,000,000 after
giving effect to the Recapitalization and the consummation of the other
transactions contemplated hereby.
(s) Insurance. The Syndication Agent (on behalf of the
---------
Administrative Agent) shall have received insurance certificates satisfying
the requirements of Section 5.3 of the Guarantee and Collateral Agreement.
5.2 Conditions to Each Extension of Credit. The agreement of each
--------------------------------------
Lender to make any extension of credit requested to be made by it on any date
(including, without limitation, its initial extension of credit) is subject to
the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of
such date.
(b) No Default. No Default or Event of Default shall have occurred
----------
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect, any Letter of Credit (which has not
been cash collateralized in the manner described in the final paragraph of
Section 8) remains outstanding or any Loan or other amount is owing (including,
without limitation, accrued interest and fees) to any Lender or any Agent
hereunder, each of Holdings and the Borrower shall and shall cause each of their
respective Subsidiaries to:
6.1 Financial Statements. Furnish to the Administrative Agent (for
--------------------
distribution to the Lenders) and to the Syndication Agent:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower (commencing with the fiscal year
ending on or about December 31, 1998), a copy of the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the
end of such year and the related audited consolidated statements of income
and of cash flows for such year, setting forth in each case (commencing
with the balance sheet and related statements of income and of cash flows
with respect to the fiscal year ending on or about December 31, 1999) in
comparative form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or qualification
arising out of the scope of the
62
audit, by Price Waterhouse L.L.P. or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower (commencing with the fiscal quarter ending on or about
September 30, 1998), the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth (commencing with the balance sheet and
related statements of income and of cash flows with respect to the fiscal
quarter ending on or about September 30, 1999) in each case in comparative
form the figures for the previous year, certified by a Responsible Officer
as being fairly stated in all material respects (subject to normal year-end
audit adjustments and the absence of certain footnotes); and
(c) as soon as available, but in any event not later than 30 days
after the end of each month occurring during each fiscal year of the
Borrower (other than the third, sixth, ninth and twelfth such month),
commencing with the fiscal month ending on or about October 31, 1998, the
unaudited consolidated balance sheets of the Borrower and its Subsidiaries
as at the end of such month and the related unaudited consolidated
statements of income and of cash flows for such month and the portion of
the fiscal year through the end of such month, setting forth (commencing
with the balance sheet and related statements of income and of cash flows
with respect to the month ending on or about October 31, 1999) in each case
in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments and the absence of certain
footnotes);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 Certificates; Other Information. Furnish to the Administrative
-------------------------------
Agent (with copies for each Lender) and to the Syndication Agent or, in the case
of clause (h), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default under Section 7.1, except as specified in such
certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) in the
case of quarterly or annual financial statements, (x) a Compliance
Certificate containing all information necessary for determining compliance
by Holdings, the Borrower and their respective Subsidiaries with the
provisions of this
63
Agreement referred to therein (including, without limitation, Section 7.1)
as of the last day of the fiscal quarter or fiscal year of the Borrower, as
the case may be, and (y) to the extent not previously disclosed to the
Administrative Agent, a listing of any county or state within the United
States where any Loan Party keeps inventory or equipment and of any
Intellectual Property acquired by any Loan Party since the date of the most
recent list delivered pursuant to this clause (y) (or, in the case of the
first such list so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 30 days
after the end of each fiscal year of the Borrower, a detailed consolidated
budget for the following fiscal year (including a projected consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of the
following fiscal year and the related consolidated statements of projected
cash flow, projected changes in financial position and projected income)
and, as soon as available, significant revisions, if any, of such budget
and projections with respect to such fiscal year which are delivered to the
Board of Managers of Holdings for its review (collectively, the
"Projections"), which Projections shall in each case be accompanied by a
------------
certificate of a Responsible Officer stating that such Projections are
based on reasonable estimates, information and assumptions at the time made
in light of the circumstances then existing and that such Responsible
Officer has no reason to believe that such Projections are incorrect or
misleading in any material respect;
(d) within 45 days after the end of each fiscal quarter of the
Borrower during any period in which the Borrower is not required to file
periodic reports on Forms 10-K and 10-Q with the Securities and Exchange
Commission, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, as compared to the portion
of the Projections covering such periods and to the comparable periods of
the previous year when comparisons are required under Section 6.1;
(e) no later than 10 Business Days prior to the proposed
effectiveness thereof, copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to the
Senior Subordinated Note Indenture, the Seller Securities or the
Recapitalization Documents which is prohibited by Section 7.9 or 7.16 (and
the effectiveness of any such proposed amendment, supplement, waiver or
other modification shall be conditioned upon the receipt of any necessary
consent thereto required under this Agreement);
(f) within five days after the same are sent, copies of all financial
statements and reports (including reports on Form 10-K, 10-Q and 8-K) which
Holdings or the Borrower sends generally to the holders of any class of its
debt securities or public equity securities and, promptly after the same
are filed, copies of all financial statements and reports which Holdings or
the Borrower may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(g) promptly upon receipt thereof, copies of any management or other
similar letters received from the accountants performing the audit of the
financial statements pursuant to Section 6.1(a); and
64
(h) promptly, such additional financial and other information
concerning Holdings, the Borrower or any of their respective Subsidiaries
as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
----------------------
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where (a) the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of Holdings, the Borrower or their respective Subsidiaries, as the
case may be, or (b) the failure to so pay, discharge or otherwise satisfy any
such obligations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
6.4 Conduct of Business and Maintenance of Existence, etc. 1 (a)
------------------------------------------------------
(i) Preserve, renew and keep in full force and effect its existence and (ii)
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 7.4 and except, in the case of clause
(ii) above, to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect; and1 (b) comply with all Contractual
Obligations (other than in respect of Indebtedness) and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all material
----------------------------------
tangible Property useful and necessary in its business in good working order and
condition, ordinary wear and tear and damage occurring as a result of a casualty
event excepted, and (b) maintain with financially sound and reputable insurance
companies insurance on all its Property in at least such amounts and against at
least such risks (but including in any event public liability, product liability
and business interruption) as are usually insured against in the same general
area by companies engaged in the same or a similar business.
6.6 Inspection of Property; Books and Records; Discussions. (a)
------------------------------------------------------
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender, at its own expense, to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of Holdings, the Borrower and their respective Subsidiaries with officers and
employees of Holdings, the Borrower and their respective Subsidiaries and, in
the presence of a Responsible Officer, with its independent certified public
accountants, provided that all such visits and inspections shall be coordinated
--------
through the Administrative Agent.
6.7 Notices. Promptly give notice to the Administrative Agent and
-------
each Lender of:
(a) the occurrence of any Default or Event of Default;
65
(b) any litigation, investigation or proceeding which may exist at
any time affecting Holdings, the Borrower or any of their respective
Subsidiaries, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof unless any
such event could not, individually or together with all such other events,
result in any liability to the Borrower or any Commonly Controlled Entity
which could reasonably be expected to have a Material Adverse Effect: (i)
the occurrence of any Reportable Event with respect to any Plan, a failure
to make any required contribution to a Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan;
(d) each consent, amendment or waiver requested under the Merger
Agreement on or prior to the Closing Date; and
(e) any development or event which has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply with, and ensure compliance in
------------------
all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws, and obtain and comply with and maintain, and
ensure that all tenants and subtenants obtain and comply with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except for such failures to comply which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws, except for, in each
case, such failures which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
6.9 Interest Rate Protection. In the case of the Borrower, within
------------------------
180 days after the Closing Date, enter into Hedge Agreements to the extent
necessary to provide that 33% of the aggregate principal amount of the Term
Loans is subject to either a fixed interest rate or interest rate protection for
a period of not less than three years, which Hedge Agreements shall have terms
and conditions reasonably satisfactory to the Agents.
66
6.10 Additional Collateral, etc. (a) With respect to any Property
--------------------------
acquired after the Closing Date by Holdings, the Borrower or any other Guarantor
(other than (x) any Property described in paragraph (b), (c) or (d) below and
(y) any Property subject to a Lien expressly permitted by Section 7.3(g),
7.3(k), 7.3(n), 7.3(p), 7.3(q), 7.3(r), 7.3(v) or 7.3(w) to the extent the terms
of the agreements with respect to such Liens prohibit the granting of a Lien for
the benefit of the Lenders on such Property) as to which the Administrative
Agent, for the benefit of the Lenders, does not have a perfected Lien, promptly
(i) execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a security interest in such Property and (ii) take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in such
Property (subject to Liens permitted under Section 7.3 (except Section 7.3(j)),
including without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative
Agent.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $1,000,000 acquired after
the Closing Date by Holdings, the Borrower or any other Guarantor (other than
any such real property subject to a Lien expressly permitted by Section 7.3(g)
or 7.3(k)), promptly (i) execute and deliver a first priority Mortgage in favor
of the Administrative Agent, for the benefit of the Lenders, covering such real
property (subject to Liens permitted under Section 7.3 (except Section 7.3(j))),
(ii) if requested by the Administrative Agent, provide the Lenders with (x)
title and extended coverage insurance covering such real property in an amount
at least equal to the purchase price of such real estate (or such other amount
as shall be reasonably specified by the Administrative Agent) as well as a
current ALTA survey thereof, together with a surveyor's certificate, and (y) any
consents or estoppels reasonably deemed necessary by the Administrative Agent in
connection with such mortgage or deed of trust, each of the foregoing in form
and substance reasonably satisfactory to the Administrative Agent, and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Subsidiary) created or acquired after the Closing Date (which, for the purposes
of this paragraph, shall include any existing Subsidiary that ceases to be an
Excluded Subsidiary), by Holdings, the Borrower or any of their respective
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary which is owned by Holdings, the Borrower or
any of their respective Domestic Subsidiaries (subject to Liens permitted under
Section 7.3 (except Section 7.3(j))), (ii) deliver to the Administrative Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of
Holdings, the Borrower or such Subsidiary, as the case may be, (iii) cause such
new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement
and (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Lenders a perfected first priority
security interest in the Collateral described in the Guarantee and Collateral
Agreement with respect to such new Subsidiary (subject to Liens permitted under
Section 7.3 (except Section
67
7.3(j))), including, without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be requested by the Administrative
Agent, and (iv) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(d) With respect to any new Excluded Subsidiary created or acquired
after the Closing Date by Holdings, the Borrower or any of their respective
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable in order to grant to the Administrative Agent, for
the benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary which is owned by Holdings, the Borrower or
any of their respective Subsidiaries (provided that in no event shall more than
65% of the total outstanding Capital Stock of any such new Foreign Subsidiary be
required to be so pledged), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of
Holdings, the Borrower or such Subsidiary, as the case may be, and take such
other action as may be necessary in the opinion of the Administrative Agent, to
perfect the Lien of the Administrative Agent thereon, and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
6.11 Further Assurances. (a) In the case of the Borrower, from time
------------------
to time execute and deliver, or cause to be executed and delivered, such
additional instruments, certificates or documents, and take all such actions, as
the Administrative Agent may reasonably request, for the purposes of
implementing or effectuating the provisions of this Agreement and the other Loan
Documents, or of more fully perfecting or renewing the rights of the
Administrative Agent and the Lenders with respect to the Collateral (or with
respect to any additions thereto or replacements or proceeds thereof or with
respect to any other property or assets hereafter acquired by the Borrower which
may be deemed to be part of the Collateral) pursuant hereto or thereto. Upon the
exercise by the Administrative Agent or any Lender of any power, right,
privilege or remedy pursuant to this Agreement or the other Loan Documents which
requires any consent, approval, recording, qualification or authorization of any
Governmental Authority, the Borrower will execute and deliver, or will cause the
execution and delivery of, all applications, certifications, instruments and
other documents and papers that the Administrative Agent or such Lender may be
required to obtain from the Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.
SECTION 7. NEGATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect, any Letter of Credit (which has not
been cash collateralized in the manner described in the final paragraph of
Section 8) remains outstanding or any Loan or other amount (including, without
limitation, accrued interest and fees) is owing to any Lender or any Agent
hereunder, each of Holdings and the Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:
68
7.1 Financial Condition Covenants.
-----------------------------
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
---------------------------
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Ending On or About Leverage Ratio
--------------------------------- --------------
September 30, 1998 6.50 to 1.00
December 31, 1998 6.50 to 1.00
March 31, 1999 6.50 to 1.00
June 30, 1999 6.50 to 1.00
September 30, 1999 6.50 to 1.00
December 31, 1999 6.50 to 1.00
March 31, 2000 7.00 to 1.00
June 30, 2000 7.10 to 1.00
September 30, 2000 7.00 to 1.00
December 31, 2000 6.40 to 1.00
March 31, 2001 6.40 to 1.00
June 30, 2001 6.40 to 1.00
September 30, 2001 6.40 to 1.00
December 31, 2001 6.00 to 1.00
March 31, 2002 6.00 to 1.00
June 30, 2002 6.00 to 1.00
September 30, 2002 6.00 to 1.00
December 31, 2002 5.25 to 1.00
March 31, 2003 5.25 to 1.00
June 30, 2003 5.25 to 1.00
September 30, 2003 5.25 to 1.00
December 31, 2003 4.25 to 1.00
March 31, 2004 4.25 to 1.00
June 30, 2004 4.25 to 1.00
September 30, 2004 4.25 to 1.00
December 31, 2004 and each Fiscal
Quarter thereafter 3.10 to 1.00
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
------------------------------------
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower (or, if less, the number of full fiscal quarters subsequent to the
Closing Date) ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
69
Consolidated Interest
Fiscal Quarter Ending On or About Coverage Ratio
--------------------------------- ---------------------
September 30, 1998 1.60 to 1.00
December 31, 1998 1.60 to 1.00
March 31, 1999 1.60 to 1.00
June 30, 1999 1.60 to 1.00
September 30, 1999 1.60 to 1.00
December 31, 1999 1.60 to 1.00
March 31, 2000 1.50 to 1.00
June 30, 2000 1.45 to 1.00
September 30, 2000 1.45 to 1.00
December 31, 2000 1.60 to 1.00
March 31, 2001 1.60 to 1.00
June 30, 2001 1.60 to 1.00
September 30, 2001 1.60 to 1.00
December 31, 2001 1.70 to 1.00
March 31, 2002 1.70 to 1.00
June 30, 2002 1.70 to 1.00
September 30, 2002 1.70 to 1.00
December 31, 2002 1.90 to 1.00
March 31, 2003 1.90 to 1.00
June 30, 2003 1.90 to 1.00
September 30, 2003 1.90 to 1.00
December 31, 2003 2.30 to 1.00
March 31, 2004 2.30 to 1.00
June 30, 2004 2.30 to 1.00
September 30, 2004 2.30 to 1.00
December 31, 2004 and each Fiscal
Quarter thereafter 3.00 to 1.00
; provided, that for the purposes of determining the ratio described above for
--------
the fiscal quarters of the Borrower ending on or about September 30, 1998,
December 31, 1998 and March 31, 1999, Consolidated Cash Interest Expense for the
relevant period shall be deemed to equal Consolidated Cash Interest Expense for
such fiscal quarter (and, in the case of the latter two such determinations,
each previous fiscal quarter commencing after the Closing Date) multiplied by 4,
-------------
2 and 4/3, respectively.
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to
--------------------------
exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document
(including Indebtedness in respect of Loans and Letters of Credit);
(b) Indebtedness of the Borrower to any Subsidiary and, subject to
Section 7.8(i) in the case of Indebtedness of a Subsidiary that is not a
Subsidiary Guarantor, of any Subsidiary to the Borrower or any other
Subsidiary;
70
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $7,500,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d);
(e) subject to Section 7.8(i) in the case of Guarantee Obligations in
respect of obligations of Subsidiaries that are not Subsidiary Guarantors,
Guarantee Obligations made in the ordinary course of business by the
Borrower or any of its Subsidiaries of obligations (other than
Indebtedness) of the Borrower or any Subsidiary;
(f) (i) Indebtedness of the Borrower and Alliance Laundry Corporation
in respect of (A) the Senior Subordinated Notes in an aggregate principal
amount not to exceed $110,000,000 or (B) any other senior subordinated
notes issued to refinance the Senior Subordinated Notes having
substantially the same terms and conditions as the Senior Subordinated
Notes (except that the final maturity thereof shall be longer than the
final maturity of the Senior Subordinated Notes) and in an aggregate
principal amount not to exceed $110,000,000 and (ii) Guarantee Obligations
of Holdings or any Subsidiary Guarantor in respect of such Indebtedness;
provided that any Indebtedness permitted under clause (i)(B) and any such
--------
Guarantee Obligations are subordinated to the same extent as the
obligations of the Borrower and Alliance Laundry Corporation in respect of
the Senior Subordinated Notes;
(g) Indebtedness of Holdings in respect of the Intercompany
Distribution in an aggregate principal amount, together with dividends and
distributions paid to Holdings pursuant to Section 7.6(d), not to exceed
$269,500,000 plus the amount of any purchase price adjustment required to
be paid by Holdings pursuant to the Merger Agreement (as in effect on the
date hereof);
(h) Indebtedness of Holdings in respect of the Subordinated Seller
Notes (or any subordinated notes issued to refinance the Subordinated
Seller Notes having substantially the same terms and conditions as the
Subordinated Seller Notes (except that the final maturity thereof shall be
longer than the final maturity of the Subordinated Seller Notes)) in an
initial principal amount not to exceed $9,000,000 plus the amount of
interest on such Subordinated Seller Notes paid in-kind or through
accretion or capitalization;
(i) Indebtedness of the Borrower or any of its Subsidiaries arising
out of any Sale/Leaseback Transaction permitted under Section 7.11 in an
aggregate amount not to exceed $2,500,000;
(j) (i) Indebtedness of a Person which becomes a Subsidiary after the
Closing Date pursuant to an Acquisition or Subsidiary Acquisition permitted
under Section 7.8(i), (ii) Indebtedness secured by Liens permitted under
Section 7.3(k) and (iii) Indebtedness of a Person assumed by the Borrower
or any Subsidiary Guarantor pursuant to a merger of such Person with and
into the Borrower or such Subsidiary Guarantor pursuant to an Acquisition
or Subsidiary Acquisition permitted under Section 7.8(i), provided that,
--------
(A) such Indebtedness was not incurred or created in connection with or in
anticipation of the
71
relevant Acquisition or Subsidiary Acquisition and (B) no Default or Event
of Default would result therefrom;
(k) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business, provided that such
--------
Indebtedness is extinguished within two Business Days of notice to the
Borrower or the relevant Subsidiary of its incurrence;
(l) Indebtedness of Holdings in respect of Management Notes;
(m) Indebtedness in respect of performance bonds, bid bonds, appeal
bonds, surety bonds, completion guarantees or other similar obligations
arising in the ordinary course of business, provided that no such bond or
--------
similar obligation is provided to secure the repayment of other
Indebtedness;
(n) Indebtedness arising out of purchase price adjustments and
customary indemnifications by the Borrower or any of its Subsidiaries in
connection with the Recapitalization or any Acquisition or Subsidiary
Acquisition permitted under Section 7.8;
(o) Indebtedness of the Borrower or any of its Subsidiaries in
respect of industrial revenue bonds issued to finance the expansion of the
facility located in Madisonville, Kentucky, provided that the aggregate
--------
principal amount of such Indebtedness does not exceed $10,000,000;
(p) (i) Indebtedness of any Foreign Subsidiary incurred to finance
the working capital requirements of such Foreign Subsidiary in an amount
not to exceed the sum of 90% of such Foreign Subsidiary's Accounts
Receivable and 60% of such Foreign Subsidiary's inventory and (ii) other
Indebtedness of Foreign Subsidiaries not to exceed $2,500,000 in the
aggregate at any one time outstanding;
(q) additional Indebtedness not otherwise permitted under this
Section 7.2 provided that the aggregate outstanding principal amount of
--------
such Indebtedness does not exceed $10,000,000 prior to the completion of
the Ripon Transition and $20,000,000 at any time thereafter;
(r) Indebtedness of Holdings in respect of any Restricted Payment
made to it and permitted pursuant to Section 7.6 to the extent such
Restricted Payment is recharacterized as a loan instead of a distribution;
(s) Indebtedness incurred by the Borrower or any Subsidiary Guarantor
to finance any Acquisition or Subsidiary Acquisition permitted under
Section 7.8(i) in an aggregate principal amount not to exceed the excess of
(x) $35,000,000 over (y) the aggregate amount of all Indebtedness assumed
by the Borrower and the Subsidiary Guarantors (including any Acquired
Persons) in connection with all such Acquisitions and Subsidiary
Acquisitions consummated in reliance upon clause (i)(A)(x) of the proviso
to such Section, provided that, (i) if any Consolidated Senior Debt is
--------
incurred in connection with any such Acquisition, after giving effect to
such Indebtedness and the related Acquisitions or Subsidiary Acquisitions
on a pro forma basis as if such Indebtedness had been incurred
72
and such Acquisitions or Subsidiary Acquisitions had occurred on the first
day of the most recent period of four consecutive quarters of the Borrower,
the Consolidated Senior Debt Leverage Ratio on the last day of such period
would not have been greater than 3.75 to 1.0 and the Borrower would have
been in compliance with the covenants set forth in Section 7.1 on such date
and (ii) after giving effect to such Indebtedness and the related
Acquisitions or Subsidiary Acquisitions, no Default or Event of Default
shall have occurred and be continuing;
(t) (i) Indebtedness of the Borrower or any Subsidiary Guarantor
consisting of Guarantee Obligations in respect of any Indebtedness of the
Borrower or any Subsidiary Guarantor incurred pursuant to paragraphs (c),
(i), (j), (m), (n), (o), (q), (s) or (u) of this Section, (ii) Indebtedness
of any Subsidiary (other than a Subsidiary Guarantor) consisting of
Guarantee Obligations of any Indebtedness of the Borrower or any other
Subsidiary of any of the Borrower or any other Subsidiary and (iii) subject
to Section 7.8(i), any Indebtedness of the Borrower or Subsidiary Guarantor
consisting of Guarantee Obligations in respect of Indebtedness of any
Subsidiary (other than a Subsidiary Guarantor);
(u) Indebtedness incurred in connection with the financing of
insurance premiums in the ordinary course of business;
(v) In connection with Permitted Receivables Financings, Limited
Originator Recourse; and
(w) subject to Section 7.3(f), any renewals, extensions, refundings
or refinancings of any Indebtedness permitted under paragraphs (c), (d),
(k) and (p) of this Section, provided that the principal amount of such
--------
Indebtedness is not increased pursuant to any such renewal, extension,
refunding or refinancing;
provided, however, that no Indebtedness of Holdings, the Borrower or any of
-------- -------
their respective Subsidiaries (other than Indebtedness under this Agreement)
shall be designated as "Designated Senior Debt" or shall be "Senior Credit
Facilities" under and as defined in the Senior Subordinated Note Indenture
without the prior written consent of the Agents and the Required Lenders.
7.3 Limitation on Liens. Create, incur, assume or suffer to exist
-------------------
any Lien upon any of its Property, whether now owned or hereafter acquired,
except for:
(a) Liens for taxes, assessments or governmental charges or levies
not yet delinquent or which are being contested in good faith by
appropriate proceedings; provided that adequate reserves with respect
--------
thereto are maintained on the books of the Borrower or its Subsidiaries, as
the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlords' or other like Liens arising in the ordinary course
of business, and Liens imposed by law, in each case which are not overdue
for a period of more than 30 days or which are being contested in good
faith by appropriate proceedings;
73
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, tenders, trade
contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions, minor defects or
irregularities of title and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, are not substantial in
amount and which do not in any case materially detract from the value of
the Property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(f) (i) Liens in existence on the date hereof listed on Schedule
7.3(d), securing Indebtedness permitted by Section 7.2(d) and (ii) Liens
securing Indebtedness permitted under Section 7.2(s), provided that no such
--------
Lien is spread to cover any additional Property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) to finance the acquisition,
repair or improvement of fixed or capital assets (including any interest or
title of a lessor under any Capital Lease Obligation) and real property;
provided that (i) such Liens shall be created within 180 days after the
--------
acquisition of such fixed or capital assets or real property, as the case
may be, (ii) such Liens do not at any time encumber any Property other than
the Property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased;
(h) Liens created pursuant to this Agreement and the Security
Documents;
(i) Liens arising from judgments or decrees which do not result in an
Event of Default under Section 8(h);
(j) Liens securing Indebtedness of Foreign Subsidiaries permitted to
be incurred pursuant to Section 7.2(p), so long as any such Lien attaches
only to the assets of the respective Foreign Subsidiary that has incurred
such Indebtedness;
(k) Liens on any assets of a Person which becomes a Subsidiary after
the date hereof pursuant to an Acquisition or Subsidiary Acquisition
permitted under Section 7.8(i) and Liens on fixed assets otherwise acquired
pursuant to any such Acquisition or Subsidiary Acquisition, provided that
--------
(i) such Liens existed at the time such Person became a Subsidiary or such
assets were acquired, as the case may be, and were not created in
anticipation of the acquisition, (ii) any such Lien does not by its terms
cover any property or assets after the time such Person becomes a
Subsidiary or such assets were acquired, as the case may be, which were not
covered immediately prior thereto and (iii) any such Lien does not by its
terms secure any Indebtedness other than Indebtedness
74
existing immediately prior to the time such Person becomes a Subsidiary or
such assets are acquired, as the case may be;
(l) all building codes and zoning ordinances and other laws,
ordinances, regulations, rules, orders or determinations of any federal,
state, county, municipal or other governmental authority now or hereafter
enacted;
(m) Liens on the Property financed with the proceeds of the
Indebtedness permitted by Section 7.2(o) to secure such Indebtedness;
(n) Liens securing reimbursement of obligations in respect of (i)
documentary letters of credit, provided that such Liens cover only the
--------
documents, the goods covered thereby and the proceeds thereof and (ii)
bankers' acceptances created in respect of drawings under such letters of
credit, provided that such Liens cover only the specific goods financed
--------
under such letter of credit and the proceeds thereof;
(o) Liens consisting of rights of set-off of a customary nature or
bankers' liens on amounts on deposit, whether arising by contract or
operation of law, incurred in the ordinary course of business;
(p) Liens encumbering customary initial deposits in respect of
commodity trading accounts or other brokerage accounts incurred in the
ordinary course of business;
(q) Liens solely on any xxxx xxxxxxx money deposits made by the
Borrower or any of the Subsidiary Guarantors in connection with any letter
of intent or purchase agreement entered into by it in connection with an
Acquisition or Subsidiary Acquisition permitted under Section 7.8(i);
(r) Liens on assets sold pursuant to Sale/Leaseback Transactions
permitted under Section 7.11;
(s) Liens not otherwise permitted by this Section 7.3 so long as
neither (i) the aggregate outstanding principal amount of the obligations
secured thereby nor (ii) the aggregate fair market value (determined, in
the case of each such Lien, as of the date such Lien is incurred) of the
assets subject thereto exceeds (as to the Borrower and all Subsidiaries)
$2,500,000 at any one time;
(t) Liens on goods in favor of customs and revenue authorities which
secure payment of customs duties in connection with the importation of such
goods;
(u) Liens securing obligations (other than Indebtedness) under
operating, reciprocal easements or similar agreements entered into in the
ordinary course of business by the Borrower and its Subsidiaries which do
not materially interfere with the ordinary conduct of the business of the
Borrower and its Subsidiaries;
(v) Liens consisting of any right of set-off granted to any financial
institution acting as a lockbox bank in connection with a Permitted
Receivables Financing;
75
(w) Liens on insurance policies and the proceeds thereof securing the
financing of premiums with respect thereto; and
(x) Liens filed for the purpose of perfecting the ownership interests
of a purchaser of Receivables, equipment loans and related assets pursuant
to any Permitted Receivables Financing.
7.4 Limitation on Fundamental Changes. Enter into any merger,
---------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
--------
surviving corporation) or with or into any Subsidiary (provided that, if
--------
any Subsidiary party to such merger or consolidation is a Subsidiary
Guarantor, the surviving entity shall also be a Subsidiary Guarantor);
(b) (i) the Borrower may Dispose of any or all of its assets
(including the Capital Stock of any Subsidiary) to any Subsidiary Guarantor
which, after giving effect to such Disposition, is and remains a Material
Subsidiary or, subject to Section 7.8(i), any other Subsidiary and (ii) any
Subsidiary may Dispose of any or all of its assets (including Capital Stock
of any other Subsidiary) (upon voluntary liquidation, dissolution or
otherwise) to the Borrower or any other Subsidiary, provided that if any
--------
such Subsidiary Disposing of any or all of its assets to a Subsidiary is a
Subsidiary Guarantor, the Subsidiary to which such assets are sold or
transferred must also be a Subsidiary Guarantor;
(c) the Merger shall be permitted;
(d) the Borrower or any Subsidiary may merge with or consolidate with
any Person in connection with any Acquisition or Subsidiary Acquisition
permitted hereunder, provided that (i) (A) if the Borrower is a party
--------
thereto, the Borrower is the surviving entity of such merger or
consolidation and (B) if a Subsidiary Guarantor is a party thereto, the
surviving entity of such merger or consolidation is a Subsidiary Guarantor
and (ii) no Default or Event of Default shall have occurred and be
continuing or would result therefrom; and
(e) Dispositions permitted under Section 7.5.
7.5 Limitation on Disposition of Property. Dispose of any of its
-------------------------------------
Property (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete, worn out or surplus property in the
ordinary course of business;
(b) the sale or lease of inventory or equipment in the ordinary
course of business;
76
(c) the sale or discount, in each case without recourse, of Accounts
Receivable arising in the ordinary course of business, but only in
connection with the compromise or collection thereof to the extent not
transferred in connection with any Permitted Receivables Financing;
(d) the sale or exchange of specific items of equipment for
replacement items of equipment in the ordinary course of business which are
the functional equivalent of the item of equipment so exchanged;
(e) Dispositions permitted by Section 7.4(a) or (b);
(f) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or of the Borrower to Holdings or (i) in the case of a Wholly
Owned Subsidiary, to the Subsidiary which owns the remainder of such
Subsidiary's Capital Stock and (ii) in the case of a Subsidiary that is not
a Wholly Owned Subsidiary, pro rata to the holders of the Capital Stock of
--- ----
such Subsidiary;
(g) the Disposition of other assets having a fair market value not to
exceed $500,000 in the aggregate for any fiscal year of the Borrower;
(h) any Disposition or Recovery Event, provided, that (i) the
--------
requirements of Section 2.12(b) are complied with in connection therewith
and (ii) the aggregate amount of all such Dispositions in any fiscal year
of the Borrower shall not exceed $5,000,000;
(i) Dispositions of assets sold pursuant to a Sale/Leaseback
Transaction permitted under Section 7.11;
(j) Dispositions of non-core assets acquired pursuant to Acquisitions
or Subsidiary Acquisitions permitted under Section 7.8(i);
(k) Dispositions of all or any portion of the Capital Stock or assets
of any Foreign Subsidiary;
(l) Dispositions (i) in connection with the Ripon Transition and (ii)
of the Capital Stock of, or all or any portion of the assets of, ALSA;
(m) Dispositions by Holdings to the Borrower pursuant to the Capital
Contribution;
(n) sales and transfers of Receivables, equipment loans and related
assets (including contract rights) by the Borrower and its Subsidiaries
(including the Securitization Entities) in connection with the Initial
Receivables Facility or any other Permitted Receivables Financing pursuant
to the applicable Securitization Documentation, provided, that (i) the
--------
principal amount of cash and the purchase money notes received as
consideration in any such sale or transfer (when aggregated with the cash
and purchase money notes received as consideration upon all such other
sales of Receivables, equipment loans and related assets during the ninety
days preceding such sale or transfer) is at least equal to 75% of the
aggregate face amount of all Receivables so sold or
77
transferred on such day and during the ninety preceding days, (ii) the
Borrower and its Subsidiaries may only receive such purchase money notes to
the extent such purchase money notes are issuable pursuant to the
Securitization Documentation for the Initial Receivables Facility as in
effect on the date hereof and (iii) in the event that an "Event of Default"
occurs in respect of the Borrower under Section 8(k) of the Loan and
Security Agreement, dated as of May 5, 1998, among Alliance Laundry
Receivables Warehouse LLC, the financial institutions party thereto as
lenders, and Xxxxxx Commercial Paper Inc., as agent for such lenders, or
any successor or similar provision in any other Securitization
Documentation with respect to any Permitted Receivables Financing, the
consideration for any such sale or transfer during the continuation of any
such Event of Default shall include cash at least equal to 75% of the face
amount of any Receivable sold pursuant to any such sale or transfer unless
otherwise approved by the Administrative Agent;
(o) Restricted Payments permitted under Section 7.6;
(p) leases and licenses of real or personal property (including
Intellectual Property) in the ordinary course of business;
(q) Dispositions of all or any portion of the Capital Stock or assets
of any Subsidiary (other than a Material Subsidiary);
(r) sales of equipment loans on a non-recourse basis to a third
parties in an amount equal to at least 75% of the fair market value
thereof;
(s) the sale of Accounts Receivable pursuant to arrangements
customary to the industry; and
(t) Dispositions of (i) Cash Equivalents and (ii) Investments (other
than Acquisitions);
provided, however, that to the extent that any of the foregoing constitute an
-------- -------
Asset Sale, at least 75% of the consideration received in connection with such
Asset Sale shall consist of cash, Cash Equivalents, Capital Stock of a
Subsidiary or fixed assets used or useful in the business of the Borrower and
its Subsidiaries.
7.6 Limitation on Restricted Payments. Declare or pay any dividend
---------------------------------
(other than dividends payable solely in similar Capital Stock of the Person
making such dividend or by increasing the liquidation preference of any such
Capital Stock) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of Holdings (including,
without limitation, the Seller Preferred Membership Interests), the Borrower or
any Subsidiary, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of Holdings, the Borrower or any Subsidiary
(collectively, "Restricted Payments"), except that:
-------------------
(a) any Subsidiary may make Restricted Payments to the holders of its
Capital Stock ratably in accordance with their respective ownership
interests;
78
(b) so long as no Default or Event of Default shall have occurred and
be continuing, the Borrower may pay dividends or distributions to Holdings
to permit Holdings to (i) (A) purchase Holdings' Capital Stock or options
to purchase Capital Stock from present or former officers or employees of
Holdings, the Borrower or any of their respective Subsidiaries upon the
death, disability or termination of employment of such officer or employee
or (B) make payments on promissory notes ("Management Notes") issued by
----------------
Holdings to any such officers or employees of Holdings, the Borrower or any
of their respective Subsidiaries to finance the purchase of Capital Stock
or options to purchase Capital Stock upon the death, disability or
termination of employment of any such officer or employee, provided, that
--------
the aggregate amount of payments (not including the forgiveness of any
Indebtedness described in Section 7.8(o)) under this clause (i) subsequent
to the date hereof (net of any proceeds received by Holdings subsequent to
the date hereof in connection with resales of any Capital Stock or options
to purchase Capital Stock so purchased) shall not exceed $1,000,000 during
the first year after the Closing Date, $2,000,000 during the second year
after the Closing Date or $5,000,000 in the aggregate subsequent to the
Closing Date; provided, that Holdings shall also be permitted to make such
--------
purchases with the Net Cash Proceeds to Holdings or the Borrower from any
"key-man" life insurance policies received after the Closing Date, (ii) pay
fees, expenses and other amounts to the Sponsor and its Control Investment
Affiliates expressly permitted by Section 7.10 and (iii) to pay directors'
fees and expenses and indemnity obligations;
(c) the Borrower may pay dividends or distributions to Holdings to
permit Holdings to (i) pay corporate overhead expenses incurred in the
ordinary course of business not to exceed $1,500,000 in any fiscal year and
(ii) pay any taxes which are due and payable by Holdings and the Borrower
as part of a consolidated group;
(d) dividends or distributions paid by the Borrower to Holdings
pursuant to the Intercompany Distribution in an aggregate amount, together
with the aggregate principal amount of Indebtedness incurred pursuant to
Section 7.2(g), not to exceed $269,500,000 plus the amount of any purchase
price adjustment required to be paid by Holdings pursuant to the Merger
Agreement (as in effect on the date hereof);
(e) Restricted Payments by Holdings pursuant to the Recapitalization
shall be permitted;
(f) cash distributions by the Borrower to Holdings and by Holdings to
the holders of its Capital Stock to enable such holders to make tax
payments resulting from the net income of the Borrower and its Subsidiaries
in any fiscal year (including the tax distributions contemplated by Article
IV of the limited liability company agreement of the Borrower as in effect
on the date hereof), provided that prior to the making of each such
--------
distribution, the Borrower shall have delivered to the Administrative Agent
a certificate of a Responsible Officer of the Borrower setting forth in
reasonable detail the highest federal, state and local tax rates applicable
to such holders (after giving effect to deductions for such state and local
taxes applicable thereto);
(g) cash distributions by the Borrower to Holdings, to enable
Holdings to make payments under the Transition Services Agreement, dated as
of May 5, 1998, between
79
Raytheon and Holdings (as in effect on the date hereof) in connection with
the Recapitalization; and
(h) repurchases of Capital Stock deemed to occur as a result of the
surrender of such Capital Stock for cancellation in connection with the
exercise of stock options.
7.7 Limitation on Capital Expenditures. Make or commit to make any
----------------------------------
Capital Expenditure, except (a) Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business in any fiscal year of the
Borrower set forth below not exceeding the amount set forth below opposite such
fiscal year:
Fiscal Year Amount
------------- --------
1998 $17,500,000
1999 $25,000,000
2000 and thereafter $15,000,000
; provided, that (i) up to 50% of any such amount referred to above (without
--------
giving effect to any additional Capital Expenditures permitted during such
fiscal year pursuant to clause (ii) below), if not so expended in the fiscal
year for which it is permitted (as to such fiscal year, the "CapEx Carryforward
------------------
Amount"), may be carried over for expenditure in the next succeeding fiscal
------
year, (ii) Capital Expenditures made pursuant to this clause (a) during any
fiscal year shall be deemed made, first, in respect of amounts permitted for
-----
such fiscal year as provided above and, second, in respect of amounts carried
------
over from the prior fiscal year pursuant to subclause (i) above, (b) Capital
Expenditures made with the proceeds of any Reinvestment Deferred Amount, (c)
Capital Expenditures in any fiscal year made with the then unused Permitted
Expenditure Amounts and (d) Capital Expenditures attributable to all or a
portion of the cost of Acquisitions and Subsidiary Acquisitions permitted under
Section 7.8.
7.8 Limitation on Investments. Make any advance, loan, extension of
-------------------------
credit (by way of guaranty or otherwise) or capital contribution to, or purchase
any Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting an ongoing business from, or make any other investment in,
any other Person (all of the foregoing, "Investments"), except:
-----------
(a) extensions of trade credit in the ordinary course of business,
including Accounts Receivable;
(b) investments in cash and Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 7.2(b) and (e) ;
(d) loans and advances to employees of Holdings, the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business (including,
without limitation, for travel, entertainment and relocation expenses) in
an aggregate amount for Holdings, the Borrower and Subsidiaries of the
Borrower not to exceed $500,000 at any one time outstanding;
80
(e) Investments by Holdings in the Borrower and the Subsidiary
Guarantors, including Investments in respect of the Intercompany
Distribution;
(f) Investments existing on the date hereof and listed on Schedule
7.8;
(g) Investments in assets useful in the Borrower's or its
Subsidiaries' business (including through Acquisitions or Subsidiary
Acquisitions) made by the Borrower or any of its Subsidiaries with the
proceeds of any Reinvestment Deferred Amount;
(h) Investments (other than those relating to the incurrence of
Indebtedness permitted by Section 7.8(c)) by Holdings, the Borrower or any
of its Subsidiaries in the Borrower or any Person that, prior to such
investment, is a Subsidiary Guarantor;
(i) Acquisitions and other Investments by the Borrower and the
Subsidiary Guarantors (other than Alliance Laundry Corporation) (including,
without limitation, Investments by the Borrower and the Subsidiary
Guarantors in Subsidiaries that are not Subsidiary Guarantors), provided
--------
that (i) (A) the aggregate consideration (including assumed Indebtedness,
but excluding consideration in the form of Capital Stock of Holdings) for
all such Acquisitions after the Closing Date shall not exceed the sum of
(x) $30,000,000 and (y) the then unused Permitted Expenditure Amount at
such time, (B) if any Consolidated Senior Debt is incurred in connection
with any such Acquisition after giving effect to such Acquisition on a pro
forma basis as if such Acquisition has occurred on the first day of the
most recent period of four consecutive fiscal quarters, the Consolidated
Senior Debt Leverage Ratio on the last day of such period would not have
been greater than 3.75 to 1.0, (C) prior to the consummation of any such
Acquisition, the Administrative Agent shall have received a certificate of
a Responsible Officer setting forth the calculations required to determine
compliance with clauses (A) and (B) above and certifying that the
conditions set forth in this Section 7.8(i) have been satisfied and (D) no
Default or Event of Default shall have then occurred and be continuing or
would result therefrom and (ii) after giving effect to any such Investment
(other than an Acquisition), the aggregate outstanding or unreturned amount
(including the aggregate consideration (including assumed Indebtedness) for
all Subsidiary Acquisitions, but excluding any consideration in the form of
Capital Stock of Holdings) of all such Investments (other than
Acquisitions) (including Investments in the nature of sales and transfers
of assets for less than fair market value and Guarantee Obligations
pursuant to Section 7.2(e) or 7.2(t)) made subsequent to the Closing Date
shall not exceed the sum of (A) $5,000,000, (B) an amount equal to the
excess of (x) the Designated Equity Amounts as of the date of such
Investment over (y) the then unused Permitted Expenditure Amounts based
upon such Designated Equity Amounts, (C) the Net Cash Proceeds from any
Disposition pursuant to Section 7.5(l)(ii) (other than any net Cash
Proceeds applied to prepay Loans) and (D) any other cash received on any
such Investments, provided, further, that the conversion of any
-------- -------
Indebtedness owed to the Borrower or any Subsidiary by any Subsidiary that
is not a Subsidiary Guarantor into equity of such Subsidiary shall not
constitute an additional Investment in such Subsidiary by the Borrower or
such Subsidiary for purposes of clause (ii) of the limitation contained in
the immediately preceding proviso;
81
(j) Investments received in connection with the collection of
Accounts Receivable in the ordinary course of business and Investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in good faith settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(k) Investments received in connection with any Asset Sale or other
Disposition permitted hereunder;
(l) loans and advances (including in respect of Notes Receivable) to
suppliers and customers or users of the Borrower or any Subsidiary's
products or customers of distributors of such products in the ordinary
course of business consistent with past practice;
(m) Investments resulting from the contribution or transfer of the
Capital Stock or assets of ALSA to a joint venture entered into by the
Borrower after the Closing Date;
(n) Investments by the Borrower or any of its Subsidiaries arising
out of sales and transfers of Receivables, equipment loans and related
assets pursuant to Section 7.5(n);
(o) loans and advances to members of management of Holdings in an
aggregate amount not to exceed $2,000,000 plus payment-in-kind interest at
any time outstanding in connection with the acquisition of Capital Stock of
Holdings by such members of management on the Closing Date pursuant to the
Recapitalization;
(p) Investments in ALSA not to exceed $1,000,000 in the aggregate;
(q) Investments in respect of the purchase money notes described in
Section 7.5(n);
(r) Investments (i) arising out of any repurchase pursuant to Section
7.9 of Senior Subordinated Notes or other Indebtedness permitted under
Section 7.2(f) or (ii) any repurchase of Indebtedness in connection with
the refinancing thereof to the extent permitted under Section 7.2;
(s) Investments by Subsidiaries which are not Subsidiary Guarantors
in the Borrower or any other Subsidiary; and
(t) Investments arising out of the Limited Originator Recourse.
7.9 Limitation on Optional Payments and Modifications of Debt
---------------------------------------------------------
Instruments. (a) Make or offer to make any optional or voluntary payment,
-----------
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, the Senior Subordinated Notes (or any other Indebtedness permitted
under Section 7.2(f)) or the Subordinated Seller Notes (or any other
Indebtedness permitted under Section 7.2(h)) (except for the exchange of the
9% Senior Subordinated Note Due 2008 for senior subordinated notes having
substantially the same terms and conditions contemplated under the Senior
Subordinated Note Indenture or for the refinancing of the Senior Subordinated
Notes and Subordinated Seller Notes in accordance with Section 7.2(f)
82
or 7.2(h), as the case may be), provided that, so long as no Default or Event
--------
of Default shall have occurred and by continuing or would result therefrom, the
Borrower may repurchase or redeem Senior Subordinated Notes in an aggregate
principal amount not to exceed an amount equal to the excess of (x) 50% of the
aggregate Prepayment Amounts declined by the Term Loan Lenders pursuant to
Section 2.18(d) as of the date of such repurchase or redemption over (y) the
then unused Permitted Expenditure Amounts based upon such Prepayment Amounts,
(b) amend, modify or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of the Senior
Subordinated Notes (or any other Indebtedness permitted under Section 7.2(f)) or
the Subordinated Seller Notes (or any other Indebtedness permitted under Section
7.2(h)) (other than any such amendment, modification, waiver or other change
which (i) (A) would extend the maturity or reduce the amount of any payment of
principal thereof, reduce the rate or extend the date for payment of interest
thereon or relax any covenant or other restriction applicable to the Borrower or
any of its Subsidiaries and (B) does not involve the payment of a consent fee or
(ii) is not adverse in any respect to the interests of the Lenders in the
reasonable opinion of the Administrative Agent), (c) designate any Indebtedness
(other than the Obligations) as "Designated Senior Indebtedness" or "Senior
Credit Facilities" for the purposes of the Senior Subordinated Note Indenture,
(d) amend its certificate of incorporation in any manner determined by the
Administrative Agent to be adverse to the Lenders or (e) make, offer to make or
(after giving effect to any applicable subordination provisions) become
obligated to make any repurchase of any Seller Securities upon any "change of
control" (as such term is defined in the Seller Securities).
7.10 Limitation on Transactions with Affiliates. Enter into any
------------------------------------------
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than Holdings,
the Borrower or any Subsidiary Guarantor) unless such transaction is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of business
of Holdings, the Borrower or such Subsidiary, as the case may be, and (c) upon
fair and reasonable terms no less favorable to Holdings, the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate or Holdings, the
Borrower or such Subsidiary. Notwithstanding the foregoing, the following
transactions shall be permitted: (i) the Borrower and its Subsidiaries may pay
management, advisory or similar fees and expenses to the Sponsor and its Control
Investment Affiliates in an aggregate amount not to exceed $1,000,000 in any
fiscal year of the Borrower (plus reasonable out-of-pocket expenses incurred by
Sponsor and its Affiliates in providing services to Holdings and the Borrower in
connection with the Recapitalization or in connection with ongoing services
provided from time to time), (ii) the Recapitalization shall be permitted, (iii)
Holdings, the Borrower and their respective Subsidiaries may pay customary fees
to, and the reasonable out-of-pocket expenses of, its Board of Directors and may
provide customary indemnities for the benefit of members of its Board of
Directors, (iv) the payment by Holdings or the Borrower, in connection with the
Recapitalization, any Acquisition, divestiture or financing transaction that is
consummated by Holdings, the Borrower or any of their respective Subsidiaries,
of a transaction fee and expenses to the Sponsor and its Affiliates pursuant to
the Xxxx Advisory Services Agreement (as in effect on the date hereof) for such
transaction, (v) transactions with Subsidiaries that are not Subsidiary
Guarantors, joint venture partners or purchasers or sellers of goods or
services, in each case in the ordinary course of business (including, without
limitation, pursuant to joint venture agreements) and otherwise in compliance
with the terms of the Loan Documents which are fair to the Borrower or its
Subsidiaries, in the good faith determination of the Board of
83
Managers of the Borrower or the senior management thereof, or are on terms at
least as favorable as might reasonably been obtained at such time from an
unaffiliated party, (vi) any employment agreement entered into by Holdings or
any of its Subsidiaries or employee compensation payments in the ordinary course
of business and consistent with past practices of the Borrower or such
Subsidiary, (vii) Restricted Payments that are permitted by the provisions of
Section 7.6, (viii) payments or loans to employees or consultants which are
approved by the Board of Managers in good faith, (ix) in the case of foreign
joint ventures, transfers of equipment for sale outside of North America in
exchange for value not less than the Borrower's cost of producing such equipment
and (x) transactions effected pursuant to a Permitted Receivables Financing
(including the servicing of Receivables sold thereunder by the Borrower or any
of its Subsidiaries).
7.11 Limitation on Sales and Leasebacks. Enter into any arrangement
----------------------------------
with any Person providing for the leasing by Holdings, the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by Holdings, the Borrower or such Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of Holdings, the Borrower or
such Subsidiary (a "Sale/Leaseback Transaction"), except for Sale/Leaseback
--------------------------
Transactions by the Borrower and its Subsidiaries with an aggregate sales price
not to exceed $2,500,000 during the terms of this Agreement.
7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year
---------------------------------------
of the Borrower to end on a day other than December 31 or change the Borrower's
method of determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into or suffer to
-------------------------------------
exist or become effective any agreement which prohibits or limits the ability of
Holdings, the Borrower or any of their respective Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its Property or revenues, whether
now owned or hereafter acquired, to secure the Obligations or, in the case of
any Guarantor, its obligations under the Guarantee and Collateral Agreement,
other than (a) this Agreement and the other Loan Documents, (b) any agreements
governing any purchase money Liens or Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby), (c) any agreement relating to a
Disposition of Property by the Borrower or any of its Subsidiaries (in which
case, any prohibition or restriction shall only be effective against the
Property to be Disposed in such Disposition), (d) any agreement with respect to
Indebtedness of a Foreign Subsidiary permitted under Section 7.2(p) (in which
case, any prohibition or restriction shall only be effective against the
Property of such Foreign Subsidiary), (e) the Senior Subordinated Note Indenture
(or any agreement governing any other Indebtedness permitted under Section
7.2(f)), (f) any agreement which prohibits the creation of Liens to secure the
Senior Subordinated Notes (or any agreement governing any other Indebtedness
permitted under Section 7.2(f)) or the Subordinated Seller Note (or any
agreement governing any other Indebtedness permitted under Section 7.2(h)), (g)
the Securitization Documentation (in which case, any prohibition or restriction
shall only be effective against the Property of the relevant Securitization
Entities), (h) customary non-assignment provisions in leases entered into in the
ordinary course of business and (i) any agreements relating to Liens permitted
under Section 7.3(g), 7.3(k), 7.3(n), 7.3(p), 7.3(q) 7.3(r), 7.3(v) or 7.3(w)
(in which case, any prohibition or restriction shall only be effective against
the Property subject to the relevant Lien).
84
7.14 Limitation on Restrictions on Subsidiary Distributions. Enter
------------------------------------------------------
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary, (b) make Investments in the
Borrower or any other Subsidiary or (c) transfer any of its assets to the
Borrower or any other Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement which has been entered into in connection with the Disposition
of all or substantially all of the Capital Stock or assets of such Subsidiary,
(iii) applicable law, (iv) the Senior Subordinated Note Indenture (or any other
agreement governing Indebtedness permitted under Section 7.2(f)), (v) customary
provisions restricting the assignment of rights under contracts, (vi) the
Securitization Documentation (in which case, any prohibition or restriction
shall only be effective against the relevant Securitization Entities), (vii) any
agreement with respect to Indebtedness of a Foreign Subsidiary permitted under
Section 7.2(p) or Indebtedness of a Subsidiary permitted under Section 7.2(j)
(in which case, any prohibition or restriction shall only be effective against
such Subsidiary), (viii) customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with past practices, (ix)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (c) above on
the property so acquired, (x) any agreement for the sale of a Subsidiary that
restricts distributions by that Subsidiary pending its sale, (xi) provisions
with respect to the disposition or distribution of assets or property in joint
venture agreements and other similar agreements entered into in the ordinary
course of business, (xii) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into the ordinary course of
business and (xiii) restrictions on rights to dispose of assets subject to Liens
permitted under Section 7.3(g), 7.3(k), 7.3(n), 7.3(p), 7.3(r), 7.3(s), 7.3(v)
or 7.3(w).
7.15 Limitation on Lines of Business. Enter into any business,
-------------------------------
either directly or through any Subsidiary, except for those businesses in
which the Borrower and its Subsidiaries are engaged on the date of this
Agreement (after giving effect to the Recapitalization), including, without
limitation, businesses and activities related to the cleansing of textiles
and/or garments and, in each case, activities directly related thereto or
ancillary, complementary or reasonably related thereto.
7.16 Limitation on Amendments to Recapitalization Documents. Amend,
------------------------------------------------------
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and
conditions of the Merger Agreement or any other document delivered by Raytheon,
Holdings or any of their affiliates in connection therewith except to the extent
that any such amendment, supplement or modification could not reasonably be
expected to have a Material Adverse Effect.
7.17 Limitation on Activities of Holdings and Alliance Laundry
---------------------------------------------------------
Corporation. In the case of Holdings and Alliance Laundry Corporation,
-----------
notwithstanding anything to the contrary in this Agreement or any other Loan
Document, (a) conduct, transact or otherwise engage in, or commit to conduct,
transact or otherwise engage in, any business or operations other than (i) in
the case of Holdings, those incidental to its ownership of the Capital Stock of
its Subsidiaries and those incidental to Investments by or in Holdings permitted
hereunder, (ii) those incidental to the issuance of the Senior Subordinated
Notes (or any other Indebtedness permitted under Section 7.2(f)), (iii)
activities incidental to the maintenance of its existence and compliance with
85
applicable laws and legal, tax and accounting matters related thereto and
activities relating to its employees, (iv) activities relating to the
performance of obligations under the Loan Documents to which it is a party and
(v) the receipt and payment of Restricted Payments permitted under Section 7.6,
(b) incur, create, assume or suffer to exist any Indebtedness or other
liabilities or financial obligations, except (i) nonconsensual obligations
imposed by operation of law, (ii) pursuant to the Loan Documents to which it is
a party, (iii) obligations with respect to its Capital Stock, (iv) in the case
of Holdings, in respect of the Senior Subordinated Notes (or any other
Indebtedness permitted under Section 7.2(f)), the Subordinated Seller Notes and
the Management Notes (or any other Indebtedness permitted under Section 7.2(h),
(v) obligations to its employees, officers and directors not prohibited
hereunder (vi) obligations under the Recapitalization Documents (as in effect on
the date hereof), and (vii) in the case of Alliance Laundry Corporation, in
respect of the Senior Subordinated Notes (or any other Indebtedness permitted
under Section 7.2(f)), or (c) own, lease, manage or otherwise operate any
properties or assets (including cash (other than cash received in connection
with dividends paid by the Borrower in accordance with Section 7.6 pending
application in the manner contemplated by said Section) and Cash Equivalents)
other than, in the case of Holdings only, the ownership of shares of Capital
Stock of the Borrower or in respect of notes issued to Holdings by management in
respect of the purchase of its Capital Stock.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes
due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other written statement furnished by
it at any time under or in connection with this Agreement or any such other
Loan Document shall prove to have been inaccurate in any material respect
on or as of the date made or deemed made; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to Holdings and the Borrower only) or Section 7 of
this Agreement; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days after the
earlier of (x) the date upon which the Borrower knows or should reasonably
be expected to know the existence of such default or (y) the date upon
which the Borrower receives notice of such default from the Administrative
Agent or any Lender; or
86
(e) Holdings, the Borrower or any of their respective Subsidiaries
shall (i) default in making any payment of any principal of any
Indebtedness (including, without limitation, any Guarantee Obligation, but
excluding the Loans) on the scheduled or original due date with respect
thereto beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness has created; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the
period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause,
or to permit the holder or beneficiary of such Indebtedness (or a trustee
or agent on behalf of such holder or beneficiary) to cause, with the giving
of notice if required, such Indebtedness to become due prior to its stated
maturity or (in the case of any such Indebtedness constituting a Guarantee
Obligation) to become payable; provided, that a default, event or condition
--------
described in clause (i), (ii) or (iii) of this paragraph (e) shall not at
any time constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i), (ii)
and (iii) of this paragraph (e) shall have occurred and be continuing with
respect to Indebtedness the outstanding principal amount of which exceeds
in the aggregate $5,000,000; or
(f) (i) Holdings, the Borrower or any of their respective Material
Subsidiaries shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or Holdings, the
Borrower or any of their respective Material Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against Holdings, the Borrower or any of their respective
Material Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order
for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against Holdings, the Borrower or any of their
respective Material Subsidiaries any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) Holdings, the Borrower or any of their
respective Material Subsidiaries shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings, the
Borrower or any of their respective Material Subsidiaries shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due; or
87
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
Holdings, the Borrower or any of their respective Subsidiaries involving in
the aggregate a liability (to the extent not paid or covered by insurance)
of $2,500,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 30 days
from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason, to be
in full force and effect in all material respects (other than in accordance
with its terms), or any Loan Party or any Affiliate of any Loan Party shall
so assert, or any Lien created by any of the Security Documents shall cease
to be enforceable and of the same effect and priority purported to be
created thereby as to Collateral having an aggregate value in excess of
$1,000,000; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect other than in accordance with its terms or any Loan Party shall so
assert; or
(k) (i) Prior to the effectiveness of an initial registered public
offering of common limited liability company interests by Holdings, (A) the
Permitted Investors and the Permitted Co-Investors together shall cease to
have the power to vote or direct the voting of securities having at least
60% of the ordinary voting power for the election of directors or managers
of Holdings (determined on a fully diluted basis), (B) the Permitted
Investors and the Permitted Co-Investors together shall cease to own of
record and beneficially at least 70% of the outstanding common limited
liability company interests of Holdings owned by the Permitted Investors
and the Permitted Co-Investors on the Closing Date, (C) the Permitted
Investors shall cease to have the power to vote or direct the voting of
securities having at least 40% of the ordinary voting power for the
election of directors or managers of Holdings (determined on a fully
diluted basis), (D) the Permitted Investors shall cease to own of record
and beneficially at least 70% of the outstanding common limited liability
company interests of Holdings owned by the Permitted Investors
88
on the Closing Date or (E) the board of directors or managers of Holdings
shall cease to consist of a majority of directors or managers appointed by
the Permitted Investors; (ii) after the effectiveness of an initial
registered public offering of common limited liability company interests by
Holdings, (A) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), excluding the Permitted Investors, shall (x) become, or
obtain rights (whether by means or warrants, options or otherwise) to
become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act), directly or indirectly, of a greater percentage of
the outstanding common limited liability company interests of Holdings than
the percentage of such common limited liability company interests then
owned by the Permitted Investors or (y) have the power to vote or direct
the voting of a greater percentage of the securities having the ordinary
voting power for the election of directors or managers of Holdings
(determined on a fully diluted basis) than the percentage of such
securities then owned by the Permitted Investors; (iii) Holdings shall
cease to own and control, of record and beneficially, directly, 100% of
each class of outstanding Capital Stock of the Borrower free and clear of
all Liens (except Liens created by the Guarantee and Collateral Agreement);
or (iv) a Specified Change of Control shall occur; or
(l) (i) The Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations or the
obligations of the Subsidiary Guarantors under the Guarantee and Collateral
Agreement, as the case may be, as provided in the Senior Subordinated Note
Indenture, or any Loan Party, any Affiliate of any Loan Party, the trustee
in respect of the Senior Subordinated Notes or the holders of at least 25%
in aggregate principal amount of the Senior Subordinated Notes shall so
assert or (ii) the Subordinated Seller Notes shall cease, for any reason,
to be validly subordinated to the Obligations;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon the Revolving Credit Commitments shall immediately terminate; and (ii)
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable. With respect to all Letters
of Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this Section, the
89
Borrower shall at such time deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit. Amounts held in such cash collateral account
shall be applied by the Administrative Agent to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay other obligations of the Borrower hereunder and under the other
Loan Documents. After all such Letters of Credit shall have expired or been
fully drawn upon, all Reimbursement Obligations shall have been satisfied and
all other obligations of the Borrower hereunder and under the other Loan
Documents shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Borrower (or such other Person as
may be lawfully entitled thereto).
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and
-----------
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes each Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein or in any other Loan Document, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.
Without limiting the foregoing, it is expressly understood and agreed that the
Agents shall not be responsible in determining whether the conditions set forth
in Section 5 have been satisfied.
9.2 Delegation of Duties. Each Agent may execute any of its duties
--------------------
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of their
----------------------
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party hereto or thereto to perform its
obligations hereunder or thereunder. The Agents shall not be under any
90
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
9.4 Reliance by the Agents. Each Agent shall be entitled to rely,
----------------------
and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation reasonably
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to Holdings or the other Loan Parties),
independent accountants and other experts selected by the Administrative Agent.
The Agents may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Administrative Agent. Each Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Lenders required to so act as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. Each Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Lenders required to so act, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.
9.5 Notice of Default. No Agent shall be deemed to have knowledge or
-----------------
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender, Holdings or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative
Agent receives such a notice, the Administrative Agent shall give notice thereof
to the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders (or, if so specified by this Agreement, all Lenders); provided that
--------
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
----------------------------------------
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions
91
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party which may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent in
---------------
its capacity as such (to the extent not reimbursed by Holdings or the Borrower
and without limiting the obligation of Holdings or the Borrower to do so),
ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
--------
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements which are found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from such Agent's gross negligence or willful misconduct. The
agreements in this Section 9.7 shall survive the payment of the Loans and all
other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its affiliates
--------------------------------
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent was not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent may
------------------------------
resign as Administrative Agent upon 30 days' prior written notice to the
Lenders, the Syndication Agent, the Issuing Lenders and the Swing Line Lender
and the Borrower. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the other Loan Documents, then the Required
Lenders shall appoint from among the Lenders a successor agent for the Lenders,
which successor agent shall (unless an Event of Default under Section 8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and
92
approval, and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. If no successor agent has accepted
appointment as Administrative Agent by the date that is 30 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nonetheless become effective and the
Required Lenders shall perform the duties of the Administrative Agent until such
time as the Required Lenders appoint a successor agent as provided for above.
The Syndication Agent may, at any time, by notice to the Lenders and the
Administrative Agent, resign as Syndication Agent hereunder, whereupon the
duties, rights, obligations and responsibilities hereunder shall automatically
be assumed by, and inure to the benefit of, the Administrative Agent, without
any further act by the Syndication Agent, the Administrative Agent or any
Lender. After any retiring Agent's resignation as Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent under this Agreement and the other Loan
Documents.
9.10 Authorization to Release Liens. The Administrative Agent is
------------------------------
hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Borrower or any of its Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement or which has been
consented to in accordance with Section 10.1.
9.11 The Arranger. The Arranger, in its capacity as such, shall have
------------
no duties or responsibilities, and shall incur no liability, under this
Agreement and the other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other Loan
----------------------
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may, or
(except with respect to amendments to the Security Documents contemplated under
Section 6.10, with the written consent of the Required Lenders) the Agents and
each Loan Party party to the relevant Loan Document may, from time to time, (a)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders, or the Agents, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
-------- -------
modification shall (i) forgive the principal amount or extend the final
scheduled date of maturity of any Loan or Reimbursement Obligation, extend the
scheduled date of any amortization payment in respect of any Term Loan, reduce
the stated rate of any interest or fee payable hereunder or extend the scheduled
date of any payment thereof, or increase the stated amount or extend the
expiration date of any Commitment of any Lender, in each case without the
consent of each Lender directly affected thereby; (ii) amend, modify or waive
any provision of this Section or reduce any percentage specified in the
definition of Required Lenders or Required Prepayment Lenders, consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under
93
this Agreement and the other Loan Documents, release all or substantially
all of the Collateral or release all or substantially all of the Subsidiary
Guarantors from their obligations under the Guarantee and Collateral Agreement,
in each case without the consent of all Lenders, except as otherwise provided in
this Agreement or any other Loan Document; (iii) amend, modify or waive any
condition precedent to any extension of credit under the Revolving Credit
Facility set forth in Section 5.2 (including, without limitation, in connection
with any waiver of an existing Default or Event of Default) or amend, modify or
waive any provision of Section 2.3 without the consent of the Majority Revolving
Credit Facility Lenders; (iv) reduce the percentage specified in the definition
of Majority Facility Lenders with respect to any Facility without the written
consent of all Lenders under such Facility; (v) amend, modify or waive any
provision of Section 9 without the consent of the Agents; (vi) amend, modify or
waive any provision of Section 2.6 or 2.7 without the written consent of the
Swing Line Lender; (vii) amend, modify or waive any provision of Section 2.18
without the consent of each Lender directly affected thereby or amend, modify or
waive any provision of Section 2.12(a), 2.12(b) or 2.12(c) without the consent
of the Required Prepayment Lenders; (viii) amend, modify or waive any provision
of Section 3 without the consent of the Issuing Lenders and the Administrative
Agent; or (ix) amend, modify or waive Section 9.11 without the consent of the
Arranger. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the Loan
Parties, the Lenders, the Agents and all future holders of the Loans. In the
case of any waiver, the Loan Parties, the Lenders and the Agents shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon. Any
such waiver, amendment, supplement or modification shall be effected by a
written instrument signed by the parties required to sign pursuant to the
foregoing provisions of this Section; provided, that delivery of an executed
--------
signature page of any such instrument by facsimile transmission shall be
effective as delivery of a manually executed counterpart thereof.
10.2 Notices. Except as otherwise provided herein, all notices,
-------
requests and demands to or upon the respective parties hereto to be effective
shall be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered,
or three Business Days after being deposited in the mail, postage prepaid, or,
in the case of telecopy notice, when received, addressed (a) in the case of
Holdings, the Borrower and the Administrative Agent, as follows and (b) in the
case of the Lenders, as set forth on Schedule 1.1A or, in the case of a Lender
which becomes a party to this Agreement pursuant to an Assignment and
Acceptance, in such Assignment and Acceptance or (c) in the case of any party,
to such other address as such party may hereafter notify to the other parties
hereto:
Holdings: Alliance Laundry Holdings LLC
c/o Bain Capital, Inc.
Two Xxxxxx Xxxxx
0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxx
Telecopy: (000) 000-0000
with copies to: Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
00
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Learner
Telecopy: (000) 000-0000
The Borrower: Alliance Laundry Systems LLC
X.X. Xxx 000
Xxxxxxx Xxxxxx
Xxxxx, XX 00000-0000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
with copies to: Xxxx Capital, Inc.
Two Xxxxxx Xxxxx
0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxx
Telecopy: (000) 000-0000
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Learner
Telecopy: (000) 000-0000
The Syndication Agent: Xxxxxx Commercial Paper Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent: General Electric Capital Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx
Telecopy: (000) 000-0000
provided that any notice, request or demand to or upon either Agent or any
--------
Lender shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of either Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The
95
rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
10.5 Payment of Expenses. The Borrower agrees (a) to pay or
-------------------
reimburse the Agents and the Arranger for all their reasonable out-of-pocket
costs and expenses incurred in connection with the development, preparation,
syndication and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, (b) to
pay or reimburse each Lender and the Agents for all its reasonable costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the reasonable fees and disbursements
of counsel (including the allocated fees and expenses of in-house counsel) to
each Lender and of counsel to the Agents, (c) to pay, indemnify, and hold each
Lender, the Arranger and the Agents harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise (other than excise taxes imposed in lieu of
income taxes) and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender, the Arranger and the
Agents and their respective officers, directors, employees, affiliates, agents
and controlling persons (each, an "Indemnitee") harmless from and against any
----------
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement and performance
of this Agreement, the other Loan Documents and any such other documents,
including, without limitation, any of the foregoing relating to the use of
proceeds of the Loans or the Letters of Credit or the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of Holdings, the Borrower any of their respective Subsidiaries or any
of the Properties (all the foregoing in this clause (d), collectively, the
"Indemnified Liabilities"), provided, that the Borrower shall have no obligation
------------------------ --------
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities (i) are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (ii) arise from disputes
among the Agents or among the Lenders. Without limiting the foregoing, and to
the extent permitted by applicable law, the Borrower agrees not to assert and to
cause its Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries so to waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws that any of them might have by statute or
otherwise against any Indemnitee. The agreements in this Section shall survive
repayment of the Loans and all other amounts payable hereunder.
96
10.6 Successors and Assigns; Participations and Assignments. (a)
------------------------------------------------------
This Agreement shall be binding upon and inure to the benefit of Holdings, the
Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
-----------
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan or other interest for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agents shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event
shall any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or the stated rate of interest
on, the Loans or any fees payable hereunder, or postpone the date of the final
maturity of the Loans or Reimbursement Obligations, in each case to the extent
subject to such participation. The Borrower agrees that if amounts outstanding
under this Agreement and the Loans are due or unpaid after any applicable grace
periods, or shall have been declared or shall have become due and payable upon
the occurrence and during the continuation of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
--------
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 10.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 2.19, 2.20 and 2.21 with respect to its participation
in the Commitments and the Loans and Letters of Credit outstanding from time to
time as if it was a Lender; provided that, in the case of Section 2.20, such
--------
Participant shall have complied with the requirements of said Section and
provided, further, that no Participant shall be entitled to receive any greater
-------- -------
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with applicable
--------
law, at any time and from time to time assign to any Lender or any affiliate or
Approved Fund thereof or, with the consent of the Borrower and the Agents
(which, in each case, shall not be unreasonably withheld or delayed), to an
additional bank, financial institution or other entity (an "Assignee") all or
--------
any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit E, executed by
such Assignee and such Assignor (and, where the consent of the Borrower or the
Agents is required pursuant to the foregoing provisions, by the Borrower and
such other Persons) and delivered to the Administrative Agent
97
for its acceptance and recording in the Register; provided that (i) no such
--------
assignment to an Assignee (other than any Lender or any affiliate or Approved
Fund thereof) shall be in an aggregate principal amount of less than $5,000,000
(other than in the case of an assignment of all of a Lender's interests under
this Agreement), unless otherwise agreed by the Borrower, the Syndication Agent
and the Administrative Agent and (ii) if the Assignor is a Revolving Credit
Lender, such Assignor's rights and obligations with respect to its Revolving
Credit Commitment or any part thereof shall be assigned to an Eligible Assignee.
Any such assignment need not be ratable as among the Facilities. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have (in addition to the rights and obligations
theretofore held by it) the rights and obligations of a Lender hereunder with a
Commitment and/or Loans as set forth therein, and (y) the Assignor thereunder
shall, to the extent provided in such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an Assignor's rights and obligations under this
Agreement, such Assignor shall cease to be a party hereto). Notwithstanding any
provision of this Section, the consent of the Borrower shall not be required for
any assignment which occurs at any time when any Event of Default shall have
occurred and be continuing under Section 8(f) with respect to the Borrower.
(d) The Administrative Agent shall maintain at its address referred
to in Section 10.2 a copy of each Assignment and Acceptance delivered to it and
a register (the "Register") for the recordation of the names and addresses of
--------
the Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders shall treat each Person whose name is recorded in the Register as
the owner of the Loans and any Notes evidencing such Loans recorded therein for
all purposes of this Agreement. Any assignment of any Loan, whether or not
evidenced by a Note, shall be effective only upon appropriate entries with
respect thereto being made in the Register (and each Note shall expressly so
provide). Any assignment or transfer of all or part of a Loan evidenced by a
Note shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Note evidencing such Loan, accompanied by a duly
executed Assignment and Acceptance; thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the Assignor and the designated
Assignee, and the old Notes shall be returned by the Administrative Agent to the
Borrower marked "cancelled". The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other Person
is required by Section 10.6(c), by each such other Person) together with payment
to the Administrative Agent of a registration and processing fee of $3,000
(except that no such registration and processing fee shall be payable (y) in
connection with an assignment by Xxxxxx Commercial Paper Inc. or (z) in the case
of an Assignee which is already a Lender or is an affiliate or Approved Fund of
a Lender or a Person under common management with a Lender), the Administrative
Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower. On or prior to such effective date,
98
the Borrower, at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the Revolving Credit Note and/or
applicable Term Notes, as the case may be, of the assigning Lender) a new
Revolving Credit Note and/or applicable Term Notes, as the case may be, to the
order of such Assignee in an amount equal to the Revolving Credit Commitment
and/or applicable Term Loans, as the case may be, assumed or acquired by it
pursuant to such Assignment and Acceptance and, if the Assignor has retained a
Revolving Credit Commitment and/or Term Loans, as the case may be, upon request,
a new Revolving Credit Note and/or Term Notes, as the case may be, to the order
of the Assignor in an amount equal to the Revolving Credit Commitment and/or
applicable Term Loans, as the case may be, retained by it hereunder. Such new
Note or Notes shall be dated the Closing Date and shall otherwise be in the form
of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
10.7 Adjustments; Set-off. (a) Except to the extent that this
--------------------
Agreement provides for payments to be allocated to a particular Lender or to the
Lenders under a particular Facility, if any Lender (a "Benefitted Lender") shall
-----------------
at any time receive any payment of all or part of the Obligations owing to it,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any portion of such
-------- -------
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to Holdings or the
Borrower, any such notice being expressly waived by Holdings and the Borrower to
the extent permitted by applicable law, upon any amount becoming due and payable
by Holdings or the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) after any applicable grace period, to set off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of Holdings or the Borrower, as the case may be. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
--------
such notice shall not affect the validity of such setoff and application.
99
10.8 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents (and
-----------
the other agreements referred to in Section 2.9) represent the agreement of
Holdings, the Borrower, the Subsidiaries, the Agents, the Arranger and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agents, the Arranger or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
-------------
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each of Holdings and the
-----------------------------------
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to Holdings
or the Borrower, as the case may be, at its address set forth in Section
10.2 or at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
100
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
10.13 Acknowledgements. Each of Holdings and the Borrower hereby
----------------
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) no Agent, Lender or the Arranger has any fiduciary relationship
with or duty to Holdings or the Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between the Administrative Agent, the Syndication Agent and
the Lenders, on one hand, and Holdings and the Borrower, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor;
and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among Holdings, the Borrower and the Lenders.
10.14 Confidentiality. Each of the Agents and the Lenders agrees to
---------------
keep confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement; provided that nothing herein shall prevent any Agent
--------
or any Lender from disclosing any such information (a) to either Agent, any
other Lender or any affiliate of any Lender, (b) to any Participant or Assignee
(each, a "Transferee") or prospective Transferee which agrees in writing to
----------
comply with the provisions of this Section, (c) any of its employees, directors,
agents, attorneys, accountants and other professional advisors, (d) upon the
request or demand of any Governmental Authority having jurisdiction over it (in
which case (except when the relevant Governmental Authority is conducting a
regular examination) the relevant Agent or Lender shall give the Borrower prior
notice thereof to the extent practicable), (e) in response to any order of any
court or other Governmental Authority or as may otherwise be required pursuant
to any Requirement of Law (in which case the relevant Agent or Lender shall give
the Borrower prior notice thereof to the extent practicable), (f) if requested
or required to do so in connection with any litigation or similar proceeding (in
which case the relevant Agent or Lender shall give the Borrower prior notice
thereof to the extent practicable), (g) which has been publicly disclosed other
than in breach of this Section 10.14 by such Agent or Lender, (h) to the
National Association of Insurance Commissioners or any similar organization or
any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender, (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document or (j) to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions of
this Section 10.14).
10.15 Enforceability; Usury. In no event shall any provision of this
---------------------
Agreement, the Notes, or any other instrument evidencing or securing the
indebtedness of the Borrower hereunder ever obligate the Borrower to pay or
allow any Lender to collect interest on the Loans or any other indebtedness of
the Borrower hereunder at a rate greater than the maximum non-
101
usurious rate permitted by applicable law (herein referred to as the "Highest
--------
Lawful Rate"), or obligate the Borrower to pay any taxes, assessments, charges,
-----------
insurance premiums or other amounts to the extent that such payments, when added
to the interest payable on the Loans, would be held to constitute the payment by
the Borrower of interest at a rate greater than the Highest Lawful Rate; and
this provision shall control over any provision to the contrary.
Without limiting the generality of the foregoing, in the event the
maturity of all or any part of the principal amount of the indebtedness of the
Borrower hereunder shall be accelerated for any reason, then such principal
amount so accelerated shall be credited with any interest theretofore paid
thereon in advance and remaining unearned at the time of such acceleration. If,
pursuant to the terms of this Agreement or the Notes, any funds are applied to
the payment of any part of the principal amount of the indebtedness of the
Borrower hereunder prior to the maturity thereof, then (a) any interest which
would otherwise thereafter accrue on the principal amount so paid by such
application shall be canceled, and (b) the indebtedness of the Borrower
hereunder remaining unpaid after such application shall be credited with the
amount of all interest, if any, theretofore collected on the principal amount so
paid by such application and remaining unearned at the date of said application;
and if the funds so applied shall be sufficient to pay in full all the
indebtedness of the Borrower hereunder, then the Lenders shall refund to the
Borrower all interest theretofore paid thereon in advance and remaining unearned
at the time of such acceleration. Regardless of any other provision in this
Agreement, or in any of the written evidences of the indebtedness of the
Borrower hereunder, the Borrower shall never be required to pay any unearned
interest on such indebtedness or any portion thereof, and shall never be
required to pay interest thereon at a rate in excess of the Highest Lawful Rate
construed by courts having competent jurisdiction thereof.
10.16 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE AGENTS, THE
---------------------
ARRANGER AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
102
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
ALLIANCE LAUNDRY HOLDINGS LLC
By:
----------------------------------------
Name:
Title:
ALLIANCE LAUNDRY SYSTEMS LLC
By:
----------------------------------------
Name:
Title:
XXXXXX BROTHERS INC.,
as Arranger
By:
----------------------------------------
Name:
Title:
XXXXXX COMMERCIAL PAPER INC., as
Syndication Agent and as a Lender
By:
----------------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent
and as a
Lender
By:
----------------------------------------
Name:
Title: Duly Authorized Signatory
103
Annex A
-------
PRICING GRID FOR REVOLVING CREDIT LOANS, SWING LINE LOANS,
TERM LOANS AND COMMITMENT FEES
Revolving Revolving
Credit Term Loan Credit Term Loan
Applicable Applicable Applicable Applicable
Margin Margin for Margin for Margin for
Consolidated for Eurodollar Eurodollar Base Rate Base Rate Commitment
Leverage Ratio Loans Loans Loans Loans Fee Rate
---------------------------------------------------------------------------------------------
Greater than
5.5 to 1.0 2.375% 2.625% 1.375% 1.625% 0.500%
Less than or equal
to 5.5 to 1.0
but greater than
5.0 to 1.0 2.125% 2.375% 1.125% 1.375% 0.500%
Less than or equal
to 5.0 to 1.0 but 1.875% 2.125% 0.875% 1.125% 0.375%
Greater than 4.5 to 1.0
less than or equal
to 4.5 to 1.0 1.625% 2.125% 0.625% 1.125% 0.375%
=========================================================================================
Changes in the Applicable Margin with respect to Loans or in the Commitment Fee
Rate resulting from changes in the Consolidated Leverage Ratio shall become
effective on the date (the "Adjustment Date") on which financial statements are
---------------
delivered to the Lenders pursuant to Section 6.1 (but in any event not later
than the 45th day after the end of each of the first three quarterly periods of
each fiscal year or the 90th day after the end of each fiscal year, as the case
may be) and shall remain in effect until the next change to be effected pursuant
to this paragraph. If any financial statements referred to above are not
delivered within the time periods specified above, then, until such financial
statements are delivered, the Consolidated Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than 5.5 to 1. Each determination of
the Consolidated Leverage Ratio pursuant to this definition shall be made with
respect to the period of four consecutive fiscal quarters of the Borrower ending
at the end of the period covered by the relevant financial statements.
104
SCHEDULES 1.1A
COMMITMENTS: LENDING OFFICES AND ADDRESSES
Revolving Term
Name of Lender and Credit Loan
Information for Notices Commitments Commitments
------------------------- ----------- ------------
105
SCHEDULE 1.1B
MORTGAGED PROPERTY
106
SCHEDULE 4.1
CERTAIN DISPOSITIONS AND OTHER TRANSACTIONS
107
SCHEDULE 4.4
CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES
108
SCHEDULE 4.15
SUBSIDIARIES
109
SCHEDULE 4.19(a)
UCC FILING JURISDICTIONS
110
SCHEDULE 4.19(b)
MORTGAGE FILING JURISDICTIONS
111
SCHEDULE 7.2(d)
EXISTING INDEBTEDNESS
112
SCHEDULE 7.3(f)
EXISTING LIENS
113
SCHEDULE 7.8
EXISTING INVESTMENTS
EXHIBIT A TO
CREDIT AGREEMENT
----------------
[FORM OF GUARANTEE AND
COLLATERAL AGREEMENT]
================================================================================
GUARANTEE AND COLLATERAL AGREEMENT
made by
ALLIANCE LAUNDRY HOLDINGS LLC
ALLIANCE LAUNDRY SYSTEMS LLC
and certain of their Subsidiaries
in favor of
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
Dated as of May 5, 1998
================================================================================
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINED TERMS.......................................................... 1
1.1 Definitions......................................................... 1
1.2 Other Definitional Provisions....................................... 5
SECTION 2. GUARANTEE.............................................................. 6
2.1 Guarantee........................................................... 6
2.2 Right of Contribution............................................... 7
2.3 No Subrogation...................................................... 7
2.4 Amendments, etc. with respect to the Borrower Obligations........... 7
2.5 Guarantee Absolute and Unconditional................................ 8
2.6 Reinstatement....................................................... 9
2.7 Payments............................................................ 9
SECTION 3. GRANT OF SECURITY INTEREST............................................. 9
SECTION 4. REPRESENTATIONS AND WARRANTIES......................................... 10
4.1 Representations in Credit Agreement................................. 10
4.2 No Other Liens...................................................... 10
4.3 Perfected First Priority Liens...................................... 10
4.4 Chief Executive Office.............................................. 10
4.5 Inventory and Equipment............................................. 11
4.6 Farm Products....................................................... 11
4.7 Investment Property................................................. 11
4.8 Receivables......................................................... 11
4.9 Contracts........................................................... 11
4.10 Intellectual Property............................................... 12
4.11 Commercial Tort Claims.............................................. 13
SECTION 5. COVENANTS.............................................................. 13
5.1 Covenants in Credit Agreement....................................... 13
5.2 Delivery of Instruments, Certified Securities and Chattel Paper..... 13
5.3 Maintenance of Insurance............................................ 13
5.4 Payment of Obligations.............................................. 14
5.5 Maintenance of Perfected Security Interest; Further Documentation... 14
5.6 Changes in Locations, Name, etc..................................... 14
5.7 Notices............................................................. 15
5.8 Investment Property................................................. 15
5.9 Receivables......................................................... 16
5.10 Intellectual Property............................................... 17
SECTION 6. REMEDIAL PROVISIONS.................................................... 18
6.1 Certain Matters Relating to Receivables............................. 18
6.2 Communications with Obligors; Grantors Remain Liable................ 19
i
Page
----
6.3 Pledged Stock....................................................... 19
6.4 Proceeds to be Turned Over To Administrative Agent.................. 20
6.5 Application of Proceeds............................................. 20
6.6 Code and Other Remedies............................................. 21
6.7 Registration Rights................................................. 22
6.8 Waiver; Deficiency.................................................. 23
SECTION 7. THE ADMINISTRATIVE AGENT............................................... 23
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc......... 23
7.2 Duty of Administrative Agent........................................ 24
7.3 Execution of Financing Statements................................... 25
7.4 Authority of Administrative Agent................................... 25
SECTION 8. MISCELLANEOUS.......................................................... 25
8.1 Amendments in Writing............................................... 25
8.2 Notices............................................................. 25
8.3 No Waiver by Course of Conduct; Cumulative Remedies................. 26
8.4 Enforcement Expenses; Indemnification............................... 26
8.5 Successors and Assigns.............................................. 26
8.6 Set-Off............................................................. 26
8.7 Counterparts........................................................ 27
8.8 Severability........................................................ 27
8.9 Section Headings.................................................... 27
8.10 Integration......................................................... 27
8.11 GOVERNING LAW....................................................... 27
8.12 Submission To Jurisdiction; Waivers................................. 27
8.13 Acknowledgements.................................................... 28
8.14 Additional Grantors................................................. 28
8.15 Releases............................................................ 28
8.16 WAIVER OF JURY TRIAL................................................ 29
SCHEDULES
---------
Schedule 1 Notice Addresses
Schedule 2 Investment Property
Schedule 3 Perfection Matters
Schedule 4 Jurisdictions of Organization and Chief Executive Offices
Schedule 5 Inventory and Equipment Locations
Schedule 6 Intellectual Property
Schedule 7 Contracts
Schedule 8 Government Contracts
Schedule 9 Commercial Tort Claims
ii
GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 5, 1998, made by
each of the signatories hereto (together with any other entity that may become a
party hereto as provided herein, the "Grantors"), in favor of General Electric
--------
Capital Corporation, as Administrative Agent (in such capacity, the
"Administrative Agent") for the banks and other financial institutions (the
---------------------
"Lenders") from time to time parties to the Credit Agreement, dated as of May 5,
--------
1998 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Alliance Laundry Holdings LLC ("Holdings"), Alliance
----------------- --------
Laundry Systems LLC (the "Borrower"), the Lenders, Xxxxxx Brothers, Inc., as
--------
Arranger, Xxxxxx Commercial Paper Inc., as Syndication Agent, and the
Administrative Agent.
W I T N E S S E T H:
-------------------
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make extensions of credit to the Borrower upon the terms and subject
to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrower to make valuable transfers
to one or more of the other Grantors in connection with the operation of their
respective businesses;
WHEREAS, the Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Borrower under the Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Administrative Agent for the benefit of the Lenders and the Agents;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined
-----------
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms are used herein as defined in the
New York UCC: Account, Certificated Security, Chattel Paper, Document,
Equipment, Farm Products, Instrument, Inventory and Investment Property.
(b) The following terms shall have the following meanings:
2
"Agreement": this Guarantee and Collateral Agreement, as the same may
---------
be amended, supplemented or otherwise modified from time to time.
"Borrower Obligations": the collective reference to the unpaid
--------------------
principal of and interest on the Loans and Reimbursement Obligations and
all other obligations and liabilities of the Borrower (including, without
limitation, interest accruing at the then applicable rate provided in the
Credit Agreement after the maturity of the Loans and Reimbursement
Obligations and interest accruing at the then applicable rate provided in
the Credit Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or post-
petition interest is allowed in such proceeding) to the Administrative
Agent or any Lender (or, in the case of any Hedge Agreement referred to
below, any Affiliate of any Lender), whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit Agreement,
this Agreement, the other Loan Documents, any Letter of Credit or any Hedge
Agreement entered into by the Borrower with any Lender (or any Affiliate of
any Lender) or any other document made, delivered or given by any Loan
Party in connection therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Lenders that
are required to be paid by the Borrower pursuant to the terms of any of the
foregoing agreements).
"Collateral": as defined in Section 3.
----------
"Collateral Account": any collateral account established by the
------------------
Administrative Agent as provided in Section 6.1 or 6.4.
"Commercial Tort Claim": as defined in the Uniform Commercial Code of
---------------------
any applicable jurisdiction and, in any event, including, without
limitation, any claim arising in tort if the claim is generally assignable
under applicable law and (a) the claimant is an organization or (b) the
claimant is an individual, the claim does not include damages arising out
of bodily injury to or the death of an individual and the claim arose in
the course of the claimant's business or profession. It is understood that
no Grantor shall be required to perfect a security interest in any
Commercial Tort Claim owned by it except to the extent such security
interest may be perfected by filing a financing statement under the Uniform
Commercial Code as in effect in the applicable jurisdiction.
"Contracts": the contracts and agreements listed in Schedule 7, as
--------- ----------
the same may be amended, supplemented or otherwise modified from time to
time, including, without limitation, (i) all rights of any Grantor to
receive moneys due and to become due to it thereunder or in connection
therewith, (ii) all rights of any Grantor to damages arising thereunder and
(iii) all rights of any Grantor to perform and to exercise all remedies
thereunder.
"Copyrights": (i) all copyrights arising under the laws of the United
----------
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in Schedule 6), all registrations and
----------
recordings thereof, and all applications in connection therewith,
3
including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to
obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor as
------------------
licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
----------
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
"Deposit Account": as defined in the Uniform Commercial Code of any
---------------
applicable jurisdiction and, in any event, including, without limitation,
any demand, time, savings, passbook or like account maintained with a
depositary institution.
"Foreign Subsidiary": any Subsidiary organized under the laws of any
------------------
jurisdiction outside the United States of America.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of any
-------------------------------
Foreign Subsidiary.
"General Intangibles": all "general intangibles" as such term is
-------------------
defined in Section 9-106 of the New York UCC and, in any event, including,
without limitation, with respect to any Grantor, all contracts, leases,
licenses, agreements, instruments and indentures in any form, and portions
thereof, to which such Grantor is a party or under which such Grantor has
any right, title or interest or to which such Grantor or any property of
such Grantor is subject, as the same may from time to time be amended,
supplemented or otherwise modified, including, without limitation, (i) all
rights of such Grantor to receive moneys due and to become due to it
thereunder or in connection therewith, (ii) all rights of such Grantor to
damages arising thereunder and (iii) all rights of such Grantor to perform
and to exercise all remedies thereunder, in each case to the extent the
grant by such Grantor of a security interest pursuant to this Agreement in
its right, title and interest in such contract, agreement, instrument or
indenture is not prohibited by such contract, lease, license, agreement,
instrument or indenture without the consent of any other party thereto,
would not give any other party to such contract, lease, license, agreement,
instrument or indenture the right to terminate its obligations thereunder,
or is permitted with consent if all necessary consents to such grant of a
security interest have been obtained from the other parties thereto (it
being understood that the foregoing shall not be deemed to obligate such
Grantor to obtain such consents) or is not prohibited by law; provided,
--------
that the foregoing limitation shall not affect, limit, restrict or impair
the grant by such Grantor of a security interest pursuant to this Agreement
in any Receivable or any money or other amounts due or to become due under
any such contract, agreement, instrument or indenture to the extent
permitted by applicable law.
"Guarantor Obligations": with respect to any Guarantor, all
---------------------
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2)
or any other Loan Document to which such Guarantor is a party, in each case
whether on account of guarantee obligations, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative
Agent or to
4
the Lenders that are required to be paid by such Guarantor pursuant to the
terms of this Agreement or any other Loan Document).
"Guarantors": the collective reference to each Grantor other than the
----------
Borrower.
"Hedge Agreements": as to any Person, all interest rate swaps, caps
----------------
or collar agreements or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates or currency
exchange rates or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"Intellectual Property": the collective reference to all rights,
---------------------
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks and the Trademark Licenses,
and all rights to xxx at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom.
"Intercompany Note": any promissory note evidencing loans made by any
-----------------
Grantor to Holdings or any of its Subsidiaries.
"Investment Property": the collective reference to (a) all
-------------------
"investment property" as such term is defined in Section 9-115 of the New
York UCC in effect on the date hereof or at any time hereafter (other than
any Foreign Subsidiary Voting Stock excluded from the definition of
"Pledged Stock") and (b) whether or not constituting "investment property"
as so defined, all Pledged Notes and all Pledged Stock.
"Issuers": the collective reference to each issuer of any Investment
-------
Property pledged hereunder.
"New York UCC": the Uniform Commercial Code as from time to time in
------------
effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
-----------
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patents": (i) all letters patent of the United States, any other
-------
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without
limitation, any of the foregoing referred to in Schedule 6, (ii) all
----------
applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof,
including, without limitation, any of the foregoing referred to in Schedule
--------
6, and (iii) all rights to obtain any reissues or extensions of the
-
foregoing.
"Patent License": all agreements, whether written or oral, providing
--------------
for the grant by or to any Grantor of any right to manufacture, use or sell
any invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 6.
----------
5
"Pledged Notes": all promissory notes listed on Schedule 2, all
------------- ----------
Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (including promissory
notes issued in connection with loans or advances made by any Grantor to
its customers but excluding promissory notes issued in connection with
extensions of trade credit by any Grantor in the ordinary course of
business).
"Pledged Stock": the shares of Capital Stock listed on Schedule 2,
------------- ----------
together with any other shares, stock certificates, options or rights of
any nature whatsoever in respect of the Capital Stock of any Person that
may be issued or granted to, or held by, any Grantor while this Agreement
is in effect; provided that in no event shall more than 65% of the total
outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be
required to be pledged hereunder.
"Proceeds": all "proceeds" as such term is defined in Section 9-
--------
306(1) of the New York UCC and, in any event, shall include, without
limitation, all dividends and other income from the Investment Property,
collections thereon and distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or for
----------
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account), to the extent such right is
owned by such Grantor. A Receivable shall not be considered to be owned by
a Grantor if it has been transferred by such Grantor in a transaction which
is intended to constitute a sale or which results in derecognition of such
Receivable from the financial statements of such Grantor.
"Securities Act": the Securities Act of 1933, as amended.
--------------
"Trademarks": (i) all trademarks, trade names, corporate names,
----------
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in Schedule 6, and (ii) the
----------
right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
-----------------
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred to
in Schedule 6.
----------
1.2 Other Definitional Provisions. (a) The words "hereof,"
-----------------------------
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
6
(c) Where the context requires herein, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
(d) Where the context requires, any Hedge Agreement entered into by
any Grantor with any Lender or any Affiliate of any Lender shall, for purposes
of this Agreement, be a "Loan Document" and any such Affiliate of a Lender
-------------
shall, for purposes of this Agreement, be a "Lender" for purposes of this
------
Agreement.
(e) The Agents and the Arranger are collectively referred to herein
as the "Agents".
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
---------
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Agents and the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Administrative Agent, any other Agent
or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall have been terminated, notwithstanding that from time to time
during the term of the Credit Agreement the Borrower may be free from any
Borrower Obligations.
(e) No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by any Agent or any
Lender from the Borrower, any of the Guarantors, any other guarantor or any
other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Borrower Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment (other than any payment made in respect
of the Borrower Obligations or any payment received or collected in respect of
the Borrower Obligations), remain liable for the Borrower Obligations up to the
maximum liability of such Guarantor hereunder until the
7
Borrower Obligations are paid in full, no Letter of Credit shall be outstanding
and the Commitments are terminated.
2.2 Right of Contribution. Each Subsidiary Guarantor hereby agrees
---------------------
that to the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment. Each Subsidiary Guarantor's right of contribution shall be
subject to the terms and conditions of Section 2.3. The provisions of this
Section 2.2 shall in no respect limit the obligations and liabilities of any
Subsidiary Guarantor to the Agents and the Lenders, and each Subsidiary
Guarantor shall remain liable to the Agents and the Lenders for the full amount
guaranteed by such Subsidiary Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
--------------
Guarantor hereunder or any set-off or application of funds of any Guarantor by
any Agent or any Lender, no Guarantor shall be entitled to be subrogated to any
of the rights of any Agent or any Lender against the Borrower or any other
Guarantor or any collateral security or guarantee or right of offset held by any
Agent or any Lender for the payment of the Borrower Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from the
Borrower or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Agents and the Lenders by the Borrower
on account of the Borrower Obligations are paid in full, no Letter of Credit
shall be outstanding and the Commitments are terminated. If any amount shall be
paid to any Guarantor on account of such subrogation rights at any time when the
Commitments shall not have terminated, any Letter of Credit shall be outstanding
or any amounts owing in respect of the Borrower Obligations shall not have been
paid in full, such amount shall be held by such Guarantor in trust for the
Agents and the Lenders, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the
Administrative Agent in the exact form received by such Guarantor (duly indorsed
by such Guarantor to the Administrative Agent, if required), to be applied
against the Borrower Obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations. Each
---------------------------------------------------------
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by any Agent or any Lender may be rescinded by such Agent or
such Lender and any of the Borrower Obligations continued, and the Borrower
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
any Agent or any Lender, and the Credit Agreement and the other Loan Documents
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the requisite Lenders, as the case may be) may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by any Agent or any Lender for the payment of the
Borrower Obligations may be sold, exchanged, waived, surrendered or released.
No Agent or Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Borrower Obligations
or for the guarantee contained in this Section 2 or any property subject
thereto.
8
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any
------------------------------------
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by any Agent or any
Lender upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Agents and the Lenders, on the other
hand, likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the Guarantors with respect to the
Borrower Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
any Agent or any Lender, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by the Borrower or any other Person against any Agent or any Lender, or
(c) any other circumstance whatsoever (with or without notice to or knowledge of
the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower from the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, any
Agent or any Lender may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
the Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by any Agent or any Lender to make any such
demand, to pursue such other rights or remedies or to collect any payments from
the Borrower, any other Guarantor or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of the Borrower, any other Guarantor or any other Person or any
such collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of any Agent or any Lender against any Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
-------------
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by any Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
--------
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent located at the
Payment Office specified in the Credit Agreement.
9
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers as collateral security to
the Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Agents and the Lenders, a security interest in, all of
the following property now owned or at any time hereafter acquired by such
Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the "Collateral"), as
----------
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of such Grantor's
Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Commercial Tort Claims;
(d) all Contracts;
(e) all Deposit Accounts;
(f) all Documents;
(g) all Equipment;
(h) all General Intangibles;
(i) all Instruments;
(j) all Intellectual Property;
(k) all Inventory;
(l) all Investment Property;
(m) all books and records pertaining to the Collateral; and
(n) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing;
provided that no Lien shall be granted in any Property upon which a Lien is not
--------
required to be granted pursuant to Section 6.10 of the Credit Agreement.
10
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to each Agent and each Lender that:
4.1 Representations in Credit Agreement . In the case of each
------------------------------------
Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which representations and warranties is
hereby incorporated herein by reference, are true and correct, and each Agent
and each Lender shall be entitled to rely on each of them as if they were fully
set forth herein, provided that each reference in each such representation and
--------
warranty to the Borrower's knowledge shall, for the purposes of this Section
4.1, be deemed to be a reference to such Guarantor's knowledge.
4.2 No Other Liens. Except for the security interest granted to the
--------------
Administrative Agent for the ratable benefit of the Agents and the Lenders
pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement, all of such Grantor's Collateral is free and
clear of any and all Liens or claims of others.
4.3 Perfected First Priority Liens. The security interests granted
------------------------------
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
----------
referred to on said Schedule, have been delivered to the Administrative Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the U.C.C. Filing Collateral in favor of the Administrative
Agent, for the ratable benefit of the Agents and the Lenders, as collateral
security for such Grantor's Obligations, enforceable in accordance with the
terms hereof against all creditors of such Grantor and any Persons purporting to
purchase any such Collateral from such Grantor and (b) are prior to all other
Liens on such Collateral other than Liens permitted under Section 7.3 of the
Credit Agreement (except Section 7.3(j)).
4.4 Chief Executive Office. On the date hereof, such Grantor's
----------------------
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 4.
----------
4.5 Inventory and Equipment. On the date hereof, such Grantor's
-----------------------
Inventory and Equipment (other than motor vehicles and mobile goods) are kept at
the locations listed on Schedule 5.
----------
4.6 Farm Products. None of the Collateral constitutes, or is the
-------------
Proceeds of, Farm Products.
4.7 Investment Property. (a) The shares of Pledged Stock pledged
-------------------
by such Grantor hereunder constitute all the issued and outstanding shares of
all classes of the Capital Stock of each Issuer (other than Alliance Commercial
Appliances Receivables LLC and Alliance Commercial Appliances Finance LLC) owned
by such Grantor or, in the case of Foreign Subsidiary Voting Stock, if less, 65%
of the outstanding Foreign Subsidiary Voting Stock of each relevant Issuer.
11
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) To the best of such Grantor's knowledge, each of the Pledged
Notes constitutes the legal, valid and binding obligation of the obligor with
respect thereto, enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Investment Property pledged by it hereunder, free
of any and all Liens or options in favor of, or claims of, any other Person,
except the security interest created by this Agreement and other Liens permitted
under Section 7.3 of the Credit Agreement (except Section 7.3(j)).
4.8 Receivables. (a) No amount payable to such Grantor under or in
-----------
connection with any Receivable is evidenced by any Instrument or Chattel Paper
(to the extent the aggregate amount of such Instruments and Chattel Paper
exceeds $100,000) which has not been delivered to the Administrative Agent,
except for Receivables which such Grantor expects to transfer within 90 days of
the date of the origination of such Receivables pursuant to a Permitted
Receivables Financing.
(b) Except as set forth on Schedule 8, as of the date hereof, none of
----------
the obligors on any Receivables is a Governmental Authority.
(c) The amounts represented by such Grantor to the Agents the Lenders
from time to time as owing to such Grantor in respect of the Receivables will at
such times be accurate in all material respects.
4.9 Contracts. (a) No consent of any party (other than such
---------
Grantor) to any Contract is required, or purports to be required, in connection
with the execution, delivery and performance of this Agreement.
(b) Each Contract is in full force and effect and constitutes a valid
and legally enforceable obligation of the Grantors party thereto, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(c) No material consent or material authorization of, filing with, or
other act by or in respect of, any Governmental Authority is required in
connection with the execution, delivery, performance, validity or enforceability
of any of the Contracts by any Grantor party thereto other than those which have
been duly obtained, made or performed, are in full force and effect and do not
subject the scope of any such Contract to any material adverse limitation,
either specific or general in nature.
(d) As of the Closing Date, neither such Grantor nor (to the best of
such Grantor's knowledge) any of the other parties to the Contracts is in
default in the performance or
12
observance of any of the terms thereof in any manner that, in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(e) The right, title and interest of such Grantor in, to and under
the Contracts are not subject to any defenses, offsets, counterclaims or claims
that, in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(f) As of the date hereof, such Grantor has delivered to the
Administrative Agent a complete and correct copy of each Contract, including all
amendments, supplements and other modifications thereto.
(g) No amount payable to such Grantor under or in connection with any
Contract is evidenced by any Instrument or Chattel Paper (to the extent the
aggregate amount of such Instruments and Chattel Paper exceeds $100,000) which
has not been delivered to the Administrative Agent.
(h) None of the parties to any Contract is a Governmental Authority.
4.10 Intellectual Property. (a) Schedule 6 lists all registered
--------------------- ----------
Intellectual Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual Property owned by
such Grantor is valid, subsisting, unexpired and enforceable, has not been
abandoned and, to such Grantor's knowledge, does not infringe the intellectual
property rights of any other Person.
(c) Except as set forth in Schedule 6, on the date hereof, none of
----------
the material Intellectual Property used by such Grantor in its business is the
subject of any licensing or franchise agreement pursuant to which such Grantor
is the licensor or franchisor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would directly limit, cancel or question the
validity of, or such Grantor's rights in, any Intellectual Property in any
respect that could reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual Property owned by such Grantor or such
Grantor's ownership interest therein, and (ii) which, if adversely determined,
would have a material adverse effect on the value of any Intellectual Property
owned by such Grantor.
4.11 Commercial Tort Claims. Schedule 9 is a complete and correct
---------------------- ----------
description of all Commercial Tort Claims owned by such Grantor on the date
hereof.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Agents and the Lenders
that, from and after the date of this Agreement until the Obligations shall have
been paid in full, no Letter of Credit shall be outstanding and the Commitments
shall have terminated:
13
5.1 Covenants in Credit Agreement. In the case of each Guarantor,
-----------------------------
such Guarantor shall take, or shall refrain from taking, as the case may be,
each action that is necessary to be taken or not taken, as the case may be, so
that no Default or Event of Default is caused by the failure to take such action
or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 Delivery of Instruments, Certified Securities and Chattel Paper.
---------------------------------------------------------------
Except as provided in Section 4.8, if any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any Instrument,
Certificated Security or Chattel Paper (to the extent that the aggregate amount
of such Chattel Paper exceeds $100,000), such Instrument, Certificated Security
or Chattel Paper shall be immediately delivered to the Administrative Agent,
duly indorsed in a manner satisfactory to the Administrative Agent, to be held
as Collateral pursuant to this Agreement.
5.3 Maintenance of Insurance. (a) Such Grantor will maintain, with
------------------------
financially sound and reputable companies, insurance policies (i) insuring the
Inventory and Equipment against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Administrative Agent and
(ii) to the extent requested by the Administrative Agent, insuring such Grantor,
the Agents and the Lenders against liability for personal injury and property
damage relating to such Inventory and Equipment, such policies to be in such
form and amounts and having such coverage as may be reasonably satisfactory to
the Administrative Agent.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Administrative Agent of
written notice thereof, (ii) name the Administrative Agent as insured party or
loss payee, (iii) if reasonably requested by the Administrative Agent, include a
breach of warranty clause and (iv) be reasonably satisfactory in all other
respects to the Administrative Agent.
(c) The Borrower shall deliver to the Administrative Agent and the
Lenders a report of a reputable insurance broker with respect to such insurance
as the Administrative Agent may from time to time reasonably request.
5.4 Payment of Obligations. Such Grantor will pay and discharge or
----------------------
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral, as well as all claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with respect to
the Collateral, except (a) that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor or (b) where the failure to pay, discharge
or otherwise satisfy such obligations could not, individually or in the
aggregate, reasonably be expected to result in the sale, forfeiture or loss of
any material portion of the Collateral or any interest therein, other than as a
result of a Lien permitted under Section 7.3 of the Credit Agreement.
5.5 Maintenance of Perfected Security Interest; Further
---------------------------------------------------
Documentation. (a) Such Grantor shall maintain the security interest created
by this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
14
(b) Such Grantor will furnish to the Administrative Agent and the
Lenders from time to time statements and schedules further identifying and
describing the assets and property of such Grantor and such other reports in
connection therewith as the Administrative Agent may reasonably request, all in
reasonable detail.
(c) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of such Grantor, such Grantor
will promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property, Deposit Accounts and any other relevant
Collateral, taking any actions necessary to enable the Administrative Agent to
obtain "control" (within the meaning of the applicable Uniform Commercial Code)
with respect thereto, provided that no such action shall be required with
--------
respect to Deposit Accounts unless an Event of Default shall have occurred and
be continuing.
5.6 Changes in Locations, Name, etc. Such Grantor will not, except
--------------------------------
upon 15 days' prior written notice to the Administrative Agent and delivery to
the Administrative Agent of (a) all additional executed financing statements and
other documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein
and (b) if applicable, a written supplement to Schedule 5 or Schedule 4, as the
----------
case may be, showing any additional location at which Inventory or Equipment
shall be kept or any change in its jurisdiction of organization or the location
of its chief executive office or sole place of business:
(i) permit any of the Inventory or Equipment to be kept at a location
other than those listed on Schedule 5 and other than temporary transfers
----------
(for a period not to exceed three months in any event) of Equipment from
any location set forth in Schedule 5 to another location if done for the
----------
limited purpose of repairing, refurbishing, or overhauling such Equipment
in the ordinary course of business;
(ii) change its jurisdiction of organization or the location of its
chief executive office or sole place of business from that referred to in
Section 4.4; or
(iii) change its name, identity or organizational structure to such an
extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become misleading.
5.7 Notices. Such Grantor will advise the Administrative Agent and
-------
the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Administrative Agent to exercise any of its
remedies hereunder; and
15
(b) the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5.8 Investment Property. (a) If such Grantor shall become entitled
-------------------
to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Agents and the Lenders, hold the same in trust for the
Agents and the Lenders and deliver the same forthwith to the Administrative
Agent in the exact form received, duly indorsed by such Grantor to the
Administrative Agent, if required, together with an undated stock power covering
such certificate duly executed in blank by such Grantor and with, if the
Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Any sums paid upon or in respect of the
Investment Property upon the liquidation or dissolution of any Issuer (other
than a liquidation or dissolution permitted under the Credit Agreement) shall be
paid over to the Administrative Agent to be held by it hereunder as additional
collateral security for the Obligations, and in case any distribution of capital
shall be made on or in respect of the Investment Property or any property shall
be distributed upon or with respect to the Investment Property, in either case,
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected security interest in favor of the
Administrative Agent, be delivered to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations. If any sums of
money or property so paid or distributed in respect of the Investment Property
shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Administrative Agent, hold such money or
property in trust for the Agents and the Lenders, segregated from other funds of
such Grantor, as additional collateral security for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
such Grantor will not (i) vote to enable, or take any other action to permit,
any Issuer to issue any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer
unless such stock or other securities are subject to a perfected security
interest hereunder, (ii) sell, assign, transfer, exchange, or otherwise dispose
of, or grant any option with respect to, the Investment Property or the Proceeds
thereof (except pursuant to a transaction expressly permitted by the Credit
Agreement), (iii) create, incur or permit to exist any Lien or option in favor
of, or any claim of any Person with respect to, any of the Investment Property
or the Proceeds thereof, or any interest therein, except for the security
interests created by this Agreement or as otherwise permitted under Section 7.3
of the Credit Agreement or (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Administrative Agent to
sell, assign or transfer any of the Investment Property or the Proceeds thereof,
other than the Senior Subordinated Note Indenture (or any other indenture
governing Indebtedness permitted under Section 7.2(f) of the Credit Agreement)
or any agreement entered into in connection with a sale of the Capital Stock of
any Subsidiary permitted under the Credit Agreement.
16
(c) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to the
Investment Property issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Investment Property issued by it, (iii) the terms of
Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all
------- --------
actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Investment Property issued by it and (iv) it will comply with
instructions originated by the Administrative Agent with respect to Investment
Property issued by it without any further consent of the owner thereof.
(d) No Grantor shall permit any other Person (other than the
Administrative Agent) to exercise or obtain "control" (within the meaning of
Section 8-106 of the New York UCC in effect on the date hereof or at any time
hereafter) in connection with any Lien of any of its Investment Property
(including Cash Equivalents) in connection with the grant of a Lien by such
Grantor to or for the benefit of such Person or any other Person (other than the
Administrative Agent) except as otherwise permitted under Section 7.3 of the
Credit Agreement.
5.9 Receivables. (a) Other than in the ordinary course of business
-----------
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any material Receivable, (ii) compromise or settle any
material Receivable for a materially lesser amount thereof, (iii) release,
wholly or partially in any material respect, any Person liable for the payment
of any material Receivable, (iv) allow any material credit or discount
whatsoever on any material Receivable or (v) amend, supplement or modify any
material Receivable in any manner that could materially adversely affect the
value thereof.
(b) Such Grantor will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it that questions or calls
into doubt the validity or enforceability of more than 5% of the aggregate
amount of the then outstanding Receivables.
5.10 Intellectual Property. (a) Such Grantor (either itself or
---------------------
through licensees) will (i) subject to such Grantor's reasonable business
judgment, continue to use each material Trademark on each and every trademark
class of goods applicable to its current line as reflected in its current
catalogs, brochures and price lists in order to maintain such Trademark in full
force free from any claim of abandonment for non-use, (ii) subject to such
Grantor's reasonable business judgment, maintain as in the past the quality of
products and services offered under such Trademark, (iii) use such Trademark
with the appropriate notice of registration and all other notices and legends
required by applicable Requirements of Law, (iv) not adopt or use any xxxx which
is confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent, for the ratable benefit of the Agents and the Lenders,
shall obtain a perfected security interest in such xxxx pursuant to this
Agreement, and (v) subject to such Grantor's reasonable business judgment, not
(and not permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby such Trademark may become invalidated or impaired in
any way.
(b) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any material Patent may become forfeited,
abandoned or dedicated to the public.
17
(c) Subject to such Grantor's reasonable business judgment, such
Grantor (either itself or through licensees) (i) will employ each material
Copyright and (ii) will not (and will not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby any material
portion of the Copyrights may become invalidated or otherwise impaired. Subject
to such Grantor's reasonable business judgment, such Grantor will not (either
itself or through licensees) do any act whereby any material portion of the
Copyrights may fall into the public domain.
(d) Such Grantor (either itself or through licensees) will not do any
act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Grantor will notify the Administrative Agent and the Lenders
promptly if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country) regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent within ten Business Days after the last day
of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have recorded,
any and all agreements, instruments, documents, and papers as the Administrative
Agent may request to evidence the Administrative Agent's and the Lenders'
security interest in any Copyright, Patent or Trademark and the goodwill and
General Intangibles of such Grantor relating thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and in its reasonable business
judgment xxx for infringement, misappropriation or dilution, to seek injunctive
relief where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution.
18
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) After the
---------------------------------------
occurrence and during the continuation of any Event of Default, the
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test verifications.
At any time and from time to time, upon the Administrative Agent's request and
at the expense of the relevant Grantor, such Grantor shall cause independent
public accountants or others satisfactory to the Administrative Agent to furnish
to the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, and the Administrative Agent may curtail or
terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Administrative Agent at
any time after the occurrence and during the continuance of an Event of Default,
any payments of Receivables, when collected by any Grantor, (i) shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Administrative Agent if required, in a Collateral Account maintained under the
sole dominion and control of the Administrative Agent, subject to withdrawal by
the Administrative Agent for the account of the Agents and the Lenders only as
provided in Section 6.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Agents and the Lenders, segregated from other funds of
such Grantor. Each such deposit of Proceeds of Receivables shall be accompanied
by a report identifying in reasonable detail the nature and source of the
payments included in the deposit.
(c) At the Administrative Agent's request, each Grantor shall deliver
to the Administrative Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Receivables,
including, without limitation, all original orders, invoices and shipping
receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
----------------------------------------------------
Administrative Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent's satisfaction the existence, amount and terms of any
Receivables.
(b) Upon the request of the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, each Grantor
shall notify obligors on the Receivables that the Receivables have been assigned
to the Administrative Agent for the ratable benefit of the Agents and the
Lenders and that payments in respect thereof shall be made directly to the
Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither any
Agent nor any Lender shall have any obligation or liability under any Receivable
(or any agreement giving rise thereto) by reason of or arising out of this
Agreement or the receipt by any Agent or any Lender of any payment relating
thereto, nor shall
19
any Agent or any Lender be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Receivable (or any agreement
giving rise thereto) to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, or to take
any action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time or
times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
-------------
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends and distributions paid in respect of the Pledged
Stock and other Investment Property and all payments made in respect of the
Pledged Notes, in each case paid in the normal course of business of the
relevant Issuer and consistent with past practice, to the extent permitted in
the Credit Agreement, and to exercise all voting and corporate rights with
respect to the Investment Property; provided, however, that no vote shall be
-------- -------
cast or corporate right exercised or other action taken which, in the
Administrative Agent's reasonable judgment, would impair the Collateral or which
would be inconsistent with or result in any violation of any provision of the
Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Investment Property and make application thereof to the
Obligations in the order set forth in Section 6.5 and (ii) any or all of the
Investment Property shall be registered in the name of the Administrative Agent
or its nominee, and the Administrative Agent or its nominee may thereafter
exercise (x) all voting, corporate and other rights pertaining to such
Investment Property at any meeting of shareholders, partners or members of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Investment Property as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the
organizational structure of any Issuer, or upon the exercise by any Grantor or
the Administrative Agent of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any
20
dividends or other payments with respect to the Investment Property directly to
the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent. In addition
--------------------------------------------------
to the rights of the Administrative Agent and the Lenders specified in Section
6.1 with respect to payments of Receivables, if an Event of Default shall occur
and be continuing, all Proceeds received by any Grantor consisting of cash,
checks and other near-cash items shall be held by such Grantor in trust for the
Agents and the Lenders, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Administrative
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Administrative Agent, if required). All Proceeds received by the
Administrative Agent hereunder shall be held by the Administrative Agent in a
Collateral Account maintained under its sole dominion and control. All Proceeds
while held by the Administrative Agent in a Collateral Account (or by such
Grantor in trust for the Administrative Agent and the Lenders) shall continue to
be held as collateral security for all the Obligations and shall not constitute
payment thereof until applied as provided in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be agreed upon
-----------------------
by the Borrower and the Administrative Agent or, if an Event of Default shall
have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral Account, and any
proceeds of the guarantee set forth in Section 2, in payment of the Obligations
in the following order:
First, to pay incurred and unpaid fees and expenses of the
-----
Administrative Agent under the Loan Documents;
Second, to the Administrative Agent, for application by it towards
------
payment of amounts then due and owing and remaining unpaid in respect of
the Obligations, pro rata among the Agents and the Lenders according to the
--- ----
amounts of the Obligations then due and owing and remaining unpaid to the
Agents and the Lenders;
Third, to the Administrative Agent, for application by it towards
-----
prepayment of the Obligations, pro rata among the Agents and Lenders
--- ----
according to the amounts of the Obligations then held by the Agents and the
Lenders; and
Fourth, any balance of such Proceeds remaining after the then
------
outstanding Obligations shall have been paid in full, no Letters of Credit
shall be outstanding and the Commitments shall have terminated shall be
paid over to the Borrower or to whomsoever may be lawfully entitled to
receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur and
-----------------------
be continuing, the Administrative Agent, on behalf of the Agents and the
Lenders, may exercise, in addition to all other rights and remedies granted to
them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the New York UCC or any other applicable law. Without limiting the
generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all
21
and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. Any Agent or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in any Grantor, which right
or equity is hereby waived and released. Each Grantor further agrees, at the
Administrative Agent's request, to assemble the Collateral and make it available
to the Administrative Agent at places which the Administrative Agent shall
reasonably select, whether at such Grantor's premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Agents and the Lenders hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Administrative Agent
may elect, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the New York UCC, need the
Administrative Agent account for the surplus, if any, to any Grantor. To the
extent permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against any Agent or any Lender arising out of the
exercise by it of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition.
6.7 Registration Rights. (a) If the Administrative Agent shall
-------------------
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 6.6, and if in the opinion of the Administrative Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the Administrative Agent shall designate
and to make available to its security holders, as soon as practicable, an
earnings statement (which need not be audited) which will satisfy the provisions
of Section 11(a) of the Securities Act.
22
(b) Each Grantor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Agents and the Lenders,
that the Agents and the Lenders have no adequate remedy at law in respect of
such breach and, as a consequence, that each and every covenant contained in
this Section 6.7 shall be specifically enforceable against such Grantor, and
such Grantor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred under the Credit Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and agrees not to assert
------------------
any rights or privileges which it may acquire under Section 9-112 of the New
York UCC. Each Grantor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by any
Agent or any Lender to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a)
-----------------------------------------------------------
Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement in each case after the occurrence and during the continuation of
an Event of Default, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or with respect to any other Collateral and
23
file any claim or take any other action or proceeding in any court of law
or equity or otherwise deemed appropriate by the Administrative Agent for
the purpose of collecting any and all such moneys due under any Receivable
or with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Administrative Agent may request to evidence the
Administrative Agent's security interest in such Intellectual Property and
the goodwill and general intangibles of such Grantor relating thereto or
represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section 6.6
or 6.7, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (2) ask or demand for, collect, and receive payment of
and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (3)
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of any Collateral; (5) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (6) settle, compromise
or adjust any such suit, action or proceeding and, in connection therewith,
give such discharges or releases as the Administrative Agent may deem
appropriate; (7) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such conditions,
and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (8) generally, sell, transfer, pledge and make
any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or from time to
time, all acts and things which the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the Administrative
Agent's security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
24
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due Revolving Credit Loans that are Base Rate Loans
under the Credit Agreement, from the date of payment by the Administrative Agent
to the date reimbursed by the relevant Grantor, shall be payable by such Grantor
to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 Duty of Administrative Agent. The Administrative Agent's sole
----------------------------
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. No Agent or Lender nor
any of their respective officers, directors, employees or agents shall be liable
for failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of any Grantor or any other Person or to take
any other action whatsoever with regard to the Collateral or any part thereof.
The powers conferred on the Agents and the Lenders hereunder are solely to
protect the Agents' and the Lenders' interests in the Collateral and shall not
impose any duty upon any Agent or any Lender to exercise any such powers. The
Agents and the Lenders shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of
their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section 9-402 of
---------------------------------
the New York UCC and any other applicable law, each Grantor authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Administrative
Agent determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction.
7.4 Authority of Administrative Agent. Each Grantor acknowledges
---------------------------------
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the
25
Lenders with full and valid authority so to act or refrain from acting, and no
Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
---------------------
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
-------
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement; provided that any such
--------
notice, request or demand to or upon any Guarantor (other than Holdings) shall
be addressed to such Guarantor at its notice address set forth on Schedule 1.
----------
8.3 No Waiver by Course of Conduct; Cumulative Remedies. No Agent or
---------------------------------------------------
Lender shall by any act (except by a written instrument pursuant to Section
8.1), delay, indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising, on the part of
any Agent or any Lender, any right, power or privilege hereunder shall operate
as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by any Agent or any
Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which any Agent or any Lender would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
-------------------------------------
agrees to pay or reimburse each Lender and each Agent for all its reasonable
costs and expenses incurred in collecting against such Guarantor under the
guarantee contained in Section 2 or otherwise enforcing or preserving any rights
under this Agreement and the other Loan Documents to which such Guarantor is a
party, including, without limitation, the reasonable fees and disbursements of
counsel (including the allocated fees and expenses of in-house counsel) to each
Lender and of counsel to each Agent.
(b) Each Guarantor agrees to pay, and to save the Agents and the
Lenders harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other similar
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Guarantor agrees to pay, and to save the Agents and the
Lenders harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Section 10.5 of the Credit Agreement.
26
(d) The agreements in this Section shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon the
----------------------
successors and assigns of each Grantor and shall inure to the benefit of the
Agents and the Lenders and their successors and assigns; provided that no
--------
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes each Agent
-------
and each Lender at any time and from time to time while an Event of Default
pursuant to Section 8(a) of the Credit Agreement shall have occurred and be
continuing, without notice to such Grantor or any other Grantor, any such notice
being expressly waived by each Grantor, to set-off and appropriate and apply any
and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Agent or such Lender to or for the
credit or the account of such Grantor, or any part thereof in such amounts as
such Agent or such Lender may elect, against and on account of the obligations
and liabilities of such Grantor to such Agent or such Lender hereunder and
claims of every nature and description of such Agent or such Lender against such
Grantor, in any currency, whether arising hereunder, under the Credit Agreement,
any other Loan Document or otherwise, as such Agent or such Lender may elect,
whether or not any Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. Each Agent and each Lender shall notify such Grantor promptly of any
such set-off and the application made by it of the proceeds thereof, provided
--------
that the failure to give such notice shall not affect the validity of such set-
off and application. The rights of the Agents and each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Agents or such Lender may have.
8.7 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement
----------------
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan Documents
-----------
represent the agreement of the Grantors, the Agents and the Lenders with respect
to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by any Agent or any Lender relative
to subject matter hereof and thereof not expressly set forth or referred to
herein or in the other Loan Documents.
27
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
-----------------------------------
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 or at such other address
of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
8.13 Acknowledgements. Each Grantor hereby acknowledges that:
----------------
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) no Agent or Lender has any fiduciary relationship with or duty to
any Grantor arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between the Grantors, on the
one hand, and the Agents and Lenders, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Grantors and the Lenders.
8.14 Additional Grantors. Each Subsidiary of the Borrower that is
-------------------
required to become a party to this Agreement pursuant to Section 6.10 of the
Credit Agreement shall become
28
a Grantor for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.
8.15 Releases. (a) At such time as the Loans, the Reimbursement
--------
Obligations and the other Obligations (other than unasserted contingent
indemnity and other obligations which expressly survive the termination of the
Credit Agreement and are not then due and payable) shall have been paid in full,
the Commitments have been terminated and no Letters of Credit shall be
outstanding which have not been fully cash collateralized in accordance with the
Credit Agreement or otherwise collateralized in a manner satisfactory to the
Issuing Lender in its sole discretion, the Collateral shall be released from the
Liens created hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Administrative Agent and
each Grantor hereunder shall terminate, all without delivery of any instrument
or performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors. At the request and sole expense of any Grantor following
any such termination, the Administrative Agent shall deliver to such Grantor any
Collateral held by the Administrative Agent hereunder, and execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination.
(b) If any of the Collateral (including transfers of Receivables and
related assets in a Permitted Receivables Financing) shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, such Collateral shall be automatically released from the Lien of this
Agreement and the other Loan Documents without further action on the part of any
Grantor, any Agent or the Lenders, and shall cease to constitute Collateral
hereunder, and then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral. At the request and sole expense of the Borrower, a
Subsidiary Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Subsidiary Guarantor shall be sold,
transferred or otherwise disposed of in a transaction permitted by the Credit
Agreement.
8.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
--------------------
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
29
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
and Collateral Agreement to be duly executed and delivered as of the date first
above written.
ALLIANCE LAUNDRY HOLDINGS LLC
By: ________________________________________
Title:
ALLIANCE LAUNDRY SYSTEMS LLC
By: ________________________________________
Title:
ALLIANCE LAUNDRY CORPORATION
By: ________________________________________
Title:
Schedule 1
----------
NOTICE ADDRESSES OF GUARANTORS
Schedule 2
----------
DESCRIPTION OF INVESTMENT PROPERTY
PLEDGED STOCK:
Issuer Class of Stock Stock Certificate No. No. of
--------------------- ------------------ -------------------------- Shares
---------
PLEDGED NOTES:
Issuer Payee Principal Amount
------------------------- ----------------- ------------------------
Schedule 3
----------
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
-------------------------------
[List each office where a financing statement is to be filed]
Patent and Trademark Filings
----------------------------
[List all filings]
Actions with respect to Pledged Stock
-------------------------------------
Other Actions
-------------
[Describe other actions to be taken]
Schedule 4
----------
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Grantor Location
------- --------
Schedule 5
----------
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Locations
------- ---------
Schedule 6
----------
COPYRIGHTS AND COPYRIGHT LICENSES
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
Schedule 7
----------
CONTRACTS
1. Merger Agreement.
2. All Hedge Agreements to which the Grantor is a party.
Schedule 8
----------
GOVERNMENT CONTRACTS
Schedule 9
----------
COMMERCIAL TORT CLAIMS
ACKNOWLEDGEMENT AND CONSENT*
The undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement, dated as of May 5, 1998 (the "Agreement"), made by the
---------
Grantors parties thereto in favor of General Electric Capital Corporation, as
Administrative Agent. The undersigned agrees for the benefit of the Agents and
the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.
2. The undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.8(a) of
the Agreement.
3. The terms of Sections 6.3(a) and 6.7 of the Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
------- --------
pursuant to Section 6.3(a) or 6.7 of the Agreement.
4. The undersigned agrees to comply with instructions originated by the
Administrative Agent with respect to Investment Property issued by it without
further consent of the owner thereof.
[NAME OF ISSUER]
By ___________________________________
Title _________________________________
Address for Notices:
_______________________________________
_______________________________________
Fax: _________________________________
__________________
* This consent is necessary only with respect to any Issuer which is not
also a Grantor.
ANNEX 1 TO
GUARANTEE AND COLLATERAL AGREEMENT
----------------------------------
ASSUMPTION AGREEMENT, dated as of ________________, made by
______________________________, a ______________ (the "Additional Grantor"), in
------------------
favor of General Electric Capital Corporation, as administrative agent (in such
capacity, the "Administrative Agent") for the banks and other financial
--------------------
institutions (the "Lenders") parties to the Credit Agreement referred to below.
-------
All capitalized terms not defined herein shall have the meaning ascribed to them
in such Credit Agreement.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Alliance Laundry Systems LLC (the "Borrower"), Alliance
--------
Laundry Holdings LLC, the Lenders, the Administrative Agent Xxxxxx Brothers
Inc., as Arranger, and Xxxxxx Commercial Paper Inc., as Syndication Agent, have
entered into a Credit Agreement, dated as of May 5, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement");
----------------
WHEREAS, in connection with the Credit Agreement, the Borrower and
certain of its Affiliates (other than the Additional Grantor) have entered into
the Guarantee and Collateral Agreement, dated as of May 5, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Guarantee and
-------------
Collateral Agreement") in favor of the Administrative Agent for the benefit of
--------------------
the Agents (as defined therein) and the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering
----------------------------------
this Assumption Agreement, the Additional Grantor, as provided in Section 8.14
of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral Agreement as a Grantor thereunder with the same force
and effect as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in Schedules ____________**
to the Guarantee and Collateral Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 4 of the Guarantee and Collateral Agreement is true and
correct on and as the date hereof (after giving effect to this Assumption
Agreement) with respect to such Grantor as if made on and as of such date.
_____________________
** Refer to each Schedule which needs to be supplemented.
2
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
-------------
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:_______________________________________________
Name:
Title:
EXHIBIT B TO
CREDIT AGREEMENT
----------------
[FORM OF COMPLIANCE CERTIFICATE]
This Compliance Certificate is delivered to you pursuant to Section
6.2 of the Credit Agreement, dated as of May 5, 1998 (as amended, supplemented
or modified from time to time, the "Credit Agreement"), among Alliance Laundry
----------------
Holdings LLC ("Holdings"), Alliance Laundry Systems LLC (the "Borrower"), the
-------- --------
banks and other financial institutions from time to time party thereto as
lenders (the "Lenders"), Xxxxxx Brothers, Inc., as Arranger, Xxxxxx Commercial
-------
Paper Inc., as Syndication Agent, and General Electric Capital Corporation, as
Administrative Agent for the Lenders (in such capacity, the "Administrative
--------------
Agent"). Terms defined in the Credit Agreement and not otherwise defined herein
-----
are used herein with the meanings so defined.
1. I am the duly elected, qualified and acting [Chief Financial
Officer] [Vice President - Finance] of the Borrower.
2. I have reviewed and are familiar with the contents of this
Certificate.
3. I have reviewed the terms of the Credit Agreement and the Loan
Documents and have made or caused to be made under my supervision, a review in
reasonable detail of the transactions and condition of the Borrower during the
accounting period covered by the financial statements attached hereto as
Attachment 1 (the "Financial Statements"). Such review did not disclose the
------------ --------------------
existence during or at the end of the accounting period covered by the Financial
Statements, and I have no knowledge of the existence, as of the date of this
Certificate, of any condition or event which constitutes a Default or Event of
Default [, except as set forth below].
4. Attached hereto as Attachment 2 are the computations (a) showing
------------
compliance with the covenants set forth in Sections 7.1, 7.2(q), 7.3(s), 7.5(h),
7.6(f), 7.7 and 7.8(i) of the Credit Agreement and (b) required to determine the
Applicable Margin and Commitment Fee Rate.
IN WITNESS WHEREOF, I execute this Certificate this ____ day of
__________, ____.
ALLIANCE LAUNDRY SYSTEMS LLC
By: _____________________________
Title: ________________________
Attachment 2
to Exhibit B
The information described herein is as of ___________________, and pertains
to the period from ________________ ____, to ________________ ____.
[Set forth Calculations]
EXHIBIT C TO
CREDIT AGREEMENT
----------------
[FORM OF CLOSING CERTIFICATE]
CLOSING CERTIFICATE
Pursuant to subsection 5.1(m) of the Credit Agreement, dated as of May
5, 1998 (the "Credit Agreement"; terms defined therein being used herein as
----------------
therein defined), among Alliance Laundry Holdings LLC ("Holdings"), Alliance
--------
Laundry Systems LLC (the "Borrower"), the Lenders parties thereto, Xxxxxx
--------
Brothers, Inc., as Arranger, Xxxxxx Commercial Paper Inc., as Syndication Agent,
and General Electric Capital Corporation, as Administrative Agent, the
undersigned [INSERT TITLE OF OFFICER] of [INSERT NAME OF COMPANY] (the
"Company") hereby certifies as follows:
-------
1. The representations and warranties of the Company set forth in
each of the Loan Documents to which it is a party or which are contained in any
certificate furnished by or on behalf of the Company pursuant to any of the Loan
Documents to which it is a party are true and correct in all material respects
on and as of the date hereof with the same effect as if made on the date hereof,
except for representations and warranties expressly stated to relate to a
specific earlier date, in which case such representations and warranties were
true and correct in all material respects as of such earlier date.
2. ___________________ is the duly elected and qualified Secretary of
the Company and the signature set forth for such officer below is such officer's
true and genuine signature.
3. No Default or Event of Default has occurred and is continuing as
of the date hereof or after giving effect to the Loans to be made on the date
hereof.
The undersigned Secretary of the Company certifies as follows:
4. There are no liquidation or dissolution proceedings pending or to
my knowledge threatened against the Company, nor has any other event occurred
adversely affecting or threatening the continued existence of the Company.
5. The Company is a [corporation duly incorporated] [limited
liability company duly formed], validly existing and in good standing under the
laws of the jurisdiction of its organization.
6. Attached hereto as Annex 1 is a true and complete copy of
-------
resolutions duly adopted by the Board of [Directors] [Managers] of the Company
on _____________, 1998; such resolutions have not in any way been amended,
modified, revoked or rescinded, have been in full force and effect since their
adoption to and including the date hereof and are now in full force and effect
and are the only proceedings of the Company now in force relating to or
affecting the matters referred to therein.
7. Attached hereto as Annex 2 is a true and complete copy of the [By-
-------
Laws] [Amended and Restated Limited Liability Company Agreement] of the Company
as in effect on the date hereof.
2
8. Attached hereto as Annex 3 is a true and complete copy of the
-------
Certificate of [Incorporation] [Formation] of the Company as in effect on the
date hereof, and such certificate has not been amended, repealed, modified or
restated.
9. The following persons are now duly elected and qualified officers
of the Company holding the offices indicated next to their respective names
below, and such officers have held such offices with the Company at all times
since the date indicated next to their respective titles to and including the
date hereof, and the signatures appearing opposite their respective names below
are the true and genuine signatures of such officers, and each of such officers
is duly authorized to execute and deliver on behalf of the Company each of the
Loan Documents to which it is a party and any certificate or other document to
be delivered by the Company pursuant to the Loan Documents to which it is a
party:
Name Office Date Signature
---- ------ ---- ---------
IN WITNESS WHEREOF, the undersigned have hereunto set our names as of
the date set forth below.
__________________________ ____________________________
Name: Name:
Title: Title:
Date: _______________, 1998
EXHIBIT E TO
CREDIT AGREEMENT
----------------
[FORM OF
ASSIGNMENT AND ACCEPTANCE]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of May 5, 1998 (as
amended, supplemented or otherwise modified from time to time, the "Credit
------
Agreement"), among Alliance Laundry Holdings LLC ("Holdings"), Alliance Laundry
--------- --------
Systems LLC (the "Borrower"), the Lenders parties thereto, Xxxxxx Brothers,
--------
Inc., as Arranger, Xxxxxx Commercial Paper Inc., as Syndication Agent, and
General Electric Capital Corporation, as administrative agent for the Lenders
(in such capacity, the "Administrative Agent"). Unless otherwise defined herein,
--------------------
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement.
The Assignor identified on Schedule l hereto (the "Assignor") and the
--------
Assignee identified on Schedule l hereto (the "Assignee") agree as follows:
--------
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the interest described in Schedule 1 hereto
(the "Assigned Interest") in and to the Assignor's rights and obligations under
-----------------
the Credit Agreement with respect to those credit facilities contained in the
Credit Agreement as are set forth on Schedule 1 hereto (individually, an
"Assigned Facility"; collectively, the "Assigned Facilities"), in a principal
------------------ -------------------
amount for each Assigned Facility as set forth on Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Holdings, the Borrower, any of their respective
Subsidiaries or any other obligor or the performance or observance by Holdings,
the Borrower, any of their respective Subsidiaries or any other obligor of any
of their respective obligations under the Credit Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; and (c) attaches any Notes held by it evidencing the Assigned
Facilities and (i) requests that the Administrative Agent, upon request by the
Assignee, exchange the attached Notes for a new Note or Notes payable to the
Assignee and (ii) if the Assignor has retained any interest in the Assigned
Facility, requests that the Administrative Agent exchange the attached Notes for
a new Note or Notes payable to the Assignor, in each case in amounts which
reflect the assignment being made hereby (and after giving effect to any other
assignments which have become effective on the Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to Sections 4.1 and 6.1 thereof and such
other documents and information as it has deemed appropriate to make
2
its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon the
Assignor, the Agents or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (d) appoints and authorizes the Agents to take such action as
agent on its behalf and to exercise such powers and discretion under the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agents by the terms
thereof, together with such powers as are incidental thereto; and (e) agrees
that it will be bound by the provisions of the Credit Agreement and will perform
in accordance with its terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender including, if it
is organized under the laws of a jurisdiction outside the United States, its
obligation pursuant to Section 2.20(d) of the Credit Agreement.
4. Subject to receipt of any consents required under the Credit
Agreement and the payment of any processing fee required under Section 10.6(e)
of the Credit Agreement, the effective date of this Assignment and Acceptance
shall be the Effective Date of Assignment described in Schedule 1 hereto (the
"Effective Date"). Following the execution of this Assignment and Acceptance,
---------------
it will be delivered to the Administrative Agent for acceptance by it and
recording by the Administrative Agent pursuant to the Credit Agreement,
effective as of the Effective Date (which shall not, unless otherwise agreed to
by the Administrative Agent, be earlier than five Business Days after the date
of such acceptance and recording by the Administrative Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) [to the Assignor for amounts which have accrued to the Effective Date
and to the Assignee for amounts which have accrued subsequent to the Effective
Date] [to the Assignee whether such amounts have accrued prior to the Effective
Date or accrue subsequent to the Effective Date. The Assignor and the Assignee
shall make all appropriate adjustments in payments by the Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves].
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
Schedule 1
to Assignment and Acceptance
Name of Assignor: ______________________________________________
Name of Assignee: ______________________________________________
Effective Date of Assignment: __________________________________
Credit Principal
Facility Assigned Amount Assigned Commitment Percentage Assigned1
--------------------------- ----------------- ---------------------------------
$____________ __._____________%
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By:_______________________________ By:_____________________________
Title: Title:
Accepted [and Consented To]: [Consented To:
________________, as Administrative Agent ALLIANCE LAUNDRY SYSTEMS LLC
By:_______________________________ By:_____________________________
Title: Title:
XXXXXX COMMERCIAL PAPER INC., as
Syndication Agent
By:_____________________________
Title:]
_______________________
1. Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the aggregate commitments of all
Lenders.
TERM NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.
$5,800,000.00 New York, New York
May 5, 1998
FOR VALUE RECEIVED, the undersigned, ALLIANCE LAUNDRY SYSTEMS LLC, a
Delaware limited liability company (the "Borrower"), hereby unconditionally
--------
promises to pay to GENERAL ELECTRIC CREDIT CORPORATION (the "Lender") or its
------
registered assigns at the Payment Office specified in the Credit Agreement (as
hereinafter defined), in lawful money of the United States and in immediately
available funds, the principal amount of (a) FIVE MILLION EIGHT HUNDRED THOUSAND
DOLLARS ($5,800,000.00), or, if less, (b) the unpaid principal amount of the
Term Loan of the Lender outstanding under the Credit Agreement. The principal
amount shall be paid in the amounts and on the dates specified in Section 2.3 of
the Credit Agreement. The Borrower further agrees to pay interest in like money
at such office on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in Section 2.15 of the
Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on continuations thereof which shall be
attached hereto and made a part hereof the date, Type and amount of the Term
Loan evidenced hereby and the date and amount of each payment or prepayment of
principal with respect thereto, each conversion of all or a portion thereof to
another Type, each continuation of all or a portion thereof as the same Type
and, in the case of Eurodollar Loans, the length of each Interest Period and the
Eurodollar Rate with respect thereto. Each such endorsement shall constitute
prima facie evidence of the accuracy of the information endorsed. The failure
----- -----
to make any such endorsement or any error in any such endorsement shall not
affect the obligations of the Borrower in respect of the Term Loan.
This Note (a) is one of the Term Notes referred to in the Credit
Agreement, dated as of May 5, 1998 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Alliance Laundry
----------------
Holdings LLC, the Borrower, the Lender, the other banks and financial
institutions or entities from time to time parties thereto, Xxxxxx Brothers,
Inc., as Arranger, Xxxxxx Commercial Paper Inc., as Syndication Agent, and
General Electric Capital Corporation, as Administrative Agent, (b) is subject to
the provisions of the Credit Agreement and (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Credit Agreement.
This Note is secured and guaranteed as provided in the Loan Documents.
Reference is hereby made to the Loan Documents for a description of the
properties and assets in which a security interest has been granted, the nature
and extent of the security and the guarantees, the terms and conditions upon
which the security interests and each guarantee were granted and the rights of
the holder of this Note in respect thereof.
2
Upon the occurrence of any one or more of the Events of Default, all
principal and all accrued interest then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE
CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN
ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 10.6 OF THE
CREDIT AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
ALLIANCE LAUNDRY SYSTEMS LLC
By: _______________________________
Name:
Title:
Schedule A
to Term Note
------------
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
___________________________________________________________________________________________________________________________________
Amount Amount of Base Rate
Amount of Base Converted to Amount of Principal of Loans Converted to Unpaid Principal Balance Notation
Date Rate Loans Base Rate Loans Base Rate Loans Repaid Eurodollar Loans of Base Rate Loans Made By
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
===================================================================================================================================
Schedule B
to Term Note
------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
___________________________________________________________________________________________________________________________________
Unpaid
Interest Period Amount of Amount of Principal
and Eurodollar Principal of Eurodollar Loans Balance of Notation
Amount of Amount Converted Rate with Eurodollar Loans Converted to Eurodollar Made
Date Eurodollar Loans to Eurodollar Loans Respect Thereto Repaid Base Rate Loans Loans By
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
===================================================================================================================================
REVOLVING CREDIT NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.
$8,700,000.00 New York, New York
May 5, 1998
FOR VALUE RECEIVED, the undersigned, ALLIANCE LAUNDRY SYSTEMS LLC, a
Delaware limited liability company (the "Borrower"), hereby unconditionally
--------
promises to pay to GENERAL ELECTRIC CREDIT CORPORATION (the "Lender") or its
------
registered assigns at the Payment Office specified in the Credit Agreement (as
hereinafter defined), in lawful money of the United States and in immediately
available funds, on the Revolving Credit Termination Date the principal amount
of (a) EIGHT MILLION SEVEN HUNDRED THOUSAND DOLLARS ($8,700,000.00) or, if less,
(b) the aggregate unpaid principal amount of all Revolving Credit Loans of the
Lender outstanding under the Credit Agreement. The Borrower further agrees to
pay interest in like money at such Payment Office on the unpaid principal amount
hereof from time to time outstanding at the rates and on the dates specified in
Section 2.15 of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on continuations thereof which shall be
attached hereto and made a part hereof the date, Type and amount of each
Revolving Credit Loan of the Lender outstanding under the Credit Agreement and
the date and amount of each payment or prepayment of principal thereof, each
continuation of all or a portion thereof as the same Type, each conversion of
all or a portion thereof to another Type and, in the case of Eurodollar Loans,
the length of each Interest Period and the Eurodollar Rate with respect thereto.
Each such endorsement shall constitute prima facie evidence of the accuracy of
----- -----
the information endorsed. The failure to make any such endorsement or any error
in any such endorsement shall not affect the obligations of the Borrower in
respect of any Revolving Credit Loan.
This Note (a) is one of the Revolving Credit Notes referred to in the
Credit Agreement, dated as of May 5, 1998 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Alliance Laundry
----------------
Holdings LLC, the Borrower, the Lender, the other banks and financial
institutions or entities from time to time parties thereto, Xxxxxx Brothers,
Inc., as Arranger, Xxxxxx Commercial Paper Inc., as Syndication Agent, and
General Electric Capital Corporation, as Administrative Agent, (b) is subject to
the provisions of the Credit Agreement and (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Credit Agreement.
This Note is secured and guaranteed as provided in the Loan Documents.
Reference is hereby made to the Loan Documents for a description of the
properties and assets in which a security interest has been granted, the nature
and extent of the security and the guarantees, the terms and conditions upon
which the security interests and each guarantee were granted and the rights of
the holder of this Note in respect thereof.
2
Upon the occurrence of any one or more of the Events of Default, all
principal and all accrued interest then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE
CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN
ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 10.6 OF THE
CREDIT AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
ALLIANCE LAUNDRY SYSTEMS LLC
By: _______________________________
Name:
Title:
Schedule A
to Revolving Credit Note
------------------------
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
___________________________________________________________________________________________________________________________________
Amount Amount of Base Rate
Amount of Base Converted to Amount of Principal of Loans Converted to Unpaid Principal Balance Notation
Date Rate Loans Base Rate Loans Base Rate Loans Repaid Eurodollar Loans of Base Rate Loans Made By
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
===================================================================================================================================
Schedule B
to Revolving Credit Note
------------------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
___________________________________________________________________________________________________________________________________
Unpaid
Interest Period Amount of Amount of Principal
and Eurodollar Principal of Eurodollar Loans Balance of Notation
Amount of Amount Converted Rate with Eurodollar Loans Converted to Eurodollar Made
Date Eurodollar Loans to Eurodollar Loans Respect Thereto Repaid Base Rate Loans Loans By
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________
===================================================================================================================================
SWING LINE NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.
$10,000,000 New York, New York
May 5, 1998
FOR VALUE RECEIVED, the undersigned, ALLIANCE LAUNDRY SYSTEMS LLC, a
Delaware limited liability company (the "Borrower"), hereby unconditionally
--------
promises to pay to GENERAL ELECTRIC CREDIT CORPORATION (the "Swing Line Lender")
-----------------
or its registered assigns at the Payment Office specified in the Credit
Agreement (as hereinafter defined) in lawful money of the United States and in
immediately available funds, on the Revolving Credit Termination Date the
principal amount of (a) TEN MILLION DOLLARS ($10,000,000) or, if less, (b) the
aggregate unpaid principal amount of all Swing Line Loans made by the Swing Line
Lender to the Borrower pursuant to Section 2.6 of the Credit Agreement. The
Borrower further agrees to pay interest in like money at such office on the
unpaid principal amount hereof from time to time outstanding at the rates and on
the dates specified in Section 2.15 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedule
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date and amount of each Swing Line
Loan made pursuant to the Credit Agreement and the date and amount of each
payment or prepayment of principal thereof. Each such endorsement shall
constitute prima facie evidence of the accuracy of the information endorsed. The
----- -----
failure to make any such endorsement or any error in any such endorsement shall
not affect the obligations of the Borrower in respect of any Swing Line Loan.
This Note (a) is the Swing Line Note referred to in the Credit
Agreement, dated as of May 5, 1998 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Alliance Laundry
----------------
Holdings LLC, the Borrower, the Swing Line Lender, the other banks and financial
institutions or entities from time to time parties thereto, Xxxxxx Brothers,
Inc., as Arranger, Xxxxxx Commercial Paper Inc., as Syndication Agent, and
General Electric Capital Corporation, as Administrative Agent, (b) is subject to
the provisions of the Credit Agreement and (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Credit Agreement.
This Note is secured and guaranteed as provided in the Loan Documents.
Reference is hereby made to the Loan Documents for a description of the
properties and assets in which a security interest has been granted, the nature
and extent of the security and the guarantees, the terms and conditions upon
which the security interests and each guarantee were granted and the rights of
the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
principal and all accrued interest then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
2
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE
CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN
ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 10.6 OF THE
CREDIT AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
ALLIANCE LAUNDRY SYSTEMS LLC
By: _______________________________
Name:
Title:
Schedule A
to Swing Line Note
------------------
LOANS AND REPAYMENTS OF SWING LINE LOANS
_______________________________________________________________________________________________________________________
Amount of Amount of Principal of Swing Unpaid Principal Balance of
Date Swing Line Loans Line Loans Repaid Swing Line Loans Notation Made By
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
=======================================================================================================================
EXHIBIT H TO
CREDIT AGREEMENT
----------------
[FORM OF
PREPAYMENT OPTION NOTICE]
[Name and Address of
Term Loan Lender]
Attention of [ ]
Telecopy No. [ ]
[Date]
Ladies and Gentlemen:
The undersigned, General Electric Capital Corporation, as
administrative agent (in such capacity, the "Administrative Agent") for the
--------------------
Lenders, refers to the Credit Agreement, dated as of May 5, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
----------------
among Alliance Laundry Holdings LLC, Alliance Laundry Systems LLC (the
"Borrower"), the Lenders from time to time parties thereto, Xxxxxx Brothers,
--------
Inc., as Arranger, Xxxxxx Commercial Paper Inc., as Syndication Agent and the
Administrative Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
The Administrative Agent hereby gives notice of an offer of prepayment made by
the Borrower pursuant to Section 2.18(d) of the Credit Agreement of the
Prepayment Amount. The portion of the Prepayment Amount to be allocated to the
Term Loan held by you and the date on which such prepayment will be made to you
(should you elect to receive such prepayment) are set forth below:
(A) Total Prepayment Amount _____________
(B) Portion of Prepayment Amount to be received by
you _____________
(C) Prepayment Date (10 Business Days after the date
of this Prepayment Option Notice) _____________
IF YOU DO NOT WISH TO RECEIVE ALL OF THE PREPAYMENT AMOUNT TO BE
ALLOCATED TO YOU ON THE PREPAYMENT DATE INDICATED IN PARAGRAPH (C) ABOVE, please
sign this notice in the space provided below and indicate the percentage of the
Prepayment Amount otherwise payable to you which you do not wish to receive.
Please return this notice as so completed via telecopy to the attention of
2
[___________________] at ____________________, no later than [10:00] a.m., New
-------------------------------
York City time, on the Prepayment Date, at Telecopy No. [________________]. IF
--------------
YOU DO NOT RETURN THIS NOTICE, YOU WILL RECEIVE 100% OF THE PREPAYMENT AMOUNT
ALLOCATED TO YOU ON THE PREPAYMENT DATE.
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
By: ______________________________________
Name:
Title:
[Term Loan Lender]
By: ______________________________________
Name:
Title:
Percentage of
Prepayment Amount Allocated to You
Declined: _________%
EXHIBIT I TO
CREDIT AGREEMENT
----------------
[FORM OF EXEMPTION CERTIFICATE]
Reference is made to the Credit Agreement, dated as of May 5, 1998 (as
amended, supplemented or otherwise modified from time to time, the "Credit
------
Agreement") among Alliance Laundry Holdings LLC ("Holdings"), Alliance Laundry
--------- --------
Systems LLC, a Delaware limited liability company (the "Borrower"), the several
--------
banks and other financial institutions from time to time parties thereto (the
"Lenders"), Xxxxxx Brothers, Inc., as Arranger, Xxxxxx Commercial Paper Inc., as
--------
Syndication Agent, and General Electric Capital Corporation, as administrative
agent for the Lenders (in such capacity, the "Administrative Agent").
--------------------
Capitalized terms used herein that are not defined herein shall have the
meanings ascribed to them in the Credit Agreement. ______________________ (the
"Non-U.S. Lender") is providing this certificate pursuant to Section 2.20(d) of
----------------
the Credit Agreement. The Non-U.S. Lender hereby represents and warrants that:
1. The Non-U.S. Lender is the sole record and beneficial owner of
the Loans or the obligations evidenced by Note(s) in respect of which it is
providing this certificate.
2. The Non-U.S. Lender is not a "bank" for purposes of Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). In
----
this regard, the Non-U.S. Lender further represents and warrants that:
(a) the Non-U.S. Lender is not subject to regulatory or other legal
requirements as a bank in any jurisdiction; and
(b) the Non-U.S. Lender has not been treated as a bank for purposes of
any tax, securities law or other filing or submission made to any
Governmental Authority, any application made to a rating agency or
qualification for any exemption from tax, securities law or other
legal requirements;
3. The Non-U.S. Lender is not a 10-percent shareholder of the
Borrower within the meaning of Section 881(c)(3)(B) of the Code; and
4. The Non-U.S. Lender is not a controlled foreign corporation
receiving interest from a related person within the meaning of Section
881(c)(3)(C) of the Code.
5. The income from the Note(s) held by the undersigned is not
effectively connected with the conduct of a trade or business within the United
States (as hereinafter defined).
6. The undersigned is a person other than (i) a citizen or resident
of the United States of America, its territories and possessions (including the
Commonwealth of Puerto Rico and all other areas subject to its jurisdiction)
(for purposes of this Certificate, the "United States"), (ii) a corporation or
-------------
partnership created or organized under the laws of the United States or any
political subdivision thereof or therein, (iii) an estate that is subject to
United States federal income taxation regardless of the source of its income or
(iv) a trust which is subject to the supervision of a court within the United
States and the control of a United States fiduciary as described in section
7701(a)(30) of the Code; and
2
7. The undersigned is not a natural person.
By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall so
inform the Administrative Agent and the Borrower in writing within thirty days
of such change and (2) the undersigned shall furnish the Administrative Agent
and the Borrower a properly completed and currently effective certificate in
either the calendar year in which payment is to be made by the Administrative
Agent and the Borrower to the undersigned, or in either of the two calendar
years preceding such payment.
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate.
[NAME OF NON-U.S. LENDER]
By: ____________________________
Name:
Title:
Date: ____________________
SCHEDULE I
[Waived Conditions Precedent]
[Describe any conditions precedent waived on
Closing Date and terms of any waiver]
ANNEX 1
[Board Resolutions]
ANNEX 2
[By-Laws]
[Limited Liability Company Agreement]
ANNEX 3
[Certificate of Incorporation]
[Certificate of Formation]
