Exhibit 17(A)
===============================================================================
CREDIT AGREEMENT
among
XXXXXXX INTERNATIONAL, INC.,
SIGI ACQUISITION CORPORATION,
XXXXXXX INTERNATIONAL GROUP INC.,
The Other Credit Parties Signatory Hereto,
The Several Lenders
from Time to Time Parties Hereto,
BANKBOSTON, N.A.,
as Administrative Agent,
THE BANK OF NOVA SCOTIA,
as Syndication Agent,
CREDIT LYONNAIS NEW YORK BRANCH,
as Documentation Agent,
and
THE CHASE MANHATTAN BANK,
as Managing Agent
Dated as of June __, 1999
BANCBOSTON XXXXXXXXX XXXXXXXX, as Sole Arranger
===============================================================================
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS.................................................................................1
1.1 Defined Terms.....................................................................................1
1.2 Other Definitional Provisions....................................................................17
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS............................................................18
2.1 Revolving Credit Commitments.....................................................................18
2.2 Procedure for Revolving Credit Borrowing.........................................................18
2.3 Commitment Fee...................................................................................19
2.4 Termination or Reduction of Revolving Credit Commitments.........................................20
2.5 Term Loans.......................................................................................20
2.6 Procedure for Term Loan Borrowing................................................................20
2.7 Swing Line Commitment............................................................................21
2.8 Repayment of Loans; Evidence of Debt.............................................................22
2.9 Optional Prepayments.............................................................................23
2.10 Mandatory Prepayments...........................................................................24
2.11 Conversion and Continuation Options.............................................................25
2.12 Maximum Number of Eurodollar Loans..............................................................25
2.13 Interest Rates and Payment Dates................................................................25
2.14 Computation of Interest and Fees................................................................26
2.15 Inability to Determine Interest Rate............................................................26
2.16 Pro Rata Treatment and Payments.................................................................27
2.17 Illegality......................................................................................28
2.18 Requirements of Law.............................................................................28
2.19 Taxes...........................................................................................29
2.20 Indemnity.......................................................................................31
2.21 Fees............................................................................................31
2.22 Letters of Credit...............................................................................31
SECTION 3. REPRESENTATIONS AND WARRANTIES.............................................................33
3.1 Financial Condition..............................................................................33
3.2 No Change........................................................................................34
3.3 Corporate Existence; Compliance with Law.........................................................34
3.4 Corporate Power; Authorization; Enforceable Obligations..........................................34
3.5 No Legal Bar.....................................................................................35
3.6 No Material Litigation...........................................................................35
3.7 No Default.......................................................................................35
3.8 Ownership of Property; Liens.....................................................................35
3.9 Intellectual Property............................................................................36
3.10 No Burdensome Restrictions......................................................................36
3.11 Taxes...........................................................................................36
i
3.12 Federal Regulations.............................................................................36
3.13 ERISA...........................................................................................36
3.14 Investment Company Act; Other Regulations.......................................................37
3.15 Subsidiaries....................................................................................37
3.16 Purpose of Loans................................................................................37
3.17 Environmental Matters...........................................................................37
3.18 Solvency........................................................................................38
3.19 Security Documents..............................................................................38
3.20 Regulation H....................................................................................39
3.21 Accuracy of Information.........................................................................39
3.22 Year 2000 Compliance............................................................................39
SECTION 4. CONDITIONS PRECEDENT.......................................................................40
4.1 Conditions to Initial Loans......................................................................40
4.2 Conditions to Each Loan..........................................................................45
SECTION 5. AFFIRMATIVE COVENANTS......................................................................46
5.1 Financial Statements.............................................................................46
5.2 Certificates; Other Information..................................................................46
5.3 Payment of Obligations...........................................................................47
5.4 Maintenance of Existence.........................................................................47
5.5 Maintenance of Property; Insurance...............................................................47
5.6 Inspection of Property; Books and Records; Discussions...........................................48
5.7 Notices..........................................................................................48
5.8 Environmental Laws...............................................................................49
5.9 Additional Subsidiaries..........................................................................49
5.10 After-Acquired Property.........................................................................50
5.11 Foreign Subsidiary..............................................................................50
5.12 Interest Rate Protection........................................................................50
5.13 Capital Contribution............................................................................50
5.14 Year 2000 Compliance............................................................................51
SECTION 6. NEGATIVE COVENANTS.........................................................................51
6.1 Financial Condition Covenants....................................................................51
6.2 Limitation on Indebtedness.......................................................................52
6.3 Limitation on Liens..............................................................................52
6.4 Limitation on Guarantee Obligations..............................................................53
6.5 Limitation on Fundamental Changes................................................................53
6.6 Limitation on Sale of Assets.....................................................................54
6.7 Limitation on Dividends..........................................................................54
6.8 Limitation on Capital Expenditures...............................................................55
6.9 Limitation on Investments, Loans and Advances....................................................55
6.10 Limitation on Optional Payments and Modifications of Debt Instruments...........................56
6.11 Limitation on Transactions with Affiliates......................................................56
ii
6.12 Limitation on Sales and Leasebacks..............................................................56
6.13 Limitation on Changes in Fiscal Year............................................................56
6.14 Limitation on Negative Pledge Clauses...........................................................56
6.15 Limitations on Lines of Business................................................................57
6.16 Limitation on Acquisitions......................................................................57
SECTION 7. EVENTS OF DEFAULT..........................................................................57
SECTION 8. ADMINISTRATIVE AGENT.......................................................................60
8.1 Appointment......................................................................................60
8.2 Delegation of Duties.............................................................................60
8.3 Exculpatory Provisions...........................................................................60
8.4 Reliance by Administrative Agent.................................................................61
8.5 Notice of Default................................................................................61
8.6 Non-Reliance on Administrative Agent and Other Lenders...........................................61
8.7 Indemnification..................................................................................62
8.8 Administrative Agent in Its Individual Capacity..................................................62
8.9 Successor Administrative Agent...................................................................63
8.10 Syndication Agent; Documentation Agent; Managing Agent..........................................63
SECTION 9. MISCELLANEOUS..............................................................................63
9.1 Amendments and Waivers...........................................................................63
9.2 Notices..........................................................................................64
9.3 No Waiver; Cumulative Remedies...................................................................64
9.4 Survival of Representations and Warranties.......................................................65
9.5 Payment of Expenses and Taxes....................................................................65
9.6 Successors and Assigns; Participation and Assignments............................................65
9.7 Adjustments; Set-off.............................................................................68
9.8 Counterparts.....................................................................................68
9.9 Severability.....................................................................................68
9.10 Integration.....................................................................................69
9.11 GOVERNING LAW...................................................................................69
9.12 Submission To Jurisdiction; Waivers.............................................................69
9.13 Acknowledgements................................................................................69
9.14 WAIVERS OF JURY TRIAL...........................................................................70
9.15 Confidentiality.................................................................................70
iii
SCHEDULES
Schedule I Lenders, Commitments and Addresses for Notices
Schedule 3.1(a) Liabilities
Schedule 3.6 Litigation
Schedule 3.8 Properties
Schedule 3.13 ERISA Matters
Schedule 3.15 Subsidiaries
Schedule 3.19(c) Mortgage Filing Offices
Schedule 6.4(a) Guarantee Obligations
EXHIBITS
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Swing Line Note
Exhibit A-3 Form of Term Note
Exhibit B-1 Form of Subsidiaries Guarantee
Exhibit B-2 Form of Hay Island Limited Recourse Guarantee
Exhibit B-3 Form of Newco Guarantee
Exhibit C-1 Form of Borrower Security Agreement
Exhibit C-2 Form of Subsidiaries Security Agreement
Exhibit D-1 Form of Subsidiaries Stock Pledge Agreement
Exhibit D-2 Form of Newco Stock Pledge Agreement
Exhibit D-3 Form of Subsidiaries Note Pledge Agreement
Exhibit D-4 Form of Hay Island Stock Pledge Agreement
Exhibit E-1 Form of Mortgage
Exhibit E-2 Form of Leasehold Mortgage
Exhibit E-3 Form of Deed of Trust
Exhibit E-4 Form of Deed to Secure Debt
Exhibit F Form of Borrowing Certificate
Exhibit G-1 Form of Legal Opinion of Schnader, Harrison, Xxxxx & Xxxxx
Exhibits G-2 Form of Legal Opinion of Local Counsel
Exhibit H Form of Solvency Certificate
Exhibit I Form of Swing Line Loan Participation Certificate
Exhibit J Form of Assignment and Acceptance
iv
CREDIT AGREEMENT, dated as of June __, 1999, among (i) XXXXXXX
INTERNATIONAL, INC., a Delaware corporation, (ii) SIGI ACQUISITION CORPORATION,
a Delaware corporation, (iii) XXXXXXX INTERNATIONAL GROUP INC., a Delaware
corporation, (iv) the other Credit Parties signatory hereto, (v) the financial
institutions from time to time parties to this Agreement, (vi) THE BANK OF NOVA
SCOTIA, as Syndication Agent, (vii) CREDIT LYONNAIS, NEW YORK BRANCH, as
Documentation Agent, (viii) THE CHASE MANHATTAN BANK, as Managing Agent, and
(ix) BANKBOSTON, N.A., as administrative agent for the Lenders hereunder (in
such capacity, as more fully defined in Section 1.1, the "Administrative
Agent").
Background
A. At the request of the Borrowers and the Parent, pursuant to this
Agreement, the Administrative Agent has arranged a syndicate of Lenders to make
available: (a) a term credit facility to Newco to (i) fund the Merger
Consideration and (ii) allow Newco to establish the Dissenting Shareholder
Reserve; and (b) a revolving credit facility to OpCo to (i) refinance the
Existing Indebtedness, (ii) fund ongoing working capital needs, and (iii) fund
general corporate purposes, including capital expenditures.
B. Contemporaneously with the execution and delivery of this Agreement
and the making of the Loans hereunder, the Parent and Newco are effecting the
Merger pursuant to the Merger Agreement.
Agreement
In consideration of the Background and the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties, intending to be legally bound, hereto agree as follows:
SECTION 10. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Acquisition": means any transaction pursuant to which either of
the Borrowers or any of its Subsidiaries (a) acquires equity securities
(or warrants, options or other rights to acquire such securities) of
any Person other than either of the Borrowers or any Person which is
not then a Subsidiary of either of the Borrowers, pursuant to a
solicitation of tenders therefor, or in one or more negotiated block,
market or other transactions not involving a tender offer, or a
combination of any of the foregoing, or (b) makes any Person a
Subsidiary of either of the Borrowers, or causes any such Person to be
merged into either of the Borrowers or any of its Subsidiaries, in any
case pursuant to a merger, purchase of assets or any reorganization
providing for the delivery or issuance to the holders of such Person's
then outstanding securities, in exchange for such securities, of cash
or securities of either of the Borrowers or any of its Subsidiaries, or
a combination thereof, or (c) purchases all or substantially all of the
business or assets of any Person.
"Administrative Agent": BankBoston, N.A., together with its
affiliates, as the agent for the Lenders under this Agreement and the
other Loan Documents.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 20% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Margin": for each Type of Loan, the rate per annum set
forth below, corresponding to the ratio of Total Debt to EBITDA,
measured quarterly for the four consecutive fiscal quarters then ended,
applicable to Newco, on a consolidated basis, according to the most
recent Compliance Certificate delivered by the Borrowers to the
Administrative Agent, which rate shall be set at Level II until the
Borrowers have delivered a Compliance Certificate for the fiscal
quarter ending June 1999:
--------------------------------------------------------------------------------------
Level Total Eurodollar Base Rate
Debt/EBITDA Margin Margin
--------------------------------------------------------------------------------------
I >=2.75x 2.25% 0.500%
--------------------------------------------------------------------------------------
II >=2.50x < 2.75x 2.00% 0.250%
--------------------------------------------------------------------------------------
III >=2.00x < 2.50x 1.75% 0.000%
--------------------------------------------------------------------------------------
IV >=1.50x < 2.00x 1.50% 0.000%
--------------------------------------------------------------------------------------
V <1.50x 1.25% 0.000%
--------------------------------------------------------------------------------------
"Application": an application by OpCo, in form and containing
terms and provisions acceptable to the Issuing Lender, for the issuance
by the Issuing Lender of a Letter of Credit.
"Arranger": BancBoston Xxxxxxxxx Xxxxxxxx Inc., in its capacity as
arranger of the Loans.
"Asset Sale": any sale, sale-leaseback, or other disposition by
either Borrower or any Subsidiary thereof of any of its property or
assets, or any rights or interests therein or with respect thereto,
including the stock of any Subsidiary of such Borrower.
"Assignee": as defined in Section 9.6(c).
-2-
"Available Commitment": as to any Lender at any time, an amount
equal to the excess, if any, of (a) the amount of such Lender's
Revolving Credit Commitment over (b) the sum of (i) the aggregate
principal amount of all Revolving Credit Loans made by such Lender then
outstanding and (ii) such Lender's Commitment Percentage of the
aggregate unpaid principal amount at such time of all Swing Line Loans,
and (iii) such Lender's Commitment Percentage of Letter of Credit
Obligations (except for the purposes of calculating the Commitment Fee
under Section 2.3(a), the foregoing clause (ii) shall be deemed deleted
and clause (iii) shall be renumbered accordingly).
"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 BankBoston, N.A. as its base rate in effect at its
principal office in Boston (the Prime Rate not being intended to be the
lowest rate of interest charged by BankBoston, N.A. in connection with
extensions of credit to debtors); and "Federal Funds Effective Rate"
shall mean, for any day, the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate
is not so published for any day which is a Business Day, the average of
the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized
standing selected by it. 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.
"Borrowers": OpCo and Newco.
"Borrower Mortgages": the Mortgages, the Leasehold Mortgages, the
Deeds of Trust and the Deeds to Secure Debt to be executed and
delivered by OpCo, substantially in the form of Exhibits E-1, E-2, E-3
and E-4, covering the Fee Properties and the Wheeling, West Virginia
leasehold listed on Schedule 3.8, as the same may be amended,
supplemented or otherwise modified from time to time.
"Borrower Security Agreement": the Security Agreement to be
executed and delivered by each of the Borrowers, substantially in the
form of Exhibit C-1, as the same may be amended, supplemented or
otherwise modified from time to time.
"Borrower Security Documents": the collective reference to the
Borrower Security Agreement, the Stock Pledge Agreement executed by
each Borrower and the Borrower Mortgages and any other document that
may at any time be delivered to the Administrative Agent as security
for any Credit Party's obligations hereunder or under
-3-
any other Loan Document or any Interest Rate Hedge Agreement, as any
of the foregoing may be amended, supplemented or otherwise modified
from time to time.
"Borrowing Date": any Business Day specified in a notice pursuant
to Section 2.2, 2.6 or 2.7(a) as a date on which either Borrower, as
the case may be, requests the Lenders or the Swing Line Lender to make
Loans hereunder.
"Business": as defined in Section 3.17(b).
"Business Day": a day other than a Saturday, Sunday or other day
on which commercial banks in New York, New York or Stamford,
Connecticut are authorized or required by law to close.
"Capital Stock": any and all shares, interests, participation or
other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Capitalized Leases": Leases which are required to be capitalized
on the balance sheet of the lessee or obligor in accordance with GAAP.
"Cash Equivalents": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured
by the United States Government or any agency thereof, (b) certificates
of deposit and eurodollar time deposits with maturities of one year or
less from the date of acquisition and overnight bank deposits of any
Lender or of any commercial bank having capital and surplus in excess
of $500,000,000, (c) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States
Government, or (d) commercial paper of a domestic issuer rated at least
A-2 by Standard and Poor's Rating Group ("S&P") or P-2 by Xxxxx'x
Investors Service, Inc. ("Moody's).
"Cash Flow": for any period, (a) EBITDA minus (b) the aggregate
amount actually paid in cash during such period on account of (i)
capital expenditures permitted hereunder and (ii) income taxes, in each
case, determined on a consolidated basis in accordance with GAAP.
"Class A Consideration": the payment to each Class A Holder
(except Dissenting Shareholders) of $9.50 in cash for each Class A
Share owned by such Class A Holder, as more fully set forth in the
Merger Agreement.
"Class A Holders": the holders of record, as of the Closing Date,
of the Class A Shares.
"Class A Shares": the issued and outstanding shares of the
Parent's Class A Common Stock.
-4-
"Class B Shares": the issued and outstanding shares of the
Parent's Class B Common Stock.
"Closing Date": the date on which the conditions precedent set
forth in Section 4.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all assets of the Credit Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by
any Security Document.
"Commitment": as to any Lender, such Lender's Swing Line
Commitment (if any), Revolving Credit Commitment and Term Loan
Commitment, collectively.
"Commitment Percentage": as to any Lender at any time, the
percentage which such Lender's Commitment (or Revolving Credit
Commitment or Term Loan Commitment, as the context may require) (other
than the Swing Line Commitment) then constitutes of the aggregate
Commitments (or Revolving Credit Commitments or Term Loan Commitments,
respectively) (other than the Swing Line Commitment) or, at any time
after such Commitments shall have expired or terminated, the percentage
which the aggregate principal amount of such Lender's Loans (or
Revolving Credit Loans or Term Loans, respectively) (including, in the
case of Revolving Credit Loans, such Lender's Revolving Credit
Commitment Percentage of the aggregate unpaid principal amount at such
time of all Swing Line Loans and such Lender's Commitment Percentage of
Letter of Credit Obligations) then outstanding constitutes of the
aggregate principal amount of the Loans (or Revolving Credit Loans (and
Swing Line Loans and Letter of Credit Obligations) or Term Loans,
respectively) then outstanding.
"Commitment Period": the period from and including the date hereof
to, but not including, the Revolving Credit Termination Date or such
earlier date on which the Revolving Credit Commitments shall terminate
as provided herein.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with either Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes such Borrower and which is treated as a single employer under
Section 414 of the Code.
"Compliance Certificate" as defined in Section 5.2(b).
"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.
"Credit Parties": each Borrower, the Parent, Hay Island and each
direct or indirect Subsidiary of each Borrower which is a party to a
Loan Document or an Interest Rate Hedge Agreement.
-5-
"Default": any of the events specified in Section 7, whether or
not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Dissenting Shareholder Reserve": the amount established by Newco
as a reserve with respect to amounts which Newco reasonably believes it
will be required to pay to the Dissenting Shareholders.
"Dissenting Shareholders": one or more Class A Shareholders who
exercises dissenting shareholder rights as more fully set forth under
Section 262 of the Delaware General Corporation Law.
"Documentation Agent": Credit Lyonnais New York Branch.
"Dollars" and "$": dollars in lawful currency of the United States
of America.
"Domestic Subsidiary": any Subsidiary which is not a Foreign
Subsidiary.
"EBITDA": for any period, the sum of (i) Net Income for such
period, (ii) Interest Expense for such period and (iii) the amount of
income taxes, depreciation and amortization deducted from earnings in
determining such Net Income.
"Environmental Laws": any and all foreign, Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of
human health or the environment, as may have previously been, now are
or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of
the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate of interest
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 Telerate Service 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 Telerate Service (or otherwise
-6-
on such service), the "Eurodollar Base Rate" shall be determined by
reference to such other publicly available service for displaying
eurodollar rates as may be agreed upon by the Administrative Agent and
the Borrowers or, in the absence of such agreement, the "Eurodollar
Base Rate" shall instead be the rate per annum equal to the rate at
which the Administrative Agent is offered dollar deposits at or about
10:00 A.M., New York City time, two (2) Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market
where the eurodollar and foreign currency and exchange operations in
respect of its Eurodollar Loans are then being conducted for delivery
on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its
Eurodollar Loan to be outstanding during such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to which
is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to
the nearest 1/100th of 1%):
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Existing Credit Agreement": the Credit Agreement dated as of
November 20, 1997 among OpCo, the Parent, the lenders parties thereto,
Societe Generale, as Documentation Agent, and BankBoston, N.A., as
Administrative Agent, as amended, modified or otherwise supplemented
from time to time.
"Existing Indebtedness": all Indebtedness outstanding under the
Existing Credit Agreement on the Closing Date which will be refinanced
pursuant to the terms and conditions of this Agreement.
"Fee Property": as defined in Section 3.8.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
-7-
"Fixed Charges": for any period, the sum of:
(a) Interest Expense; and
(b) required amortization of (i) Indebtedness for the
period involved and (ii) discount or premium relating to any
such Indebtedness for any period involved, whether expensed or
capitalized.
in the case of Newco, on a consolidated basis, in accordance with GAAP.
"Fixed Charge Coverage Ratio": the ratio of Cash Flow to Fixed
Charges.
"Foreign Subsidiary": any Subsidiary of either Borrower which (a)
is organized under the laws of any jurisdiction outside the United
States of America or (b) conducts the major portion of its business
outside of the United States of America.
"Free Cash Flow": for any period, (a) Cash Flow minus (b) the sum
of (i) Fixed Charges, (ii) all dividends paid by Newco on account of
its Capital Stock, and (iii) all mandatory prepayments made by the
Borrowers in accordance with Section 2.10. For purposes hereof, the
calculation of Free Cash Flow shall be made for the period of the
immediately preceding four fiscal quarters of Newco prior to the fiscal
quarter in which Newco pays dividends and, for purposes of
determination, such dividends shall be deemed to have been made in such
prior period.
"Fronting Fee": an amount equal to one-eighth of one percent
(0.125%) of the stated amount of each Letter of Credit.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time, except that in
connection with any calculation of any amount referenced, directly or
indirectly, in Section 6.1, "GAAP" shall mean generally accepted
accounting principles in the United States of America consistent with
those utilized in preparing the audited financial statements referred
to in Section 3.1.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee": collectively, the Subsidiaries Guarantee, the Newco
Guarantee and the Hay Island Limited Recourse Guarantee.
"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
-8-
obligation of the guaranteeing person, whether or not contingent, (i)
to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds
(1) for the purchase or payment of any such primary obligation or (2)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing person 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 guaranteeing person in good faith.
"Hay Island": Hay Island Holding Corporation, a Delaware
corporation and the owner of the Class B Shares and, upon the
consummation of the Merger, the owner of all of the Newco Stock.
"Hay Island Limited Recourse Guarantee": the Limited Recourse
Guarantee to be executed and delivered by Hay Island, substantially in
the form of Exhibit B-2, as the same may be amended, supplemented or
otherwise modified from time to time, pursuant to which Hay Island
shall guaranty the obligations of the Borrowers under this Agreement
with recourse limited to Hay Island's interest in the Newco Stock,
pursuant to the Hay Island Stock Pledge Agreement.
"Hay Island Stock Pledge Agreement": the Stock Pledge Agreement to
be executed and delivered by Hay Island, substantially in the form of
Exhibit D-4.
"Indebtedness": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with
customary practices), (b) any other indebtedness of such Person which
is evidenced by a note, bond, debenture or similar instrument, (c) all
reimbursement and other obligations with respect to letters of credit,
bankers acceptances and surety bonds, whether or not matured, (d) all
obligations of such Person under Financing Leases, (e) all Guarantee
Obligations (without duplication) of such Person, (f) all obligations
of such Person in respect of acceptances issued or created for the
account of such Person and (g) all liabilities secured by any Lien on
any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof.
-9-
"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": as defined in Section 3.9.
"Interest Expense": for any period, the amount of interest
expense, both expensed and capitalized, of Newco, determined on a
consolidated basis in accordance with GAAP.
"Interest Payment Date": (a) as to any Base Rate Loan, the last
day of each March, June, September and December, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, and (c) as to any Eurodollar Loan
having an Interest Period longer than three months, each day which is
three months or a whole multiple thereof after the first day of such
Interest Period and the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by either Borrower in its notice of
borrowing or notice of conversion, as the case may be, given
with respect thereto; and
(ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by either 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:
(1) if any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(2) any Interest Period that would otherwise extend
beyond the Revolving Credit Termination Date or the Term Loan
Maturity Date, shall end on the Revolving Credit Termination
Date or the Term Loan Maturity Date, as the case may be;
(3) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no
-10-
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
(4) each Borrower shall select Interest Periods so as
not to require a payment or prepayment of principal of any
Eurodollar Loan during an Interest Period for such Loan.
"Interest Rate Hedge Agreements": all interest rate swaps, caps or
collar agreements or similar arrangements, whether under a Swap
Agreement or otherwise, entered into by either Borrower with any Person
who was a Lender at the time of entry into such agreement, providing
for financial protection against wide or unanticipated fluctuations in
interest rates or currency exchange rates or the exchange of nominal
interest obligations, either generally or under specific contingencies,
all as more fully set forth in such agreement.
"Issuing Lender": BankBoston, N.A. or any other Lender (with the
prior consent and agreement of such Lender), each in its capacity as
issuer of the Letters of Credit.
"Joint Venture": shall mean, depending on the jurisdiction of its
formation, a general partnership or joint venture in which either of
the Borrowers is a general partner or joint venturer, as the case may
be.
"L/C Draft": a draft drawn on the Issuing Lender pursuant to a
Letter of Credit.
"Leased Property": as defined in Section 3.8.
"Lenders": the financial institutions party to this Agreement who
have committed to make the Loans, and the respective successors and
assigns of each.
"Letter of Credit": any letter of credit issued by the Issuing
Lender, in its discretion but subject to the terms of this Agreement,
on the application of OpCo.
"Letter of Credit Fee": the amount equal to, from time to time,
the Applicable Margin per annum for Eurodollar Loans constituting
Revolving Loans.
"Letter of Credit Obligations": as to OpCo, at any time of
determination, an amount equal to the aggregate amounts available to be
drawn under Letters of Credit plus the aggregate of all unpaid
obligations of OpCo to reimburse the Issuing Lender for amounts drawn
under all Letters of Credit.
"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
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
-11-
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, any Notes, the Guarantees and
the Security Documents.
"Managing Agent": The Chase Manhattan Bank.
"Material Adverse Effect": a material adverse effect or through
the actions of one or more third parties, the likelihood of a material
adverse effect, on (a) the business, assets, operations, property,
condition (financial or otherwise) or prospects of either of the
Borrowers or any of its Subsidiaries or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or
any Interest Rate Hedge Agreements or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.
"Material Environmental Amount": an amount payable by either
Borrower and/or its Subsidiaries in excess of $5,000,000 for remedial
costs, compliance costs, compensatory damages, punitive damages, fines,
penalties or any combination thereof.
"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, or which could otherwise give rise to
any liability under, any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
"Merger": the merger of the Parent with and into Newco, with Newco
as the surviving entity, pursuant to the Merger Agreement.
"Merger Agreement": the Merger Agreement dated December 9, 1998,
by and among the Parent, Newco and Hay Island, pursuant to which the
parties thereto shall effect the Merger and the Class A Shares will be
converted, without any action on the part of the Class A Holders, into
the right to receive the Class A Consideration and the Class B Shares
will be converted into the Newco Stock.
"Merger Consideration": The Class A Consideration and, as more
fully set forth in the Merger Agreement, all costs and fees required to
be paid by Newco in connection with the Merger.
"Mortgages": the collective reference to the Borrower Mortgages
and each other Mortgage, Leasehold Mortgage, Deed of Trust and Deed to
Secure Debt made after the date hereof pursuant to Section 5.10(a).
"Multiemployer Plan": a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Income": for any period, net income of Newco, on a
consolidated basis (but in any case not including payments received by
any Borrower or any Subsidiary in respect of the Wheeling Bonds).
-12-
"Net Proceeds": the aggregate cash proceeds received by either
Borrower or any Subsidiary thereof in respect of:
(a) any issuance of Capital Stock after the Closing Date;
(b) any Asset Sale;
(c) any cash payments received in respect of promissory
notes delivered to either Borrower or any Subsidiary thereof
in respect of an Asset Sale;
in each case net of (without duplication) (A) the amount required to
repay any Indebtedness (other than the Loans) secured by a Lien on any
assets of such Person that are collateral for any such debt securities
or loans that are sold or otherwise disposed of in connection with such
Asset Sale, (B) the reasonable expenses (including legal fees and
brokers' and underwriters' commissions, lenders fees or credit
enhancement fees, in any case, paid to third parties or, to the extent
permitted hereby, Affiliates) incurred in effecting such issuance or
sale and (C) any taxes reasonably attributable to such sale and
reasonably estimated by such Person to be actually payable.
"Net Worth": as of the date of determination, all items which in
conformity with GAAP would be included under shareholders' equity on a
consolidated balance sheet of Newco at such date.
"Newco": SIGI Acquisition Corporation, a Delaware corporation and
its successors and assigns which, contemporaneously with the Merger,
shall change its name to Xxxxxxx International Group Inc., and which,
as a result of the Merger, shall be the owner of all of the issued and
outstanding capital stock of OpCo.
"Newco Stock": all of the issued and outstanding capital stock of
Newco.
"Newco Guarantee": the Guarantee to be executed and delivered by
Newco substantially in the form of Exhibit B-3, as the same may be
amended, supplemented or otherwise modified from time to time.
"Newco Stock Pledge Agreement": the Newco Stock Pledge Agreement
to be executed and delivered by Newco, substantially in the form of
Exhibit D-2, as the same may be amended, supplemented or otherwise
modified from time to time.
"Non-Excluded Taxes": as defined in Section 2.19(a).
"Notes": the collective reference to the Swing Line Note, the
Revolving Credit Notes and the Term Notes.
"Obligations": shall mean "Secured Obligations" as defined in the
Security Agreements.
-13-
"OpCo": Xxxxxxx International, Inc., a Delaware corporation and
its successors and assigns.
"Parent": Xxxxxxx International Group Inc., a Delaware corporation
and its successors and assigns, which prior to the Merger, was the
owner of all of the issued and outstanding capital stock of OpCo, and
which, as a result of the Merger, will cease to exist as a separate
legal entity.
"Participant": as defined in Section 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": as defined in Section 6.16.
"Person": an individual, partnership, corporation, 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 either 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.
"Pledge Agreements": collectively, the Stock Pledge Agreements and
the Subsidiaries Note Pledge Agreement.
"Properties": as defined in Section 3.17(a).
"Refunded Swing Line Loans": as defined in Section 2.7(b).
"Register": as defined in Section 9.6(d).
"Regulation G": Regulation G of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Regulation X": Regulation X of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the thirty day notice
period is waived under Sections .13, .14, .16, .18, .19 or .20 of PBGC
Reg. ss. 2615.
-14-
"Required Lenders": at any time, Lenders the Commitment
Percentages of which aggregate at least 51%.
"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": any of the chief executive officer, chief
operating officer, president or, with respect only to financial
matters, chief financial officer of Newco.
"Revolving Credit Commitment": as to any Lender, the obligation of
such Lender to make Revolving Credit Loans to OpCo hereunder in an
aggregate principal amount at any one time outstanding not to exceed
the amount set forth opposite such Lender's name on Schedule I, as such
amount may be reduced from time to time in accordance with the
provisions of this Agreement.
"Revolving Credit Loans": as defined in Section 2.1(a).
"Revolving Credit Note": as defined in Section 2.8(e).
"Revolving Credit Termination Date": June __, 2004.
"Security Agreements": the collective reference to the Borrower
Security Agreement and the Subsidiaries Security Agreement.
"Security Documents": the collective reference to the Security
Agreements, the Stock Pledge Agreements, the Subsidiaries Note Pledge
Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any asset or
assets of any Person to secure the obligations and liabilities of the
Borrowers hereunder and under any of the other Loan Documents or any
Interest Rate Hedge Agreements or to secure any guarantee of any such
obligations and liabilities.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent": with respect to any Person on a particular date, the
condition that on such date, (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and mature, (c) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts
and liabilities mature, and (d) such Person is not engaged in business
or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an
unreasonably small amount of capital.
-15-
"Stock Pledge Agreements": the collective reference to the Newco
Stock Pledge Agreement, the Hay Island Stock Pledge Agreement and the
Subsidiaries Stock Pledge Agreement.
"Subsidiaries Guarantee": the Guarantee to be executed and
delivered by each Domestic Subsidiary, substantially in the form of
Exhibit B-1, as the same may be amended, supplemented or otherwise
modified from time to time.
"Subsidiaries Note Pledge Agreement": the Note Pledge Agreement to
be executed and delivered by Xxxxxxx International Finance Company,
substantially in the form of Exhibit D-3, as the same may be amended,
supplemented or otherwise modified from time to time.
"Subsidiaries Security Agreement": the Security Agreement to be
executed and delivered by each Domestic Subsidiary in favor of the
Administrative Agent, substantially in the form of Exhibit C-2, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Subsidiaries Stock Pledge Agreement": the Stock Pledge Agreement
to be executed and delivered by each Domestic Subsidiary of each of the
Borrowers, substantially in the form of Exhibit D-1, as the same may be
amended, supplemented or otherwise modified from time to time.
"Subsidiaries Security Documents": the collective reference to the
Subsidiaries Security Agreement, the Subsidiaries Stock Pledge
Agreement and the Subsidiaries Note Pledge Agreement.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of each of the Borrowers.
"Swap Agreement" as defined in 11 U.S.C. ss.101.
"Swing Line Commitment": the Swing Line Lender's obligation to
make Swing Line Loans pursuant to Section 2.7.
"Swing Line Lender": BankBoston, N.A., in its capacity as lender
of the Swing Line Loans.
"Swing Line Loan Participation Certificate": a certificate in
substantially the form of Exhibit I.
-16-
"Swing Line Loans": as defined in Section 2.7(a).
"Swing Line Note": as defined in Section 2.8(e).
"Syndication Agent": The Bank of Nova Scotia.
"Term Loan": as defined in Section 2.5.
"Term Loan Commitment": as to any Lender, the obligation of such
Lender to make Term Loans to Newco hereunder in an aggregate principal
amount equal to the amount set forth opposite such Lender's name on
Schedule I.
"Term Loan Draw Date": the date on which Newco shall draw the
proceeds of the Term Loan to pay the Class A Consideration to the Class
A Holders.
"Term Loan Maturity Date": June __, 2004.
"Term Note": as defined in Section 2.8(e).
"Ticking Fee": the amount equal to thirty-seven and one-half basis
points (0.375%) payable to each Lender based upon such Lender's
Commitment, payable on the Closing Date, for the period from February
1, 1999 through the Closing Date.
"Title Insurance Company": as defined in Section 4.1(x).
"Total Debt": with respect to any Person, at any time, the sum of
Indebtedness plus (b) the principal amount of all obligations under
Capitalized Leases, determined in each case on a consolidated basis in
accordance with GAAP.
"Total Leverage Ratio": the ratio of Total Debt to EBITDA for any
period of four consecutive fiscal quarters.
"Transferee": as defined in Section 9.6(f).
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Wheeling Bonds": collectively, the Series 1992A and Series 1992B
Industrial Development Revenue Bonds (Helme Tobacco Company Project)
issued by Ohio County, West Virginia, acting by and through The County
Commission of Ohio County, West Virginia, which bonds will be owned by
Xxxxxxx International Finance Company on and following the Closing
Date.
"Year 2000 Problem": as defined in Section 3.22.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
-17-
(b) As used herein and in any Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Borrowers and their 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 form of such terms.
SECTION 20. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("Revolving Credit Loans") to OpCo from time to time during the Commitment
Period in an aggregate principal amount at any one time outstanding not to
exceed the amount of such Lender's Revolving Credit Commitment less the sum of
(i) the product of (x) such Lender's Commitment Percentage and (y) the sum of
the Letter of Credit Obligations and the Swing Line Loans then outstanding and
(ii) the amount of such Lender's outstanding Revolving Credit Loans.
Notwithstanding the above, in no event shall any Revolving Credit Loans be made
if the aggregate amount of the Revolving Credit Loans to be made would, after
giving effect to the use of proceeds thereof, exceed the aggregate Available
Commitments. During the Commitment Period, OpCo 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.
(b) The Revolving Credit Loans may from time to time be (a)
Eurodollar Loans, (b) Base Rate Loans, or (c) a combination thereof, as
determined by OpCo and notified to the Administrative Agent in accordance with
Sections 2.2 and 2.11, 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.
2.2 Procedure for Revolving Credit Borrowing. OpCo may borrow
under the Revolving Credit Commitments during the Commitment Period on any
Business Day, provided that OpCo shall give the Administrative Agent irrevocable
notice which notice must be received by the Administrative Agent prior to 11:00
A.M., New York City time, (a) three Business Days prior to the requested
Borrowing Date, if all or any part of the requested Revolving Credit Loans are
to be initially Eurodollar Loans, or (b) one Business Day prior to the requested
Borrowing Date, if the requested Revolving Credit Loans are to be initially Base
Rate Loans specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, Base
Rate Loans or a combination thereof and (iv) if the borrowing is to be entirely
or partly of Eurodollar Loans, the respective amounts of each such Type of Loan
and the respective lengths of the initial Interest Periods therefor. Each
borrowing under the Revolving Credit Commitments shall be in an amount equal to
(x) in the case of Base Rate
-18-
Loans, $1,000,000 or a whole multiple of $500,000 in excess thereof (or the full
amount of the then Available Commitments) and (y) in the case of Eurodollar
Loans, $2,000,000 or a whole multiple of $500,000 in excess thereof, subject to
the provisions of Section 2.12, except that any borrowing under the Revolving
Credit Commitments to be used solely to pay a like amount of Swing Line Loans
may be in the aggregate principal amount of such Swing Line Loans. Upon receipt
of any such notice from OpCo, the Administrative Agent shall promptly notify
each Lender thereof. Each Lender will make the amount of its Commitment
Percentage of each borrowing available to the Administrative Agent for the
account of OpCo at the office of the Administrative Agent specified in Section
9.2 prior to 1:00 P.M., New York City time, on the Borrowing Date requested by
OpCo in funds immediately available to the Administrative Agent. Such borrowing
will then be made available to OpCo by the Administrative Agent crediting the
account of OpCo on the books of such office with the aggregate of the amounts
made available to the Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
2.3 Fees. (a) Commitment Fee. OpCo agrees to pay to the
Administrative Agent for the account of each Lender a revolving credit
commitment fee (the "Commitment Fee") on the average daily amount of the
Available Commitment of such Lender for the period from and including the first
day of the Commitment Period to the Revolving Credit Termination Date, computed
at the rate per annum set forth in Table 2.3 below, corresponding to the Total
Leverage Ratio, measured quarterly for the four consecutive fiscal quarters then
ended, applicable to Newco, on a consolidated basis, according to the most
recent Compliance Certificate delivered by the Borrowers to the Administrative
Agent, which rate shall be set at Level II as indicated on Table 2.3 until the
Borrowers have delivered a Compliance Certificate for the fiscal quarter ending
June 1999. The Commitment Fee shall be payable quarterly in arrears on the last
day of each March, June, September and December and on the Revolving Credit
Termination Date or such earlier date as the Revolving Credit Commitments shall
terminate as provided herein, commencing on the first of such dates to occur
after the date hereof.
TABLE 2.3
---------------------------------------------------------------------------
Level Total Debt/EBITDA Commitment Fee
---------------------------------------------------------------------------
I >=2.75x 0.500%
---------------------------------------------------------------------------
II >=2.50x < 2.75x 0.500%
---------------------------------------------------------------------------
III >=2.00x < 2.50x 0.375%
---------------------------------------------------------------------------
IV >=1.50x < 2.00x 0.375%
---------------------------------------------------------------------------
V <1.50x 0.250%
---------------------------------------------------------------------------
-19-
(b) Letter of Credit Fee. OpCo agrees to pay to the
Administrative Agent for the account of each Lender, the Letter of Credit Fee
computed on the average outstanding undrawn amount of Letters of Credit, payable
in arrears (A) for the preceding fiscal quarter on the first day of each fiscal
quarter subsequent to the Closing Date, and (B) on the Revolving Credit
Termination Date. The Letter of Credit Fee shall be increased by 2% upon the
occurrence of an Event of Default.
(c) Fronting Fee. OpCo agrees to pay to the Administrative
Agent for the account of the Issuing Lender, the Fronting Fee simultaneously
with the issuance of each Letter of Credit by the Issuing Lender.
2.4 Termination or Reduction of Revolving Credit Commitments. (a)OpCo
shall have the right, upon not less than five 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
however, that at any time, the aggregate amount of the Revolving Credit
Commitments shall not be reduced below the sum of (i) the aggregate outstanding
principal amount of (x) Swing Line Loans, (y) Revolving Credit Loans and (z)
Letter of Credit Obligations and (ii) $5,000,000. Any such reduction shall be in
an amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess
thereof and shall reduce permanently the Revolving Credit Commitments then in
effect.
(b) Any reduction of the Revolving Credit Commitments provided for in
this Section 2.4 shall be accompanied by prepayment of first, Swing Line Loans
and second, Revolving Credit Loans to the extent, if any, that the sum of the
aggregate outstanding principal amount of Swing Line Loans, Revolving Credit
Loans and Letter of Credit Obligations exceeds the amount of the aggregate
Revolving Credit Commitments as so reduced, pro rata among the Lenders.
2.5 Term Loans. Subject to the terms and conditions hereof, each Lender
severally agrees to make a term loan (a "Term Loan") to Newco on the Term Loan
Draw Date in an amount equal to the amount of the Term Loan Commitment of such
Lender then in effect. The Term Loans shall be (a) Eurodollar Loans, (b) Base
Rate Loans, or (c) a combination thereof, as determined by Newco and notified to
the Administrative Agent in accordance with Section 2.11.
2.6 Procedure for Term Loan Borrowing. Newco shall give the
Administrative Agent irrevocable notice on the Term Loan Draw Date requesting
that the Lenders make the Term Loans on the Term Loan Draw Date. On the Term
Loan Draw Date each Lender shall make available to the Administrative Agent at
its office specified in Section 9.2 the amount of such Lender's Commitment
Percentage of such Term Loans in immediately available funds. The Administrative
Agent shall on such date credit the account of Newco on the books of such office
of the Administrative Agent with the aggregate of the amounts made available to
the Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
2.7 Swing Line Commitment. (a)Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make swing line loans ("Swing Line
Loans") to OpCo
-20-
from time to time during the Commitment Period in an aggregate principal amount
at any one time outstanding not to exceed $5,000,000, provided that in no event
shall any Swing Line Loans be made if the aggregate amount of the Swing Line
Loans to be made would, after giving effect to the use of the proceeds thereof,
exceed the aggregate Available Commitments. Amounts borrowed by OpCo under this
Section 2.7 may be repaid and reborrowed through but excluding the Revolving
Credit Termination Date, or such earlier date as the Revolving Credit Commitment
shall terminate as provided herein, be reborrowed. All Swing Line Loans shall be
made as Base Rate Loans and shall not be entitled to be converted into
Eurodollar Loans. OpCo shall give the Swing Line Lender irrevocable notice
(which notice must be received by the Swing Line Lender prior to 3:00 p.m., New
York City time) on the requested Borrowing Date specifying the amount of each
requested Swing Line Loan, which shall be in an aggregate minimum amount of
$500,000 or a whole multiple of $100,000 in excess thereof. The proceeds of each
Swing Line Loan will be made available by the Swing Line Lender to OpCo by
crediting the account of OpCo at the office of the Swing Line Lender with such
proceeds. The proceeds of Swing Line Loans may be used solely for the purposes
referred to in Section 3.16.
(b) The Swing Line Lender at any time in its sole and absolute
discretion may, and on behalf of OpCo (which hereby irrevocably directs the
Swing Line Lender to act on its behalf), request each Lender, including the
Swing Line Lender, to make a Revolving Credit Loan in an amount equal to such
Lender's Revolving Credit Commitment Percentage of the amount of the Swing Line
Loans (the "Refunded Swing Line Loans") outstanding on the date such notice is
given. Unless any of the events described in clause (f) of Section 7 shall have
occurred (in which event the procedures of Section 2.7(c) shall apply) and,
subject to the terms and conditions hereof, each Lender shall make the proceeds
of its Revolving Credit Loan available to the Swing Line Lender for the account
of the Swing Line Lender at the office of the Swing Line Lender prior to 12:00
noon (New York City time) in funds immediately available on the Business Day
next succeeding the date such notice is given. The proceeds of such Revolving
Credit Loans shall be immediately applied to repay the Refunded Swing Line
Loans.
(c) If, prior to the making of a Revolving Credit Loan pursuant to
Section 2.7(b), one of the events described in clause (f) of Section 7 shall
have occurred, each Lender will, on the date such Loan was to have been made,
purchase an undivided participating interest in the Refunded Swing Line Loan in
an amount equal to its Revolving Credit Commitment Percentage of such Refunded
Swing Line Loan. Each Lender will immediately transfer to the Swing Line Lender
in immediately available funds, the amount of its participation and upon receipt
thereof the Swing Line Lender will deliver to such Lender a Swing Line Loan
Participation Certificate dated the date of receipt of such funds and in such
amount.
(d) Whenever, at any time after the Swing Line Lender has received from
any Lender such Lender's participating interest in a Refunded Swing Line Loan,
the Swing Line Lender receives any payment on account thereof, the Swing Line
Lender will distribute to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded) in like funds as received; provided, however, that in the event that
such payment received by the Swing Line Lender is required to be returned, such
Lender will return to
-21-
the Swing Line Lender any portion thereof previously distributed by the Swing
Line Lender to it in like funds as such payment is required to be returned by
the Swing Line Lender.
(e) Each Lender's obligation 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 set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the Swing Line Lender, OpCo or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of an Event of Default, (iii) any
adverse change in the condition (financial or otherwise) of OpCo, (iv) any
breach of this Agreement by OpCo or any other 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)(i) OpCo hereby
unconditionally agrees to pay to the Administrative Agent for the account of
each Lender (A) the then unpaid principal amount of each Revolving Credit Loan
of such Lender on the Revolving Credit Termination Date, and (B) in the case of
the Swing Line Lender, the then unpaid principal amount of each Swing Line Loan
on the Revolving Credit Termination Date, and (ii) Newco hereby unconditionally
agrees to pay to the Administrative Agent for the account of each Lender the
principal amount of the Term Loan of such Lender, in equal quarterly payments
from the Closing Date through the Term Loan Maturity Date totaling the amount
set forth in Table 2.8 below, payable on the last day of each March, June,
September and December in accordance with Section 2.16 (or, in the case of each
clause (i) and (ii), the then unpaid principal amount of such Loan, on the date
that such Loan becomes due and payable pursuant to Section 7).
TABLE 2.8
--------------------------------------------------------
Year Amount
--------------------------------------------------------
Year One $10,000,000
--------------------------------------------------------
Year Two $12,000,000
--------------------------------------------------------
Year Three $13,000,000
--------------------------------------------------------
Year Four $15,000,000
--------------------------------------------------------
Year Five $25,000,000
--------------------------------------------------------
Each of the Borrowers 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 2.13. Each such payment shall be made in immediately available
United States Dollars, to the Administrative Agent, on or before 11:00 a.m., New
York City time, on the designated date thereof, without counterclaim or setoff
and free and clear of, and without any deduction or withholding for, any taxes
or other payments.
-22-
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of each of the Borrowers 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 shall maintain the Register pursuant to
Section 9.6(d), and a subaccount therein for each Lender, in which Register
and/or subaccounts shall be recorded (i) the amount of each Revolving Credit
Loan and Term Loan made hereunder, 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 each Borrower to each Lender hereunder and
(iii) both the amount of any sum received by the Administrative Agent hereunder
from any 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 each Borrower therein recorded; 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 any 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 Borrowers acknowledge that (i) OpCo has executed and delivered
to each Lender (A) a promissory note of OpCo evidencing the Revolving Credit
Loans of such Lender, substantially in the form of Exhibit A-1 with appropriate
insertions as to date and principal amount (as amended, supplemented or
otherwise modified from time to time, a "Revolving Credit Note") and (B) in the
case of the Swing Line Lender, a promissory note of OpCo evidencing the Swing
Line Loans of the Swing Line Lender, substantially in the form of Exhibit A-2
with appropriate insertions as to date and principal amount (as amended,
supplemented or otherwise modified from time to time, the "Swing Line Note") and
(ii) Newco has executed and delivered to such Lender a promissory note of Newco
evidencing the Term Loan of such Lender, substantially in the form of Exhibit
A-3 with appropriate insertions as to date and principal amount (as amended,
supplemented or otherwise modified from time to time, a "Term Note").
2.9 Optional Prepayments. Any Borrower may, on the last day of any
Interest Period with respect thereto, in the case of Eurodollar Loans, or at any
time and from time to time, in the case of Base Rate Loans, prepay their
respective Loans, in whole or in part, without premium or penalty, upon at least
three Business Days' irrevocable notice to the Administrative Agent, or, in the
case solely of Swing Line Loans, upon notice by 12:00 noon, New York City time
on the same Business Day to the Swing Line Lender, specifying the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans, Base
Rate Loans or a combination thereof, and whether of Revolving Credit Loans (and
Swing Line Loans, if any), Term Loans, or a combination thereof, and, if of a
combination of any thereof, the amount allocable to each. Upon receipt of any
such notice the Administrative Agent shall promptly notify each Lender thereof.
If any such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with any amounts payable
pursuant to Section
-23-
2.20, 2.21 and, in the case of prepayments of the Term Loans only, accrued
interest to such date on the amount prepaid. Partial prepayments of the Term
Loans shall be applied pro rata to the remaining installments of principal
thereof. Amounts prepaid on account of the Term Loans may not be reborrowed.
Prepayments of Revolving Credit Loans and Swing Line Loans shall be applied
first to all outstanding Swing Line Loans and second to Revolving Credit Loans.
Repayments of Revolving Credit Loans or Term Loans under this Section 2.9 shall
be in an aggregate principal amount of $1,000,000 or a whole multiple thereof;
partial prepayments of Swing Line Loans shall be in an aggregate principal
amount of $500,000 or a whole multiple of $100,000 in excess thereof.
2.10 Mandatory Prepayments. (a) If, subsequent to the Closing Date and
continuing through the second anniversary of the Closing Date, Newco shall make
any payment or other distribution to any stockholder in respect of Newco's
Capital Stock or payment in respect of any redemption or repurchase of its
Capital Stock, other than pursuant to the Merger Agreement, an amount equal to
such payment shall be applied toward the prepayment of the Term Loans as set
forth in Section 2.10(c).
(b) If, subsequent to the Closing Date, either Borrower or any of its
Subsidiaries shall receive Net Proceeds from any Asset Sale (other than in
accordance with Section 6.6(b)), 100% of such Net Proceeds shall be promptly
applied first, toward the prepayment of the Term Loans as set forth in Section
2.10(c) and second, to the prepayment of the Revolving Credit Loans;
notwithstanding the foregoing, such Borrower shall not be required to pay any
Net Proceeds to the Administrative Agent for application to the Term Loans until
such time as such aggregate Net Proceeds received exceeds $1,000,000 and, upon
such payment, Borrowers shall only be required to pay such Net Proceeds to the
Administrative Agent at such time, and from time to time, as such aggregate Net
Proceeds exceeds $1,000,000.
(c) Prepayments made pursuant to this Section 2.10 shall be applied by
the Administrative Agent to the prepayment of the Term Loans (pro rata according
to the outstanding principal amounts thereof held by the respective Lenders).
Prepayments of the Term Loans pursuant to this Section 2.10 shall be applied to
the remaining installments of each Term Loan in the inverse order of their
scheduled maturities. Amounts prepaid on account of the Term Loans may not be
reborrowed.
(d) Each Borrower shall give the Administrative Agent (which shall
promptly notify each Lender) at least one Business Day's notice of each
prepayment or mandatory prepayment pursuant to this Section 2.10 setting forth
the date and amount thereof. Any prepayment of Loans pursuant to this Section
2.10 shall be applied, first, to any such Base Rate Loans then outstanding and
the balance of such prepayment, if any, to any such Eurodollar Loans then
outstanding; provided that prepayments of Eurodollar Loans, if not on the last
day of the Interest Period with respect thereto, shall, at such Borrower's
option be prepaid subject to the provisions of Section 2.20 and 2.21 or the
amount of such prepayment (after application to any Base Rate Loans) shall be
deposited with the Administrative Agent as cash collateral for the Loans on
terms reasonably satisfactory to the Administrative Agent and thereafter shall
be applied in the order of the Interest Periods next ending most closely to the
date such prepayment is required to be made and on the last day of each such
Interest Period. After such application,
-24-
unless an Event of Default shall have occurred and be continuing, any remaining
interest earned on such cash collateral shall be paid to such Borrower.
2.11 Conversion and Continuation Options. (a) Any Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least [three] [two] Business Days' prior irrevocable
notice of such election, provided that any such conversion of Eurodollar Loans
may only be made on the last day of an Interest Period with respect thereto. Any
Borrower may elect to convert Base Rate Loans (other than Swing Line Loans) to
Eurodollar Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable notice of such election. Any such notice of conversion
to Eurodollar Loans shall specify the length of the Interest Periods therefor.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof. All or any part of outstanding Eurodollar Loans and Base
Rate Loans (other than Swing Line Loans) may be converted as provided herein,
provided that (i) no Loan may be converted into a Eurodollar Loan when any Event
of Default has occurred and is continuing and the Administrative Agent has or
the Required Lenders have determined that such a conversion is not appropriate
and (ii) no Loan may be converted into a Eurodollar Loan after the date that is
one month prior to the Revolving Credit Termination Date, in the case of
conversions of Revolving Credit Loans, or the Term Loan Maturity Date, in the
case of conversions of Term Loans.
(b) Any Eurodollar Loan may be continued as such upon the expiration of
the then current Interest Period with respect thereto by any Borrower giving
notice to the Administrative Agent, in accordance with the applicable provisions
of the term "Interest Period" set forth in Section 1.1, which shall specify the
length of the next Interest Period to be applicable to such Loans, provided that
no Eurodollar Loan may be continued as such (i) when any Event of Default has
occurred and is continuing and the Administrative Agent has or the Required
Lenders have determined that such a continuation is not appropriate or (ii)
after the date that is one month prior to the Revolving Credit Termination Date,
in the case of continuations of Revolving Credit Loans or the date of the Term
Loan Maturity Date, in the case of continuations of Term Loans and provided,
further, that if any Borrower shall fail to give such notice or if such
continuation is not permitted such Loans shall be automatically converted to
Base Rate Loans on the last day of such then expiring Interest Period.
2.12 Maximum Number of Eurodollar Loans. In no event shall there be
more than nine (9) Eurodollar Loans outstanding at any time.
2.13 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) If all or a portion of (i) any principal of any Loan, (ii) any
interest payable thereon, (iii) any commitment fee or (iv) any other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the
-25-
Loans and any such overdue interest, commitment fee or other amount shall bear
interest at a rate per annum which is (x) in the case of principal, the rate
that would otherwise be applicable thereto pursuant to the foregoing provisions
of this Section 2.13(b) plus 2% or (y) in the case of any such overdue interest,
commitment fee or other amount, the rate described in Section 2.13(b) plus 2%,
in each case from the date of such non-payment until such overdue principal,
interest, commitment fee or other 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 Section 2.13(c) shall be payable
from time to time on demand.
2.14 Computation of Interest and Fees. (a) Fees and, whenever it is
calculated on the basis of the Prime Rate, interest shall be calculated on the
basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed; and, otherwise, interest shall be calculated on the basis of a 360-day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify each Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the 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 each
Borrower and the 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
each Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall notify the Borrowers of the Eurodollar Rate used by
the Administrative Agent in determining any interest rate pursuant to Section
2.13(a).
2.15 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon each Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders 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
each Borrower and the Lenders as soon as practicable thereafter. If such notice
is given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be converted to or continued as Base Rate Loans and (z) any outstanding
-26-
Eurodollar Loans 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 shall be made or continued as such, nor shall
any Borrower have the right to convert Loans to Eurodollar Loans.
2.16 Pro Rata Treatment and Payments. (a) Each borrowing by either
Borrower from the Lenders hereunder (other than Swing Line Loans), each payment
by either Borrower on account of any commitment fee hereunder and any reduction
of the Commitments of the Lenders shall be made pro rata according to the
respective Commitment Percentages of the Lenders. Each optional prepayment by
either Borrower of the Revolving Credit Loans or the Term Loans shall be made
pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans or the Term Loans, as the case may be, then held by the
respective Lenders. Each payment (other than optional prepayments) by or on
behalf of either Borrower (including any application of proceeds of collateral)
on account of the principal of or interest on the Loans shall be made pro rata
according to the respective amounts of such principal or interest then due and
owing. All payments (including prepayments) to be made by either Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without set off or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Administrative Agent's office specified in
Section 9.2, 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 becomes due and payable on a
day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, unless the result of such extension would be to cause
such payment to be made in the succeeding calendar months, in which event such
payment shall be due and payable on the immediately preceding Business Day, and,
with respect to payments of principal and interest thereon shall be payable at
the then applicable rate during such extension.
(b) 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 Commitment Percentage 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, in reliance upon such assumption, make available to
the relevant 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 Section
shall be conclusive in the absence of manifest error. If such Lender's
Commitment Percentage 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
hereunder, on demand, from such Borrower.
-27-
2.17 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, each Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.20 or 2.21.
2.18 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 Note or any
Eurodollar Loan made by it or the issuance of a Letter of
Credit by the Issuing Lender, or change the basis of taxation
of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.19 and changes in the
rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by,
any office of such Lender which is not otherwise included in
the determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender and the Administrative Agent deems to be
material, of making, converting into, continuing or maintaining Eurodollar Loans
or of issuing and maintaining Letters of Credit or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, each Borrower
shall promptly pay such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduced amount receivable.
(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 to a level below that which such Lender
or such corporation could have achieved but
-28-
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, each Borrower
shall promptly pay to such Lender and the Administrative Agent 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, it shall promptly notify the relevant Borrower (with a
copy to the Administrative Agent) of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender to either Borrower (with a copy to the
Administrative Agent) shall be conclusive 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.
2.19 Taxes. (a) All payments made by either Borrower under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent or any Lender
as a result of a present or former connection between the Administrative Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under any Note,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that such Borrower shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of Section 2.19(b). Whenever any Non-Excluded Taxes
are payable by either Borrower, as promptly as possible thereafter such Borrower
shall send to the Administrative Agent for its own account or for the account of
such Lender, as the case may be, a certified copy of an original official
receipt received by such Borrower showing payment thereof. If either Borrower
fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority
or fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, such Borrower shall indemnify the Administrative
Agent and the Lenders for any incremental taxes, interest or penalties that may
become payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
-29-
(b) Each Lender that is not incorporated or organized under the laws of
the United States of America, any state thereof or the District of Columbia
shall:
(i) deliver to each Borrower and the Administrative
Agent on or before the date on which it becomes a
Lender either (A) two properly completed and duly
executed copies of United States Internal Revenue
Service Form 1001 or 4224 (or successor applicable
form, as the case may be) claiming complete exemption
from United States withholding tax with respect to
payments by any Borrower under this Agreement or (B)
in the case of a Lender claiming exemption from
United States withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of
"portfolio interest" by either Borrower under this
Agreement, a properly completed and duly executed
United States Internal Revenue Service Form W-8 (or
successor applicable form, as the case may be) and an
annual certificate representing that such Lender is
not a bank for purposes of Section 881(c) of the
Code, is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and 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, is
not a 10-percent shareholder of either Borrower
within the meaning of Section 881(c)(3)(B) of the
Code and is not a controlled foreign corporation
receiving interest from a related person within the
meaning of Section 881(c)(3)(C) of the Code;
(ii) deliver to each Borrower and the Administrative
Agent two further copies of any such form or
certification on or before the date that any such
form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change
in the most recent form previously delivered; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may
reasonably be requested by either Borrower or the
Administrative Agent;
provided, however, that such Lender shall not be required to perform the
obligations under this Section 2.19(b) if an event (including, without
limitation, any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender so advises each
Borrower and the Administrative Agent.
2.20 Indemnity. The Borrowers agree, jointly and severally, to
indemnify each Lender and to hold each Lender harmless from any loss or expense
which such Lender may sustain or incur as a consequence of (a) default by either
Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after such Borrower has given a notice
-30-
requesting the same in accordance with the provisions of this Agreement, (b)
default by any Borrower in making any prepayment after such Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment or payment 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 Bank on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. This covenant shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
2.21 Fees. Each Borrower hereby agrees to pay to the Administrative
Agent such fees on such dates as may from time to time be agreed to by such
parties in writing.
2.22 Letters of Credit.
(a) The Issuing Lender will, from time to time until the Revolving
Credit Termination Date, upon receipt of duly executed Applications and such
other documents, instruments and/or agreements as the Issuing Lender may
require, issue or amend Letters of Credit on such terms as are satisfactory to
the Issuing Lender, provided, however that the Issuing Lender shall not issue
any Letter of Credit (A) at any time if, after giving effect to such Letter of
Credit, the Letter of Credit Obligations would exceed the lesser of (i)
$5,000,000 or (ii) the aggregate amount of Revolving Credit Commitments minus
the sum of (w) the Letter of Credit Obligations, (x) the outstanding principal
balance of the Revolving Credit Loans and (y) the outstanding principal balance
of the Swing Line Loans, and (B) with an expiry date (i) more than one year from
its issuance or (ii) subsequent to a date 30 days prior to the Revolving Credit
Termination Date.
(b) OpCo agrees to reimburse the Administrative Agent for the
account of the Issuing Lender, on demand, for each such payment made by the
Issuing Lender under or pursuant to any Letter of Credit or L/C Draft. OpCo
further agrees to pay to the Administrative Agent for the account of the Issuing
Lender, on demand, interest at the rate set forth in Section 2.13 applicable to
Base Rate Loans on any amount paid by the Issuing Lender under or pursuant to
any Letter of Credit or L/C Draft from the date of payment until the date of
reimbursement to the Issuing Lender.
(c) OpCo's obligation to reimburse the Administrative Agent for
the account of the Issuing Lender for payments and disbursements made by the
Issuing Lender under any Letter of Credit shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which OpCo may have or have had against the Issuing Lender
(or any other Lender), including, without limitation, any defense based
-31-
on the failure of the demand for payment under such Letter of Credit to conform
to the terms of such Letter of Credit, the legality, validity, regularity or
enforceability of such Letter of Credit, or the identity of the transferee of
such Letter of Credit or the sufficiency of any transfer of such Letter of
Credit is transferable; provided, however, that OpCo shall not be obligated to
reimburse the Administrative Agent for the account of the Issuing Lender for any
wrongful payment or disbursement made under any Letter of Credit as a result of
acts or omissions constituting gross negligence or willful misconduct on the
part of the Issuing Lender or any of its officers, employees or agents.
(d) Notwithstanding anything to the contrary herein or in any
Application, upon the occurrence of an Event of Default, an amount equal to the
aggregate amount of the outstanding Letter of Credit Obligations shall, at the
Issuing Lender's option and without demand upon or further notice to OpCo, be
deemed (as between the Issuing Lender and OpCo) to have been paid or disbursed
by the Issuing Lender under the Letters of Credit issued and L/C Drafts accepted
by the Issuing Lender (notwithstanding that such amounts may not in fact have
been so paid or disbursed), and a Revolving Credit Loan, which shall be a Base
Rate Loan, to OpCo in the amount of such Letter of Credit Obligations to have
been made and accepted by OpCo, which Loan shall be immediately due and payable.
(e) With respect to each Letter of Credit, each Lender (other than the
Issuing Lender) hereby irrevocably and unconditionally agrees that it shall be
deemed to have purchased and received from the Issuing Lender, without recourse
or warranty an undivided interest in such Letter of Credit, effective
simultaneously with the issuance thereof, in an amount equal to such Lender's
Commitment Percentage of such Letter of Credit. For the purposes of this
Agreement, the proportionate interest which the Issuing Lender retains in each
Letter of Credit shall be referred to as its "participation" in such Letter of
Credit.
(f) If the Issuing Lender shall fail to be reimbursed pursuant to
subsections (b) or (d) above by OpCo for any payment or disbursement under a
Letter of Credit or L/C Draft, each other Lender shall, promptly upon request of
the Issuing Lender, make a Revolving Credit Loan, which shall be a Base Rate
Loan in an amount equal to such Lender's Commitment Percentage of such payment
or disbursement. If the Administrative Agent or the Issuing Lender subsequently
receives from OpCo any reimbursement of such payment or disbursement, the
Administrative Agent or the Issuing Lender, as the case may be, shall promptly
remit to each Lender its Commitment Percentage of such reimbursement. All
interest payments received by the Issuing Lender or the Administrative Agent on
account of reimbursements under this Agreement shall be promptly distributed by
the Issuing Lender or the Administrative Agent, as the case may be, to the other
Lenders pro rata according to their respective Commitment Percentages (except to
the extent that the Issuing Lender was not promptly reimbursed by any such
Lender).
(g) The obligation of each Lender to provide the Administrative Agent
with such Lender's pro rata share of the amount of any payment or disbursement
made by the Issuing Lender under any outstanding Letter of Credit or L/C Draft
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or
-32-
defense to payment which such Lender may have or have had against the Issuing
Lender (or any other Lender), including, without limitation, any defense based
on the failure of the demand for payment under such Letter of Credit to conform
to the terms of such Letter of Credit, the legality, validity, regularity or
enforceability of such Letter of Credit, or the identity of the transferee of
such Letter of Credit or the sufficiency of any transfer if such Letter of
Credit is transferable; provided, however, that the Lenders shall not be
obligated to reimburse the Issuing Lender for any wrongful payment or
disbursement made under any Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct on the part of the Issuing
Lender or any of its officers, employees or agents.
(h) In determining whether to make any payment under or pursuant to any
Letter of Credit or any related L/C Draft, the Issuing Lender shall have no
obligation to OpCo, any Lender or any other Person other than to confirm that
any documents required to be delivered have been delivered and that such
documents comply on their face with the requirements of such Letter of Credit.
No action taken or omitted by the Issuing Lender under or in connection with any
Letter of Credit or L/C Draft, if taken or omitted in the absence of gross
negligence or willful misconduct, shall put the Issuing Lender under any
resulting liability to OpCo or any Lender.
SECTION 30. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans, and to induce the Issuing Lender to issue
Letters of Credit, each Borrower hereby represents and warrants, jointly and
severally, to the Administrative Agent, the Issuing Lender and each Lender that:
3.1 Financial Condition. The consolidated balance sheet of the Parent
and its consolidated Subsidiaries as at December 31, 1998 and the related
consolidated statements of income and of cash flows for the fiscal year ended on
such date, reported on by PricewaterhouseCoopers LLP and certified by the chief
financial officer of the Parent, copies of which have heretofore been furnished
to each Lender, are complete and correct and present fairly the consolidated
financial condition of the Parent and its consolidated Subsidiaries as at such
date, and the consolidated results of their operations and their consolidated
cash flows for the fiscal year then ended. All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or chief financial officer, as the case
may be, and as disclosed therein). Except as set forth on Schedule 3.1(a),
neither the Parent nor any of its consolidated Subsidiaries had, at the date of
the most recent balance sheet referred to above, any
-33-
material Guarantee Obligation, contingent liability or liability for taxes, or
any long-term lease or unusual forward or long-term commitment, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction, which is not reflected in the foregoing statements or in the notes
thereto. Except as contemplated by the Merger Agreement, during the period from
December 31, 1998 to and including the date hereof, there has been no sale,
transfer or other disposition by the Parent or any of its consolidated
Subsidiaries of any material part of its business or property and no purchase or
other acquisition of any business or property (including any Capital Stock of
any other Person) material in relation to the consolidated financial condition
of the Parent and its consolidated Subsidiaries at December 31, 1998, other than
the sale of inventory in the ordinary course of business.
3.2 No Change. Since December 31, 1998 there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.
3.3 Corporate Existence; Compliance with Law. Each Credit Party is (a)
validly existing and in good standing under the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal right, to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations. Each
Credit Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents and each Interest Rate Hedge
Agreement to which it is a party and to borrow hereunder and has taken all
necessary corporate action to authorize the borrowings on the terms and
conditions of this Agreement and any Notes and to authorize the execution,
delivery and performance of the Loan Documents and each Interest Rate Hedge
Agreement to which it is a party. 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 borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of the Loan
Documents and the Interest Rate Hedge Agreements. This Agreement has been, and
each other Loan Document and each Interest Rate Hedge Agreement to which it is a
party will be, duly executed and delivered on behalf of each Credit Party that
is a party hereto or thereto. This Agreement constitutes, and each other Loan
Document and each Interest Rate Hedge Agreement to which it is a party when
executed and delivered will constitute, a legal, valid and binding obligation of
each Credit Party that is a party hereto or thereto enforceable against such
Credit Party 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.
3.5 No Legal Bar. The execution, delivery and performance of the Loan
Documents and the Interest Rate Hedge Agreements, the borrowings hereunder and
the use of the proceeds thereof will not violate any Requirement of Law or
Contractual Obligation of any Credit Party or of any of its Subsidiaries and
will not result in, or require, the creation or imposition of any Lien, other
than the Liens created pursuant to the Loan Documents, on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation.
-34-
3.6 No Material Litigation. Except as set forth on Schedule 3.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Credit Parties,
threatened by or against any Credit Party or any of its Subsidiaries or against
any of its or their respective properties or revenues (a) with respect to any of
the Loan Documents or the Interest Rate Hedge Agreements or any of the
transactions contemplated hereby or thereby, (b) with respect to the Stock
Repurchase Agreement, any related document or any of the transactions
contemplated thereby, or (c) which could reasonably be expected to have a
Material Adverse Effect.
3.7 No Default. None of the Credit Parties or any of their 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.
3.8 Ownership of Property; Liens. Each of the Credit Parties and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by Section 6.3. With respect to real
property or interests in real property, as of the Closing Date, each Borrower
has (i) fee title to all of the real property listed on Schedule 3.8 under the
heading "Fee Properties" (each, a "Fee Property"), and (ii) good and valid title
to the leasehold estates in all of the real property leased by it and listed on
Schedule 3.8 under the heading "Leased Properties" (each, a "Leased Property"),
in each case free and clear of all mortgages, liens, security interests,
easements, covenants, rights-of-way and other similar restrictions of any nature
whatsoever, except (A) Liens permitted pursuant to Section 6.3, (B) as to Leased
Property, the terms and provisions of the respective lease therefor and any
matters affecting the fee title and any estate superior to the leasehold estate
related thereto, and (C) title defects, or leases or subleases granted to
others, which are not material to the Fee Properties or the Leased Properties,
as the case may be, taken as a whole. The Fee Properties and the Leased
Properties constitute, as of the Closing Date, all of the real property owned in
fee or leased by each of the Borrowers and its Subsidiaries.
3.9 Intellectual Property. Each Credit Party and each of its
Subsidiaries owns, or is licensed to use or otherwise has the right to use, all
trademarks, tradenames, copyrights, patents, trade secrets and other proprietary
information that it uses in the conduct of its business as currently conducted
except for those the failure to own or license which could not reasonably be
expected to have a Material Adverse Effect (the "Intellectual Property"). To the
knowledge of each Credit Party, no claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or enforceability of any such Intellectual Property, nor does any
Credit Party know of any valid basis for any such claim. The use of such
Intellectual Property by each Credit Party and its Subsidiaries does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
3.10 No Burdensome Restrictions. No Contractual Obligation of any
Credit Party or any of its Subsidiaries could reasonably be expected to have a
Material Adverse Effect.
-35-
3.11 Taxes. Each Credit Party and each of its Subsidiaries has filed or
caused to be filed all material tax returns (or has received timely extensions
for such filings) which are required to be filed and has paid all taxes shown to
be due and payable on said returns or on any assessments made against it or any
of its property and all other taxes, fees or other charges imposed on it or any
of its property by any Governmental Authority (other than any 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 such Credit Party or its Subsidiaries, as the case may
be); no tax Lien has been filed, and, to the knowledge of the Credit Parties, no
claim is being asserted, with respect to any such tax, fee or other charge.
3.12 Federal Regulations. Except as more fully set forth in the Merger
Agreement with respect to payment of the Class A Consideration, no part of the
proceeds of any Loans will be used for "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation G or Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect. If requested by any
Lender or the Administrative Agent, the Borrowers will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-1 or FR Form U-1 referred to in
said Regulation G or Regulation U, as the case may be.
3.13 ERISA. Except as set forth in Schedule 3.13, 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 more than $3,000,000. Neither
the Borrowers nor any Commonly Controlled Entity has any liability in respect of
any Multiemployer Plan.
3.14 Investment Company Act; Other Regulations. No Credit Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No
Borrower is subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
3.15 Subsidiaries. (a) Prior to the date of this Agreement, the only
Subsidiaries of the Parent are as set forth in Schedule 3.15(a); and (b)
Schedule 3.15(b) contains a complete and accurate list of each Subsidiary of
either of the Borrowers after giving effect to the Merger.
3.16 Purpose of Loans. The proceeds of the Loans will be used as
follows: (a) the proceeds of the Revolving Credit Loans and any Swing Line Loans
shall be used by OpCo (i)
-36-
to refinance the Existing Indebtedness, (ii) to finance working capital and
capital expenditures and (iii) for general corporate purposes; and (b) the
proceeds of the Term Loans will be used by Newco (i) to pay the Merger
Consideration, (ii) to establish the Dissenting Shareholder Reserve, and (iii)
to fund the OpCo Contribution, as more fully set forth in Section 5.13.
3.17 Environmental Matters. Except to the extent that all of the
following, taken together, could not reasonably be expected to result in a
Material Adverse Effect or to result in the payment of a Material Environmental
Amount:
(a) The facilities and properties owned, leased or operated by
each Credit Party or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations which (i) constitute
or constituted a violation of, or (ii) could reasonably be expected to
give rise to liability under, any Environmental Law.
(b) The Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, in all
material respects with all applicable Environmental Laws, and there is
no contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business
operated by any Credit Party or any of its Subsidiaries (the
"Business") which could materially interfere with the continued
operation of the Properties or materially impair the fair saleable
value thereof.
(c) Neither any Credit Party nor any of its Subsidiaries has
received any 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 any Credit Party have knowledge or reason to
believe that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a
manner or to a location which could reasonably be expected to give rise
to liability under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of
at, on or under any of the Properties or elsewhere in violation of, or
in a manner that could reasonably be expected to give rise to liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Credit Parties,
threatened, under any Environmental Law to which any Credit Party or
any Subsidiary thereof 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.
-37-
(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 any Credit Party or any
Subsidiary thereof in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a
manner that could reasonably give rise to liability under Environmental
Laws.
3.18 Solvency. Each Credit Party is, and after giving effect to the
consummation of the Merger and to the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith will be and will
continue to be solvent.
3.19 Security Documents. (a) Each Pledge 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 (as such term
is defined in such Pledge Agreement) and proceeds thereof and, after
satisfaction of the conditions specified in Section 4.1(t), such Pledge
Agreement shall at all times constitute a fully perfected first priority Lien
on, and security interest in, all right, title and interest of the Pledgors in
such Collateral and the proceeds thereof, as security for the Secured
Obligations (as such terms are defined in such Pledge Agreement), in each case
prior and superior in right to any other Person.
(b) Each Security 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, and as defined,
therein and proceeds thereof, and, after financing statements in appropriate
form are filed in the offices specified on Schedule __ to such Security
Agreement, each Security Agreement shall at all times constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Credit Parties in such Collateral and the proceeds thereof, as security for
the Secured Obligations (as defined in such Security Agreement), in each case
prior and superior in right to any other Person, other than with respect to
Liens expressly permitted by Section 6.3.
(c) Each Mortgage 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 upon filing the Mortgages in
the jurisdictions listed on Schedule 3.19(c), such security interests will
constitute first priority, perfected liens on, and security interests in, all
right, title and interest of the debtor party thereto in the collateral
described therein.
3.20 Regulation H. No Mortgage encumbers improved real property (other
than the Wheeling, West Virginia 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.
3.21 Accuracy of Information. No statement or information contained in
this Agreement, any other Loan Document or the Interest Rate Hedge Agreements or
any other document, certificate or statement furnished in writing to the
Administrative Agent or the Lenders or any of them, by or on behalf of any
Credit Party for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents or the Interest Rate Hedge Agreements,
contained as of the date such statement, information, document or certificate
-38-
was so furnished any untrue statement of any fact material to the interests of
the Administrative Agent or any Lender, or omitted to state a fact necessary in
order to make the statements contained herein or therein not misleading in any
respect material to the interests of the Administrative Agent or any Lender.
There is no fact known to any Credit 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 Interest Rate Hedge Agreements or in such 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 and the Interest Rate Hedge Agreements.
3.22 Year 2000 Compliance. Each of the Credit Parties has: (a) reviewed
the areas within its business and operations which could be adversely affected
by failure to become "Year 2000 Compliant", that is the computer applications,
imbedded microchips and other systems used by each Credit Party or its material
vendors will be able properly to recognize and perform date sensitive functions
involving certain dates prior to and any date after December 31, 1999; (b)
developed a detailed plan and timetable to become Year 2000 Compliant in a
timely manner; and (c) committed adequate resources to support its Year 2000
plan. Based on such review and plan, each of the Credit Parties reasonably
believes that it will become Year 2000 Compliant on a timely basis except to the
extent that a failure to do so will not have a Material Adverse Effect. Except
for such of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of each Borrower and
their Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient to permit each
Borrower and their Subsidiaries to conduct their business without a Material
Adverse Effect.
SECTION 40. CONDITIONS PRECEDENT
4.1 Conditions to Initial Loans. The agreement of each Lender to make
the initial Loans requested to be made by it, and for the Issuing Lender to
issue any Letter of Credit, is subject to the satisfaction, immediately prior to
or concurrently with the making of such Loans or the issuance of such Letters of
Credit, on the Closing Date, of the following conditions precedent on or before
June ___, 1999:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of each Borrower, the Parent, Newco and each of the
other Credit Parties which is a party hereto, with a counterpart for
each Lender, (ii) each of the Pledge Agreements, each executed and
delivered by a duly authorized officer of the party thereto, with a
counterpart or a conformed copy for each Lender, (iii) the Guarantees,
executed and delivered by a duly authorized officer of each party
thereto, with a counterpart or a conformed copy for each Lender, (iv)
each of the Security Agreements, each executed and delivered by a duly
authorized officer of the party thereto, with a counterpart or a
conformed copy for each Lender and (v) a Mortgage for each Fee Property
and the Wheeling, West Virginia leasehold, each executed and delivered
by a duly authorized officer of the party thereto, with a counterpart
or a conformed copy for each Lender.
-39-
(b) Related Agreements. The Administrative Agent shall have received,
with a copy for each Lender, true and correct copies, certified as to
authenticity by each Borrower, of the Merger Agreement and such other documents
or instruments as may be reasonably requested by the Administrative Agent,
including, without limitation, a copy of any debt instrument, security agreement
or other material contract to which any Credit Party may be a party.
(c) Borrowing Certificates. The Administrative Agent shall have
received, with a copy for each Lender, a certificate of each Borrower, dated the
Closing Date, substantially in the form of Exhibit F with appropriate insertions
and attachments, satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or any
Assistant Secretary of each Borrower.
(d) Corporate Proceedings of the Borrowers. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Administrative Agent, of
the Board of Directors of each Borrower authorizing (i) the execution, delivery
and performance of this Agreement and the other Loan Documents and the Interest
Rate Hedge Agreements to which it is a party, (ii) the borrowings contemplated
hereunder and (iii) the granting by it of the Liens created pursuant to the
Borrower Security Documents, certified by the Secretary or an Assistant
Secretary of such Borrower as of the Closing Date, which certificate shall be in
form and substance satisfactory to the Administrative Agent and shall state that
the resolutions thereby certified have not been amended, modified, revoked or
rescinded.
(e) Borrower Incumbency Certificate. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of each
Borrower, dated the Closing Date, as to the incumbency and signature of the
officers of such Borrower executing any Loan Document and any Interest Rate
Hedge Agreement satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or any
Assistant Secretary of such Borrower.
(f) Corporate Proceedings of the Parent. The Administrative Agent shall
have received, with a counterpart for each Lender, copies of the resolutions, in
form and substance satisfactory to the Administrative Agent, of the Board of
Directors of the Parent authorizing the execution, delivery and performance of
the Loan Documents and the Interest Rate Hedge Agreements to which the Parent is
a party, certified by the Secretary or an Assistant Secretary of the Parent as
of the Closing Date, which certificate shall be in form and substance
satisfactory to the Administrative Agent and shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded.
(g) Parent Incumbency Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the Parent, dated
the Closing Date, as to the incumbency and signature of the officers of the
Parent executing any Loan Document or any Interest Rate Hedge Agreements
satisfactory in form and substance to the Administrative Agent, executed by the
President or any Vice President and the Secretary or any Assistant Secretary of
the Parent.
-40-
(h) Corporate Proceedings of Subsidiaries. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Administrative Agent, of
the Board of Directors of each Subsidiary of the Borrowers which is a party to a
Loan Document or an Interest Rate Hedge Agreement authorizing (i) the execution,
delivery and performance of the Loan Documents and the Interest Rate Hedge
Agreement to which it is a party and (ii) the granting by it of the Liens
created pursuant to the Subsidiaries Security Documents to which it is a party,
certified by the Secretary or an Assistant Secretary of each such Subsidiary as
of the Closing Date, which certificate shall be in form and substance
satisfactory to the Administrative Agent and shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded.
(i) Subsidiary Incumbency Certificates. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of each
Subsidiary of the Borrowers which is a Credit Party, dated the Closing Date, as
to the incumbency and signature of the officers of such Subsidiaries executing
any Loan Document or any Interest Rate Hedge Agreement, satisfactory in form and
substance to the Administrative Agent, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of each such Subsidiary.
(j) Corporate Documents. The Administrative Agent shall have received,
with a counterpart for each Lender, true and complete copies of the certificate
of incorporation and by-laws of each Credit Party, certified as of the Closing
Date as complete and correct copies thereof by the Secretary or an Assistant
Secretary of such Credit Party.
(k) Termination of Existing Credit Agreement. OpCo shall have
terminated its right to receive, and satisfied in full all, "Loans" under the
Existing Credit Agreement.
(l) Fees. The Arranger, the Syndication Agent, the Documentation Agent,
the Managing Agent, and the Administrative Agent and the Lenders shall have
received all invoiced fees and expenses, including without limitation, the
Ticking Fee, required to be paid on the Closing Date.
(m) Legal Opinions. The Administrative Agent shall have received, with
a counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinion of Xxxxxxxx Xxxxxxxx
Xxxxx & Xxxxx LLP, counsel to the Borrowers and the other
Credit Parties, substantially in the form of Exhibit G-1;
(ii) the executed legal opinions of the following local
counsel of the Borrower and the other Credit Parties: (A)
Xxxxxxx Breed Xxxxxx & Xxxxxx, (B) Bowles, Rice, XxXxxxx,
Xxxxx & Love, (C) Xxxxx Xxxxxx & Xxxxx, (D) Xxxxxxx and
Xxxxxxxx, and (E) Brennan, Steil, Basting & XxxXxxxxxx,
substantially in the form of Exhibit G-2; and
-41-
(iii) any executed legal opinions delivered to any
Credit Party or Buyer in connection with the Merger,
accompanied by reliance letters in favor of the Administrative
Agent and the Lenders; and
each such legal opinion to cover such other matters incident to the transactions
contemplated by this Agreement as the Administrative Agent may reasonably
require.
(n) Third-Party Consents. All governmental and third party approvals
(including landlords and other consents) necessary or advisable in connection
with the Merger, the making of the initial Loans and the continuing operations
of each of the Borrowers and its Subsidiaries shall have been obtained and be in
full force and effect, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose materially adverse conditions on the
Merger or the making of the initial Loans.
(o) Financial Statements. The Administrative Agent shall have received,
with a copy for each Lender, (i) audited consolidated financial statements of
the Parent and its consolidated Subsidiaries for the three most recent fiscal
years ended prior to the Closing Date, and (ii) unaudited interim consolidated
financial statements of the Parent and its consolidated Subsidiaries for each
fiscal quarter ended subsequent to the date of the latest financial statements
delivered pursuant to clause (i) of this subsection as to which such financial
statements are available, reasonably satisfactory to the Lenders and certified
by the chief financial officer of the Parent, all such financial statements,
including the related schedules and notes thereto, having been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or chief financial officer, as the case
may be, and as disclosed therein).
(p) Business Plan. The Administrative Agent shall have received, with a
copy for each Lender, a business plan for fiscal years 1999 - 2004 reasonably
satisfactory to the Lenders.
(q) Solvency Certificate. The Administrative Agent shall have received
the executed Solvency Certificate, substantially in the form of Exhibit H.
(r) Environmental Audit. The Administrative Agent shall have received,
with a counterpart for each Lender, Phase I Environmental Site Assessment
Reports, reasonably satisfactory to the Administrative Agent and the Lenders
with respect to the real property owned or leased by the Borrowers and their
Subsidiaries from a firm reasonably satisfactory to the Administrative Agent and
the Lenders.
(s) Other Conditions. All the representations contained in Section 3
hereof shall remain true and correct in all respects and no event has occurred
or is pending or threatened which has resulted in or could result in through the
passage of time a Material Adverse Effect.
-42-
(t) Pledged Stock and Notes; Stock Powers. The Administrative Agent
shall have received the certificates representing the shares pledged pursuant to
each of the Stock Pledge Agreements, together with an undated stock power for
each such certificate executed in blank by a duly authorized officer of the
pledgor thereof, and the Wheeling Bonds pledged pursuant to the Subsidiaries
Note Pledge Agreement, endorsed in blank by a duly authorized officer of the
pledgor thereof.
(u) Actions to Perfect Liens. The Administrative Agent shall have
received evidence in form and substance satisfactory to it that all filings,
recordings, registrations and other actions, including, without limitation, the
filing of duly executed financing statements on form UCC-1, necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Liens created by
the Security Documents shall have been completed.
(v) Lien Searches. The Administrative Agent shall have received the
results of a recent search by a Person satisfactory to the Administrative Agent,
of the Uniform Commercial Code, judgment and tax lien filings which may have
been filed with respect to personal property of each of the Borrowers and its
Subsidiaries and the Parent and Newco in each of the jurisdictions and offices
where assets of each such Person is located or recorded, and such search shall
reveal no material liens on any of the assets of any such Person except for
liens permitted by the Loan Documents.
(w) Surveys. The Administrative Agent shall have received, and the
title insurance company issuing the policy referred to in Section 4.1(x) (the
"Title Insurance Company") shall have received, maps or plats of an as-built
survey of the sites of the property covered by each mortgage certified to the
Administrative Agent and the Title Insurance Company in a manner satisfactory to
them, dated a date satisfactory to the Administrative Agent and the Title
Insurance Company by an independent professional licensed land surveyor
satisfactory to the Administrative Agent and the Title Insurance Company, which
maps or plats and the surveys on which they are 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: (i) the locations on such sites of all the
buildings, structures and other improvements and the established building
setback lines; (ii) the lines of streets abutting the sites and width thereof;
(iii) all access and other easements appurtenant to the sites or necessary or
desirable to use the sites; (iv) 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; (v) any encroachments on any adjoining property
by the building structures and improvements on the sites; and (vi) if the site
is described as being on a filed map, a legend relating the survey to said map.
(x) Title Insurance Policy. The Administrative Agent shall have
received in respect of each parcel covered by each Mortgage a mortgagee's title
policy (or policies) or
-43-
marked up unconditional binder for such insurance dated the Closing Date. Each
such policy shall: (i) be in an amount satisfactory to the Administrative Agent;
(ii) be issued at ordinary rates; (iii) insure that the Mortgage insured thereby
creates a valid first Lien on such parcel free and clear of all defects and
encumbrances, except such as may be approved by the Administrative Agent; (iv)
name the Administrative Agent for the benefit of the Lenders as the insured
thereunder; (v) be in the form of ALTA Loan Policy 1970 (Amended 10/17/70); (vi)
contain such endorsements and affirmative coverage as the Administrative Agent
may request and (vii) be issued by title companies satisfactory to the
Administrative Agent (including any such title companies acting as co-insurers
or reinsurers, at the option of the Administrative Agent). The Administrative
Agent shall have received evidence satisfactory to it that all premiums in
respect of each such policy, and all charges for mortgage recording tax, if any,
have been paid.
(y) Flood Insurance. If requested by the Administrative Agent, the
Administrative Agent shall have received (i) a policy of flood insurance which
(A) covers any parcel of improved real property which is encumbered by any
mortgage, (B) 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 Act, whichever is
less, and (C) has a term ending not later than the maturity of the indebtedness
secured by such mortgage and (ii) confirmation that each Borrower has received
the notice required pursuant to Section 208(e)(3) of Regulation H of the Board
of Governors of the Federal Reserve System.
(z) Copies of Documents. The Administrative 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 Section 4.1(x) and a copy, certified
by such parties as the Administrative Agent may deem appropriate, of all other
documents affecting the property covered by each Mortgage.
(aa) Maximum Total Leverage Ratio. The Borrowers shall deliver to the
Administrative Agent, in form and substance satisfactory to the Administrative
Agent, evidence that the Total Leverage Ratio of the Borrowers, on a
consolidated and pro forma basis, after giving effect to the borrowings on the
Closing Date, shall not exceed 2.65 to 1.00.
(bb) Merger Documents. The Merger Agreement and all other documentation
in connection therewith shall have been duly executed and delivered by the
parties thereto.
(cc) Consummation of Merger. The Merger shall have been consummated for
an aggregate effective cost equal to the Merger Consideration pursuant to the
Merger Agreement and other satisfactory documentation, and no material provision
thereof shall have been waived, amended, supplemented or otherwise modified.
-44-
4.2 Conditions to Each Loan. The agreement of each Lender to make any
Loan requested to be made by it on any date (including, without limitation, its
initial Loan) is subject to the satisfaction of the following conditions
precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by each Credit Party in or pursuant
to the Loan Documents and the Interest Rate Hedge Agreements shall be
true and correct in all material respects 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
Loans requested to be made on such date.
(c) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement, the other Loan
Documents and the Interest Rate Hedge Agreements and the Merger
Agreement shall be satisfactory in form and substance to the
Administrative Agent, and the Administrative Agent shall have received
such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it
shall reasonably request.
Each borrowing by either Borrower hereunder shall constitute a representation
and warranty by such Borrower as of the date thereof that the conditions
contained in this Section have been satisfied.
SECTION 50. AFFIRMATIVE COVENANTS
Each of the Parent and the Borrowers hereby agrees, jointly and
severally, that, so long as the Commitments remain in effect or any amount is
owing to any Lender or the Administrative Agent hereunder or under any other
Loan Document or under any Interest Rate Hedge Agreement, it shall and (except
in the case of delivery of financial information, reports and notices) shall
cause each of its Subsidiaries to:
5.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of Newco, copies of the consolidated
balance sheet of Newco and its consolidated Subsidiaries and the
consolidating balance sheets of Newco and OpCo as at the end of such
year and the related consolidated and consolidating statements of
income and retained earnings and of cash flows for such year, setting
forth in each case in comparative form the figures for the previous
year, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
PricewaterhouseCoopers LLP or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of Newco, the unaudited
-45-
consolidated balance sheet of Newco and its consolidated Subsidiaries
and the consolidating balance sheets of Newco and OpCo as at the end of
such quarter and the related unaudited consolidated and consolidating
statements of income and retained earnings and of cash flows of such
Persons for such quarter and the portion of the fiscal year through the
end of such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as
being fairly stated in all material respects (subject to normal
year-end audit adjustments).
5.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(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, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Section 5.1(a) and (b), a certificate of a Responsible
Officer (the "Compliance Certificate") (i) stating that, to the best of
such Officer's knowledge, each Credit Party during such period has
observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other
Loan Documents and the Interest Rate Hedge Agreements to be observed,
performed or satisfied by it, and that such officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate; and (ii) in the case of financial statements referred
to in Section 5.1(a) and (b), including calculations and information
demonstrating in reasonable detail compliance with the requirements of
Section 6.1;
(c) not later than 30 days following the end of each fiscal
year of Newco, a copy of the projections by Newco of the operating
budget and cash flow budget of Newco and its Subsidiaries for the
succeeding fiscal year, such projections to be accompanied by a
certificate of a Responsible Officer to the effect that such
projections have been prepared on the basis of sound financial planning
practice and that such officer has no reason to believe they are
incorrect or misleading in any material respect;
(d) concurrently with the delivery of the financial statements
referred to in Section 5.1(a) and (b), a management narrative report
explaining all significant variances from forecasts, projections and
previous results and all significant current developments in staffing,
marketing, sales and operations; and
(e) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by
-46-
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of Newco or its Subsidiaries, as the
case may be.
5.4 Maintenance of Existence. Preserve, renew and keep in full force
and effect its corporate existence, except with respect to the Merger, and take
all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except as otherwise
permitted pursuant to Section 6.5, and comply with all Contractual Obligations
and Requirements of Law except to the extent that failure to comply therewith
could not, in the aggregate, be reasonably expected to have a Material Adverse
Effect.
5.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, product liability and business interruption) as
are usually insured against in the same general area by companies engaged in the
same or a similar business; and furnish to each Lender, upon written request,
full information as to the insurance carried.
5.6 Inspection of Property; Books and Records; Discussions. 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, upon prior
written notice, permit representatives of any Lender to visit and inspect any of
its properties and examine and make abstracts from any of its books and records
at any reasonable time and as often as may reasonably be desired and to discuss
the business, operations, properties and financial and other condition of either
Borrower and its Subsidiaries with officers and employees of such Borrower and
its Subsidiaries and with its independent certified public accountants.
5.7 Notices. Promptly give notice to the Administrative Agent (who
shall promptly notify each Lender) of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of either Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between either Borrower or any of its Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding (including without limitation
any notice of violation, alleged violation, liability or potential
liability under any Environmental Law) affecting either Borrower or any
of its Subsidiaries in which the amount involved is $5,000,000 or more
and not covered by insurance or in which injunctive or similar relief
is sought;
-47-
(d) the following events, as soon as possible and in any event
within 30 days after any Credit Party knows or has reason to know
thereof: (i) the occurrence or expected 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 either
Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the terminating, Reorganization
or Insolvency of, any Plan; 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 the relevant Borrower proposes to take with respect
thereto.
5.8 Environmental Laws. (a) Comply with, and ensure compliance by all
tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply in all respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, except to the extent that any failures could not,
in the aggregate, be expected to have a Material Adverse Effect or to result in
the payment of a Material Environmental Amount.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not be
reasonably expected to have a Material Adverse Effect.
5.9 Additional Subsidiaries. With respect to any Subsidiary of either
Borrower created or acquired after the Closing Date by such Borrower, promptly
(i) execute and deliver, or cause to be executed and delivered, to the
Administrative Agent a pledge agreement or supplement to a Stock Pledge
Agreement, in form, scope and substance satisfactory to the Administrative
Agent, granting to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in the Capital Stock of such
Subsidiary, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, executed in
blank, (iii) execute and deliver, or cause to be executed and delivered, to the
Administrative Agent a pledge agreement or supplement to the Subsidiaries Note
Pledge Agreement, in form, scope and substance satisfactory to the
Administrative Agent, granting to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in any notes held by
such Subsidiary, (iv) deliver to the Administrative Agent the certificates
representing such notes, endorsed in blank, (v) cause such Subsidiary to execute
and deliver a guarantee or a supplement to the Subsidiaries Guarantee (which
guarantee shall be senior to all
-48-
other Indebtedness of such guarantor), in form and substance satisfactory to the
Administrative Agent, in respect to all obligations of the Borrowers hereunder
and under the other Loan Documents and the Interest Rate Hedge Agreements, (vi)
cause such Subsidiary to execute and deliver a security agreement or supplement
to the Subsidiaries Security Agreement, in form and substance satisfactory to
the Administrative Agent, securing such Subsidiary's obligations under such
guarantee and covering the types of assets covered by the Subsidiaries Security
Agreement, (vii) to the extent required by Section 5.10(a), cause such
Subsidiary to execute and deliver one or more Mortgages, in form and substance
satisfactory to the Administrative Agent, securing such Subsidiary's obligations
under such guarantee, and any other documents required under such Section,
(viii) execute and deliver such amendments to this Agreement requested by the
Administrative Agent to reflect the existence of such Subsidiary, including,
without limitation, amendments to Sections 3, 5, 6 and 7 to include such
Subsidiary in the covenants, representations and warranties and agreements
contained therein and (ix) if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described in the
preceding clauses (i), (ii), (iii), (iv), (v), (vi) and (vii), which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
5.10 After-Acquired Property. (a) Upon the acquisition by either
Borrower or any of its Subsidiaries of any fee or leasehold interest in real
property for consideration in excess of $1,000,000, or of any Subsidiary holding
any such interest, deliver to the Administrative Agent one or more Mortgages
granting the Administrative Agent a first priority security interest in such
real property and/or leaseholds, together with (i) legal opinions in form and
substance satisfactory to the Administrative Agent and covering the matters
covered, with respect to the mortgages delivered on the Closing Date, by the
opinions delivered pursuant to Section 4.1(m)(i) and (ii) the documents which
would be required under Section 4.1(w), (x), (y) and (z), as appropriate, if
such Mortgage were to have been delivered at the Closing Date.
(b) Grant in favor of the Administrative Agent, for the benefit of the
Lenders, Liens on any other assets hereafter acquired and on previously
encumbered assets which become unencumbered, to the extent such Liens are then
permissible under applicable law and pursuant to any agreements to which either
Borrower or its Subsidiaries are a party, at any time that the aggregate fair
market value of such assets exceeds $1,000,000, pursuant to documentation in
form and substance satisfactory to the Administrative Agent.
5.11 Foreign Subsidiary. At or within two months after the Closing
Date, cause either Borrower and any Foreign Subsidiary to execute and deliver to
the Administrative Agent, in form and substance satisfactory to the
Administrative Agent, such documents and instruments (including, without
limitation, pledge agreements) and take such action (including, without
limitation, the delivery of stock certificates and instruments) as the
Administrative Agent may reasonably request in order to grant to the
Administrative Agent, for the ratable benefit of the Lenders, as collateral
security for the Borrowers' obligations hereunder, a first priority perfected
security interest in 65% of the Capital Stock of, or equivalent ownership
interests in, the Foreign Subsidiary, along with any warrants, options, or other
rights to acquire the same, in all cases to the extent legally permissible and
practicable.
-49-
5.12 Interest Rate Protection. Within 90 days after the Closing Date,
obtain interest rate protection for a period of at least three years on a
notional amount of the principal amount of the Term Loans, on a weighted average
basis taking into account scheduled amortization payments, on terms and
conditions reasonably satisfactory to the Administrative Agent and the Lenders.
5.13 Capital Contribution. (a) Simultaneously with its receipt of the
proceeds of the Term Loan, Newco shall (i) pay the Class A Consideration to the
Class A Holders, (ii) establish the Dissenting Shareholder Reserve and maintain
such Reserve in an account with the Swing Line Lender and pledge such account to
the Administrative Agent for the benefit of the Lenders, and (iii) make a
capital contribution to OpCo in the amount of the Term Loan Commitments less the
sum of (x) the Merger Consideration and (y) the Dissenting Shareholder Reserve.
(b) Upon consummation of all payments due to Dissenting Shareholders,
Newco shall make a capital contribution to OpCo of all amounts remaining in the
Dissenting Shareholder Reserve.
5.14 Year 2000 Compliance. Take all actions necessary to assure that
the Borrowers' computer based systems are able to operate and effectively
process data which includes dates on and after January 1, 2000. At the request
of the Administrative Agent, the Borrowers shall provide evidence of such
capability satisfactory to the Administrative Agent.
SECTION 60. NEGATIVE COVENANTS
Each of the Parent and the Borrowers hereby agrees, jointly and
severally, that, so long as the Commitments remain in effect or any amount is
owing to any Lender or the Administrative Agent hereunder or under any other
Loan Document, it shall not, and (except with respect to Section 6.1) shall not
permit any of its Subsidiaries to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Minimum Net Worth. Permit the Net Worth of Newco, on a
consolidated basis, at the last day of any fiscal quarter to be less
than (i) for any date of determination from the Closing Date through
and including the second anniversary of the Closing Date, the sum of
(x) $50,000,000 plus (y) 75% of cumulative Net Income of Newco, on a
consolidated basis, and; (ii) for any date of determination after the
second anniversary of the Closing Date, the sum of (x) the amount of
(i) plus (y) 50% of cumulative Net Income of Newco, on a consolidated
basis.
(b) Fixed Charge Coverage. Permit the Fixed Charge Coverage
Ratio of Newco, on a consolidated basis, for any period of four
consecutive fiscal quarters (or, if fewer than four full fiscal
quarters have elapsed since the Closing Date, the period since the
Closing Date) ending on the last day of any fiscal quarter (i) to be
less than 1.25 to 1.00, for the period from the Closing Date through
and including December 31, 2000, and (ii) to be less than 1.50 to 1.00
for the period from January 1, 2001 and thereafter.
-50-
(c) Total Leverage Ratio: Permit the Total Leverage Ratio of Newco, on
a consolidated basis, to be greater than as set forth below:
-----------------------------------------------------------
Period Ratio
-----------------------------------------------------------
Closing Date through and 2.85 to 1.00
including December 31, 1999
-----------------------------------------------------------
January 1, 2000 through and 2.50 to 1.00
including December 31, 2000
-----------------------------------------------------------
January 1, 2001 through and 2.25 to 1.00
including December 31, 2001
-----------------------------------------------------------
January 1, 2002 and thereafter 2.00 to 1.00
-----------------------------------------------------------
6.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrowers under this Agreement;
(b) Indebtedness under Interest Rate Hedge Agreements
entered into pursuant to Section 5.12 hereof;
(c) Indebtedness of either Borrower to any other Credit Party
and of any Credit Party to either Borrower or any other Credit Party;
and
(d) Additional Indebtedness of the Borrowers not exceeding
$10,000,000 in aggregate principal amount at any one time outstanding.
6.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of such
Person in conformity with GAAP (or, in the case of Foreign
Subsidiaries, generally accepted accounting principles in effect from
time to time in their respective jurisdictions of incorporation);
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings,
unless, in either case, enforcement proceedings have been commenced
with respect thereto;
-51-
(c) pledges or deposits in connection with workers,
compensation, unemployment insurance and other social security
legislation (excluding ERISA);
(d) deposits to secure the performance of bids, 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 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 such
Person;
(f) Liens securing Indebtedness of the Borrowers permitted by
Section 6.2(c) incurred to finance the acquisition of fixed or capital
assets (whether pursuant to a loan, a Financing Lease or otherwise),
provided that (i) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets,
(ii) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness, (iii) the amount of
Indebtedness secured thereby is not increased and (iv) the principal
amount of Indebtedness secured by any such Lien shall at no time exceed
90% of the original purchase price of such property at the time it was
acquired;
(g) Liens created pursuant to the Security Documents; and
(h) Liens in connection with the Wheeling Bonds.
6.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and
listed on Schedule 6.4(a);
(b) Guarantee Obligations incurred after the date hereof
in an aggregate amount not to exceed $5,000,000 at any one time
outstanding;
(c) guarantees made in the ordinary course of its business by
either Borrower of obligations of any of its Subsidiaries, which
obligations are otherwise permitted under this Agreement; and
(d) the Guarantees.
6.5 Limitation on Fundamental Changes. Other than the Merger, enter
into any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all of its
property, business or assets, or make any material change in its present method
of conducting business, except:
-52-
(a) any Subsidiary of either Borrower may be merged or
consolidated with or into such Borrower (provided that such Borrower
shall be the continuing or surviving corporation) or with or into any
one or more wholly-owned Subsidiaries of such Borrower (provided that a
wholly-owned Domestic Subsidiary or Domestic Subsidiaries shall be the
continuing or surviving corporation); and
(b) any wholly-owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to any Borrower or any other wholly owned
Domestic Subsidiary of such Borrower.
6.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer
or otherwise dispose of any of its property, business or assets or any interest
therein (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person other
than either Borrower or any wholly-owned Domestic Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) as permitted by Section 6.5(b);
(d) the sale or other disposition of any other property for
consideration not in excess of $10,000,000; provided that the Net
Proceeds of each such transaction are applied to the prepayment of the
Loans as provided in and to the extent required by Section 2.10(b); and
(e) any other Asset Sale; provided that (i) any consideration
received therefor has been determined by such Person's Board of
Directors to be at fair market value, (ii) at least 90% of such
consideration is paid in cash and (iii) the Net Proceeds of each such
transaction are applied to the prepayment of the Loans as provided in
and to the extent required by Section 2.10(b).
6.7 Limitation on Dividends.
(a) With respect to Newco, declare or pay any dividend on, or
make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of Newco or any
warrants or options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of Newco, except
that (i) Newco may make the payments to the Class A Holders as contemplated
under the Merger Agreement, and (ii) (A) during the fiscal year ended December
31, 1999, Newco may declare and pay (in such fiscal year) dividends in
-53-
respect of its Capital Stock in an aggregate amount up to $2,500,000, (B) during
the fiscal year ended December 31, 2000, Newco may declare and pay dividends in
respect of its Capital Stock in an aggregate amount up to 25% of the Net Income
of Newco, on a consolidated basis, for the immediately preceding fiscal year
(determined by reference to Newco's audited consolidated financial statements
for such fiscal year) less the aggregate amount of dividends paid under clause
(A) above, and (C) during the fiscal year ending December 31, 2001, and each
fiscal year thereafter, Newco may declare and, on or after the second
anniversary of the Closing Date, pay dividends in respect of its Capital Stock
in an aggregate amount up to 50% of Net Income of Newco, on a consolidated
basis, for the immediately preceding fiscal year (determined by reference to
Newco's audited consolidated financial statements for such fiscal year),
provided that, in connection with clause (ii) above, (x) no Default or Event of
Default shall have occurred and be continuing at the time of the proposed
payment or would occur, or would be likely to occur, as a result of the proposed
payment, (y) simultaneously with such payment under clause (A) and (B) above,
Newco makes a payment to the Administrative Agent for the account of the Lenders
equal to the amount of the dividend for application to the Term Loans in
accordance with Section 2.10(a), and (z) with respect to clauses (B) and (C)
(but not clause (A)) of clause (ii) above, after giving effect to such dividend
the Free Cash Flow of Newco for the immediately preceding four consecutive
fiscal quarters is greater than zero.
(b) With respect to OpCo and its Subsidiaries, (i) direct or indirect
Subsidiaries of OpCo can declare and pay dividends in any amount to OpCo in
respect of the Capital Stock of each and OpCo can declare and pay dividends in
any amount to Newco in respect of its Capital Stock but in no event less than
the amounts from time to time required by Newco to make the payments required
under Section 2.8(a)(ii) hereof.
6.8 Limitation on Capital Expenditures. Make any expenditure in respect
of the purchase or other acquisition of fixed or capital assets (excluding any
such asset acquired in connection with normal replacement and maintenance
programs properly charged to current operations) except for expenditures by OpCo
and its Subsidiaries in the ordinary course of business not exceeding, in the
aggregate during any fiscal year of OpCo, $10,000,000 on a consolidated basis
except that OpCo shall be able to expend up to an additional $5,000,000 in the
aggregate in any period of four consecutive fiscal quarters, in addition to the
amounts otherwise permitted under this Section 6.8, in any one fiscal year to
add a third manufactured binder and wrapper production line at OpCo's plant in
Jacksonville, Florida.
6.9 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) loans and advances to employees of either of the Borrowers
or its Subsidiaries for travel, entertainment and relocation expenses
in the ordinary course of business in an aggregate amount for the
Borrowers and their Subsidiaries not to exceed $500,000 at any one time
outstanding;
-54-
(d) investments by either of the Borrowers or its Subsidiaries
in any Subsidiary of the Borrowers which has complied with the
conditions set forth in Section 5.9 (to the extent applicable) or any
Foreign Subsidiary which has complied with the conditions set forth in
Section 5.11; provided that the aggregate amount of all such advances,
loans, investments, transfers or guarantees outstanding at any time
made to or on behalf of the Foreign Subsidiaries shall not exceed
$10,000,000; and
(e) investments by the Borrowers in Joint Ventures in
existence on the date hereof and listed on Schedule 6.9(e).
6.10 Limitation on Optional Payments and Modifications of Debt
Instruments. (a) Make any optional payment or prepayment on or redemption or
purchase of any Indebtedness except pursuant to the Loan Documents, or (b)
amend, modify or change, or consent or agree to any amendment, modification or
change to any of the terms of any Indebtedness (excluding the Loans) (other than
any such amendment, modification or change which would extend the maturity or
reduce the amount of any payment of principal thereof or which would reduce the
rate or extend the date for payment of interest thereon).
6.11 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of either Borrower's or such Subsidiary's business and (c) upon
fair and reasonable terms no less favorable to such 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.
6.12 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by either Borrower or any Subsidiary
of real or personal property which has been or is to be sold or transferred by
either 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 either Borrower or such Subsidiary.
6.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of
any Borrower to end on a day other than December 31.
6.14 Limitation on Negative Pledge Clauses. Enter into with any Person
any agreement, other than (a) this Agreement and (b) any industrial revenue
bonds, purchase money mortgages or Financing Leases permitted by this Agreement
(in which cases, any prohibition or limitation shall only be effective against
the assets financed thereby), which prohibits or limits the ability of either
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired.
6.15 Limitations on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for the manufacture, sale and
distribution of tobacco, tobacco products and materials for the packaging and
marketing of tobacco, or in the case of Xxxxxxx International Finance Company,
enter into any business other than holding the Wheeling Bonds.
-55-
6.16 Limitation on Acquisitions. Make any Acquisition other than a
non-hostile Acquisition (a "Permitted Acquisition"); provided; however, that in
the case of each such Permitted Acquisition, (i) the Borrower making such
Permitted Acquisition is the surviving entity, (ii) the business to be acquired
is predominantly in such Borrower's existing lines of business or businesses
reasonably related thereto and located predominantly in the United States, (iii)
the Borrower shall have obtained the prior written consent of the Required
Lenders for any Permitted Acquisition, the cash portion of which total
consideration exceeds $5,000,000, (iv) the cash portion of any Permitted
Acquisition may not exceed $10,000,000, (v) the business to be acquired has
achieved net income before interest and taxes of not less than One Dollar
($1.00) for the immediately preceding fiscal year, (vi) at the time of, and
after giving effect to, any Permitted Acquisition, (x) no Default or Event of
Default has occurred an is continuing and (y) Newco, on a consolidated basis,
shall be in compliance with all of the financial covenants contained in Section
6 of this Agreement and the Borrowers shall provide evidence of such compliance
on a pro forma basis in the case of a Permitted Acquisition, and (vii) each new
Subsidiary of the Borrower acquired through a Permitted Acquisition shall become
a Guarantor under this Agreement. For purposes of this Section 6.16, "cash
portion" shall mean the sum of (x) the amount in Dollars actually paid by such
Borrower upon the closing of the Permitted Acquisition and (y) the aggregate
amount of Indebtedness assumed by such Borrower in connection with the Permitted
Acquisition.
SECTION 70. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Either Borrower shall fail to pay any principal of or
interest on any Loan when due in accordance with the terms hereof, or
either Borrower shall fail to pay any other amount payable hereunder or
under any Loan Document or any Interest Rate Hedge Agreement after any
such other amount becomes due in accordance with the terms hereof or
thereof; or
(b) Any representation or warranty made or deemed made by
either Borrower or any other Credit Party herein or in any other Loan
Document or any Interest Rate Hedge Agreement or which is contained in
any certificate, document or financial or other statement furnished by
it at any time under or in connection with this Agreement or any such
other Loan Document or any Interest Rate Hedge Agreement shall prove to
have been incorrect in any material respect on or as of the date made
or deemed made; or
(c) Either Borrower or any other Credit Party shall default in
the observance or performance of any agreement contained in Section
5.1, 5.2, 5.4 or 5.5 or Section 6 hereof (including to the extent
incorporated by reference pursuant to Section 6 of the Subsidiaries
Guarantee), Section 5(b) of any Stock Pledge Agreement, Section 5(a) to
5(e), 6(g) or 6(i) of the Subsidiaries Note Pledge Agreement, Section
3(b) of any Mortgage, Section 4.4, 5.5(a) or 6.2(a) or (b) of the
Borrower Security Agreement, or Section 4.7, 5.5(a) or 6.2(a) or (b) or
of the Subsidiaries Security Agreement; or
-56-
(d) Either Borrower or any other Credit 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
subsections (a) through (c) of this Section 7) or any Interest Rate
Hedge Agreement; or
(e) Either Borrower or any of its Subsidiaries shall (i)
default in any payment of principal of or interest on any Indebtedness
(other than the Loans) or in the payment of any Guarantee Obligation,
beyond the period of grace (not to exceed 30 days), if any, provided in
the instrument or agreement under which such Indebtedness or Guarantee
Obligation was created, if the aggregate amount of the Indebtedness
and/or Guarantee Obligations in respect of which such default or
defaults shall have occurred is at least $1,000,000; or (ii) default in
the observance or performance of any other agreement or condition
relating to any such Indebtedness or Guarantee Obligation or contained
in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit
the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to
become due prior to its stated maturity or such Guarantee Obligation to
become payable; or
(f) (i) Either Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or such Borrower or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there
shall be commenced against either Borrower or any of its Subsidiaries
any case, proceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall
be commenced against either Borrower or any of its Subsidiaries any
case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (iv) either Borrower or any of its Subsidiaries shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) either Borrower or any of its Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any
-57-
"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 either
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) either 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
either Borrower or any of its Subsidiaries involving in the aggregate
liability (not paid or fully covered by insurance) of $1,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof, or any action to enforce any such judgment or decree, or
any Lien created in connection therewith, shall have been taken; or
(i) (i) Any of the Security Documents shall cease, for any
reason, to be in full force and effect, or either Borrower or any other
Credit Party shall so assert, directly or indirectly, or (ii) the 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; or
(j) Any Guarantee shall cease, for any reason, to be in full
force and effect or any Guarantor shall so assert, directly or
indirectly;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i), (ii) or (iv) of subsection (f) of this Section with respect to
such Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrowers declare the Commitments to be terminated
forthwith, whereupon the 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 Borrowers, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement to be due and payable forthwith,
whereupon the same shall immediately become due and payable. In furtherance of
its rights hereunder, the Administrative Agent shall exercise on behalf of the
Lenders all of its other rights and remedies under this Agreement, the other
Loan Documents and applicable law. Except as
-58-
expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived.
SECTION 80. ADMINISTRATIVE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and appoints
the Administrative Agent as the agent of such Lender under this Agreement and
the other Loan Documents and the Interest Rate Hedge Agreements, and each such
Lender irrevocably authorizes the Administrative Agent, in such capacity, to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and the Interest Rate Hedge Agreements and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent by the terms of this Agreement and the other Loan Documents and the
Interest Rate Hedge Agreements, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or the Interest Rate Hedge Agreements or
otherwise exist against the Administrative Agent.
8.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents and the Interest
Rate Hedge Agreements by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
8.3 Exculpatory Provisions. Neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
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 or any
Interest Rate Hedge Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any Borrower or any officer thereof contained in this Agreement or any other
Loan Document or any Interest Rate Hedge Agreement or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document or any the Interest Rate Hedge Agreement or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or any Interest Rate Hedge Agreement or for
any failure of either Borrower to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document or any Interest Rate Hedge Agreement, or to inspect the properties,
books or records of any Borrower.
-59-
8.4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to either Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document or any Interest Rate
Hedge Agreement unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents and
the other Interest Rate Hedge Agreements in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto or shall be binding upon all the Lenders and all future holders
of the Loans.
8.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
either of the Borrowers 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; 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.
8.6 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that none of the Administrative Agent or any of its
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of either Borrower, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative 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 each Borrower and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this
-60-
Agreement and the other Loan Documents and the Interest Rate Hedge Agreements,
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 each Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of either Borrower which may come into
the possession of the Administrative Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Borrowers and
without limiting the obligation of the Borrowers to do so), ratably according to
their respective Commitment Percentages in effect on the date on which
indemnification is sought (or, if indemnification is sought after the date upon
which the Commitments shall have terminated and the Loans shall have been paid
in full, ratably in accordance with their Commitment Percentages immediately
prior to such date), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Loans) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of, the Commitments, this Agreement, any of the other Loan
Documents, any of the Interest Rate Hedge Agreements or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative 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 resulting solely from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this Section
shall survive the payment of the Loans and all other amounts payable hereunder.
8.8 Administrative Agent in Its Individual Capacity. The Administrative
Agent and its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with either Borrower as though the Administrative
Agent were not the Administrative Agent hereunder and under the other Loan
Documents and the Interest Rate Hedge Agreements. With respect to the Loans made
by it, the Administrative Agent shall have the same rights and powers under this
Agreement and the other Loan Documents and the Interest Rate Hedge Agreements as
any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
8.9 Successor Administrative Agent. The Administrative Agent may resign
as Administrative Agent upon 10 days notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents and the Interest Rate Hedge Agreements, then the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall be deemed approved by the Borrowers,
whereupon such successor agent shall succeed to the rights, powers and duties of
-61-
the Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and 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. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents and the
Interest Rate Hedge Agreements.
8.10 Syndication Agent; Documentation Agent; Managing Agent. The
parties agree that neither the Syndication Agent, the Documentation Agent nor
the Managing Agent shall have any special rights or powers under this Agreement
but shall be entitled, in each such capacity, to the same protections afforded
to the Administrative Agent under this Section 8.
SECTION 90. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement nor 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. The Required
Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrowers,
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 Borrowers hereunder or thereunder, or (b) waive, on such terms and
conditions as the Required Lenders or the Administrative Agent, 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) reduce the amount or extend the scheduled
date of maturity of any Loan or of any installment thereof, or reduce the stated
rate of any interest or fee payable hereunder or extend the scheduled date of
any payment thereof or increase the amount or extend the expiration date of any
Lender's Commitment, in each case without the consent of each Lender affected
thereby, or (ii) amend, modify or waive any provision of this Section or reduce
the percentage specified in the definition of Required Lenders, or consent to
the assignment or transfer by either Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents or release all or
substantially all of the Collateral or release any Guarantee or amend, modify or
waive any provision of Section 2.10 (a), in each case without the written
consent of all the Lenders, or (iii) amend, modify or waive any provision of
this Agreement which would directly and adversely affect the Swing Line Lender
without the written consent of the then Swing Line Lender. Any such waiver and
any such amendment, supplement or modification shall apply equally to each of
the Lenders and shall be binding upon the Borrowers, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Parent, the Borrowers, the Lenders and the Administrative Agent
shall be restored to their former positions 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; no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
-62-
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mail, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Parent, the Borrowers, the Administrative Agent, and
as set forth in Schedule I in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective parties hereto:
The Parent or the Borrowers: c/o Swisher International, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Financial Officer
Fax: 000.000.0000
The Administrative
Agent: BankBoston, N.A.
Xxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Relationship
Manager
Fax: 000.000.0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.2, 2.4, 2.6, 2.9, 2.11 or 2.16 shall not be
effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents or the
Interest Rate Hedge Agreements shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
9.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and the Interest Rate
Hedge Agreements 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 hereunder until all
obligations hereunder and under the other Loan Documents and the Interest Rate
Hedge Agreements have been paid in full and the Commitments hereunder have been
terminated.
9.5 Payment of Expenses and Taxes. Each Borrower jointly and severally
agrees (a) to pay or reimburse the Administrative Agent for all its reasonable
out-of-pocket costs
-63-
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 the Interest Rate Hedge
Agreements, or the use of the proceeds of the Loans in connection with the
Merger, 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 Administrative Agent 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 the Interest Rate
Hedge Agreements and any such other documents, including, without limitation,
the fees and disbursements of counsel to each Lender and of counsel to the
Administrative Agent, (c) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying
stamp, excise and other 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 the Interest Rate Hedge Agreements
and any such other documents, and (d) to pay, indemnify, and hold each Lender
and the Administrative Agent, and each of their respective Affiliates,
directors, officers, employees and representatives (each, an "Indemnified
Party") harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents and the Interest Rate Hedge Agreements, and the use of the
proceeds of the Loans and the Letters of Credit, including, without limitation,
any of the foregoing relating to the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Borrowers, any of their Subsidiaries or any of the Properties (all the foregoing
in this clause (d), collectively, the "Indemnified Liabilities"), provided, that
the Borrowers shall have no obligation hereunder to any Indemnified Party with
respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of such Indemnified Party. The agreements in this Section shall
survive repayment of the Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments . (a) This
Agreement shall be binding upon and inure to the benefit of the Borrowers, the
Lenders, the Administrative Agent and their respective successors and assigns,
except that neither Borrower may assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
owing to such Lender, any Commitment of such Lender or any other interest of
such Lender hereunder and under the other Loan Documents. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof,
-64-
such Lender shall remain the holder of any such Loan for all purposes under this
Agreement and the other Loan Documents, and the Borrowers and the Administrative
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and the other
Loan Documents. Each Borrower agrees that if amounts outstanding under this
Agreement are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in Section
9.7(a) as fully as if it were a Lender hereunder. Each Borrower also agrees that
each Participant shall be entitled to the benefits of Sections 2.18, 2.19, 2.20
and 2.21 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender; provided that, in the case
of Section 2.19, 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 may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time assign to any of its Affiliates or to any Lender or any affiliate thereof
or to an additional bank or financial institution (an "Assignee"), in the case
of any assignment relating to Commitments to such an additional bank or
financial institution with the consent of the Borrowers and the Administrative
Agent (which consents in each case shall not be unreasonably withheld), all or
any part of its rights and obligations under this Agreement and the other Loan
Documents pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit J, executed by such Assignee, such assigning Lender (and, to the extent
required, by the Borrowers and the Administrative Agent) and delivered to the
Administrative Agent for its acceptance and recording in the Register, provided
that, in the case of any such assignment to an additional bank or financial
institution, the sum of the aggregate principal amount of the Loans and the
aggregate amount of the Available Commitment being assigned and, if such
assignment is of less than all of the rights and obligations of the assigning
Lender, the sum of the aggregate principal amount of the Loans and the aggregate
amount of the Available Commitment remaining with the assigning Lender are each
not less than $5,000,000. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Commitment as set forth therein,
and (y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto). Notwithstanding any
provision of this Section and subsection (d) below, the consent of the Borrowers
shall not be required, and, unless requested by the Assignee and/or the
-65-
assigning Lender, new Notes shall not be required to be executed and delivered
by the Borrowers, for any assignment which occurs at any time when any of the
events described in clause (f) of Section 7 shall have occurred and be
continuing.
(d) The Administrative Agent shall, on behalf of the Borrowers,
maintain at the address of the Administrative Agent referred to in Section 9.2 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 amounts 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 Borrowers, the Administrative Agent and the Lenders
shall treat each Person whose name is recorded in the Register as the owner of a
Loan or other obligation hereunder or under any Note as the owner thereof for
all purposes of this Agreement and the other Loan Documents, notwithstanding any
notice to the contrary. Any assignment of any Loan or other obligation hereunder
or under any Note shall be effective only upon appropriate entries with respect
thereto being made in the Register. The Register shall be available for
inspection by the Borrowers or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of any assignment relating to
Revolving Credit Loans to an Affiliate of such assigning Lender or to an
Assignee that is not then a Lender or an affiliate thereof, by the Borrowers and
the Administrative Agent) together with payment to the Administrative Agent by
the assigning Lender or Assignee of a registration and processing fee of $3,500
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.
(f) The Borrowers authorize each Lender to disclose to any Participant
or Assignee (each, a "Transferee") and any prospective Transferee, subject to
the provisions of Section 9.15, any and all financial information in such
Lender's possession concerning the Borrowers and their Affiliates which has been
delivered to such Lender by or on behalf of the Borrowers pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrowers in connection with such Lender's credit evaluation of the Borrowers
and their Affiliates prior to becoming a party to this Agreement.
(g) 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; provided, however, that no such pledge or
assignment shall release such Lender from such Lender's obligations hereunder or
under any other Loan Document.
9.7 Adjustments; Set-off. (a) If any Lender (a "Benefited Lender")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral
-66-
in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in clause (f) of Section 7,
or otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's Loans,
or interest thereon, such Benefited Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender's Loan, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrowers,
any such notice being expressly waived by the Borrowers to the extent permitted
by applicable law, upon any amount becoming due and payable by any Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of any Borrower. Each Lender agrees promptly to notify the
Borrowers and the Administrative Agent after any such set-off and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
9.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrowers and the
Administrative Agent.
9.9 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.
9.10 Integration. This Agreement and the other Loan Documents and the
Interest Rate Hedge Agreements represent the agreement of the Borrowers, the
Administrative Agent and the Lenders with respect to the subject matter hereof
and thereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent or any Lender relative to subject matter
hereof not expressly set forth or referred to herein or in the other Loan
Documents or the Interest Rate Hedge Agreements.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
-67-
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
9.12 Submission To Jurisdiction; Waivers. Each Borrower and each other
Credit Party 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 and
the Interest Rate Hedge Agreements 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 Borrower or other Credit Party at its address set
forth in Section 9.2 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.
9.13 Acknowledgements. Each of the Borrowers and the other Credit
Parties hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents
and the Interest Rate Hedge Agreements;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to either Borrower or other Credit
Party arising out of or in connection with this Agreement or any of the
other Loan Documents or the Interest Rate Hedge Agreements, and the
relationship between the Administrative Agent and Lenders, on one hand,
and either Borrower or any other Credit Party, on the other hand, in
connection with this Agreement or any of the other Loan Documents or
the Interest Rate Hedge Agreements is solely that of debtor and
creditor; and
-68-
(c) no joint venture is created hereby or by the other Loan
Documents or the Interest Rate Hedge Agreements or otherwise exists by
virtue of the transactions contemplated hereby among the Lenders or
among the Borrowers, the other Credit Parties and the Lenders.
9.14 WAIVERS OF JURY TRIAL. EACH BORROWER, THE PARENT, THE OTHER CREDIT
PARTIES, THE ADMINISTRATIVE AGENT 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 OR THE INTEREST RATE HEDGE
AGREEMENTS AND FOR ANY COUNTERCLAIM THEREIN.
9.15 Confidentiality. Each Lender agrees to keep confidential all
non-public information provided to it by either Borrower pursuant to this
Agreement that is designated by such Borrower in writing as confidential;
provided that nothing herein shall prevent any Lender from disclosing any such
information (i) to the Administrative Agent or any other Lender, (ii) to any
Transferee which receives such information having been made aware of the
confidential nature thereof, (iii) to its and its Affiliates' employees,
directors, agents, attorneys, accountants and other professional advisors, (iv)
upon the request or demand of any Governmental Authority having jurisdiction
over such Lender, (v) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (vi) which has been publicly disclosed other than in breach
of this Agreement, or (vii) in connection with the exercise of any remedy
hereunder or under any of the other Loan Documents or the Interest Rate Hedge
Agreements.
-69-
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.
XXXXXXX INTERNATIONAL GROUP INC.
By ________________________________
Name:
Title:
SIGI ACQUISITION CORPORATION
By ________________________________
Name:
Title:
XXXXXXX INTERNATIONAL, INC.
By ________________________________
Name:
Title:
BANKBOSTON, N.A., as Administrative
Agent, a Lender, Issuing
Lender and Swingline Lender
By ________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA, as
Syndication Agent and a Lender
By ________________________________
Name:
Title:
-00-
XXXXXX XXXXXXXX, XXX XXXX BRANCH,
as Documentation Agent and a Lender
By ________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Managing Agent and a Lender
By ________________________________
Name:
Title:
Other Lenders:
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By ________________________________
Name:
Title:
FLEET NATIONAL BANK
By ________________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By ________________________________
Name:
Title:
-71-
PEOPLE'S BANK
By ________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By ________________________________
Name:
Title:
ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN AG
By ________________________________
Name:
Title:
By ________________________________
Name:
Title:
The following Persons are signatories to this Agreement in their capacities as
Credit Parties and not as Borrowers.
XXXX XXXXXX TECHNOLOGY INC.
By ________________________________
Name:
Title:
-72-
XXXXXX XXXXXXXX INTERNATIONAL, INC.
By ________________________________
Name:
Title:
XXXXXXX INTERNATIONAL FINANCE
COMPANY
By _______________________________
Name:
Title:
XXXXXXX INTERNATIONAL, LTD.
By ________________________________
Name:
Title:
XXXXXXX XXXXXXXX ENTERPRISES, INC.
By ________________________________
Name:
Title:
-73-
SCHEDULE I
TO CREDIT AGREEMENT
LENDERS, COMMITMENTS AND ADDRESSES FOR NOTICES
Revolving Credit Term Loan
Name/Address Commitment Commitment
------------ ---------- ----------
BankBoston, N.A., $ 18,750,000 $ 11,250,000
Administrative Agent
The Bank of Nova Scotia, $ 16,250,000 $ 9,750,000
Syndication Agent
Credit Lyonnais New York Branch, $ 16,250,000 $ 9,750,000
Documentation Agent
The Chase Manhattan Bank, Managing Agent $ 16,250,000 $ 9,750,000
Deutsche Bank AG New York Branch and/or Cayman $ 13,750,000 $ 8,250,000
Islands Branch
Fleet National Bank $ 13,750,000 $ 8,250,000
First Union National Bank $ 8,125,000 $ 4,875,000
People's Bank $ 8,125,000 $ 4,875,000
State Street Bank and Trust Company $ 8,125,000 $ 4,875,000
Erste Bank der Oesterreichischen Sparkassen AG $ 5,625,000 $ 3,375,000
--------------- --------------
TOTAL: $125,000,000 $ 75,000,000
SCHEDULE 3.1(a)
TO CREDIT AGREEMENT
LIABILITIES
SCHEDULE 3.6
TO CREDIT AGREEMENT
LITIGATION
SCHEDULE 3.8
TO CREDIT AGREEMENT
REAL PROPERTY
A. Fee Properties
1. 00 Xxxxxx Xxx Xxxxxx Xx, Xxxxx Xxxxx, Xxxxxxx
2. 000 Xxxx 00xx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx
3. 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx
4. 0 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx (For sale)
5. 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxx
6. 000-000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxx
7. 00 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxx
8. Xxxxx 00 Xxxx, Xxxxxxxxx, Xxxxxxxx
9. El Parasio, Honduras
B. Leased Properties
1. 00 Xxxxxxxx Xxxxxx, Xxxxxx, XX
2. 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx
3. 000 Xxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxx
4. 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx
5. 0000 Xxxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxx
6. 0000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxx Xxxxxxxx
SCHEDULE 3.13
TO CREDIT AGREEMENT
ERISA MATTERS
SCHEDULE 3.15
TO CREDIT AGREEMENT
SUBSIDIARIES
SCHEDULE 3.19(c)
TO CREDIT AGREEMENT
MORTGAGE FILING OFFICES
SCHEDULE 6.4(a)
TO CREDIT AGREEMENT
GUARANTEE OBLIGATIONS
SCHEDULE 6.9(e)
TO CREDIT AGREEMENT
INVESTMENTS IN JOINT VENTURES
