AMENDED AND RESTATED CREDIT AGREEMENT
$58,000,000
among
ENVIRODYNE INDUSTRIES, INC.
as Borrower,
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 11.8 HEREOF,
as Lenders,
and
BT COMMERCIAL CORPORATION,
as Agent
Dated as of June 1, 1998
THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into as
of June 1, 1998, among ENVIRODYNE INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), each financial institution identified
on Annex I (together with its successors and assigns, a "Lender"),
and BT COMMERCIAL CORPORATION, a Delaware corporation ("BTCC"),
acting in its capacity as agent for the Lenders (BTCC, in such
capacity, the "Agent").
BACKGROUND
1. Borrower, Lenders and Agent have previously entered
into that certain Credit Agreement dated as of June 20, 1995 (such
Credit Agreement being hereinafter referred to as the "Original
Credit Agreement").
2. Upon the terms and subject to the conditions set forth
herein, Borrower, Lenders and Agent have agreed to enter into this
Agreement in order, among other things, to: (a) amend and restate
the Original Credit Agreement in its entirety; (b) re-evidence,
ratify and reaffirm the Original Obligations (as hereinafter
defined), which Original Obligations shall be repayable hereafter
in accordance with the respective terms and provisions hereof; and
(c) set forth the terms and conditions under which Agent and
Lenders will from time to time hereafter make further loans and
extensions of credit to or for the account of Borrower.
3. The proceeds of the initial Revolving Loans made on the
Closing Date shall be used by Borrower on the Closing Date to
refinance in full the aggregate then outstanding principal balance
of the Revolving Loans (as defined in the Prudential Revolving
Credit Agreement).
3. It is the intention of Borrower, Lenders and Agent that
this Agreement not constitute a novation.
4. Accordingly, in consideration of the mutual agreements
contained herein, and subject to the terms and conditions hereof,
the parties hereto agree as follows:
SECTION 1A AMENDMENT AND RESTATEMENT OF ORIGINAL CREDIT
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AGREEMENT; NO NOVATION.
----------------------
(a) Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of the
Borrower set forth herein and in the Credit Documents, effective as
of the date hereof, the Original Credit Agreement is hereby amended
and restated in its entirety and, from and after the date hereof,
all references herein to "hereunder," "hereof," "herein" or words
of like import shall mean and be a reference to the Original Credit
Agreement, as amended hereby.
(b) It is expressly understood and agreed by each of the
parties hereto that (i) the Obligations (as such term is defined
herein) include all Obligations (as defined in the Original Credit
Agreement) existing on the date hereof (the "Original
Obligations"), (ii) the Original Obligations shall be payable
hereafter in accordance with the respective terms and provisions
hereof and (iii) this Agreement (1) merely re-evidences, ratifies
and confirms the Original Obligations and (2) is in no way intended
and shall not be deemed or construed to constitute a novation of
the Original Credit Agreement or any Revolving Notes issued
thereunder.
SECTION 1B NATURE OF REVOLVING LOANS AND THIS AGREEMENT.
--------------------------------------------
It is further expressly understood and agreed by each of the
parties hereto that (a) all Revolving Loans advanced hereunder
after the Closing Date (other than Revolving Loans the proceeds of
which are used to satisfy the Borrower's reimbursement obligations
in respect of Letters of Credit) are intended and shall be deemed
and construed to constitute (x) "Revolving Loans" (as defined in,
and for purposes of, the Collateral Agency Agreement) and (y) a
subsequent refinancing of indebtedness under the "Bank Credit
Agreement" (as defined in, and for purposes of, the 10.25%
Indenture); (b) all Revolving Loans the proceeds of which are used
to satisfy the Borrower's reimbursement obligations in respect of
Letters of Credit are intended and shall be deemed and construed to
constitute "Letter of Credit Obligations" (as defined in, and for
purposes of, the Collateral Agency Agreement); and (c) this
Agreement is intended and shall be deemed and construed to
constitute both the "Letter of Credit Facility Agreement" and the
"Revolving Loan Agreement" (as each such term is defined in the
Collateral Agency Agreement.
ARTICLE 1. DEFINITIONS.
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1.1 General Definitions.
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Accounts means "Accounts" as defined in the Security
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Agreements.
Acquired Debt means Debt of a Person existing on or prior to
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the time at which such Person became a Subsidiary and not incurred
in connection with, or in contemplation of, such Person becoming a
Subsidiary.
Affiliate of any specified Person means any other Person
---------
(i) which directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with such
specified Person, (ii) which beneficially owns or holds 10% or more
of any class of the Voting Securities of such specified Person, or
(iii) of which 10% or more of the Voting Securities is beneficially
owned or held by such specified Person or by a Subsidiary of such
specified Person.
Agent Advances has the meaning set forth in Section 3.2.
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Applicable Lending Office means, with respect to each Lender,
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such Lender's LIBOR Lending Office in the case of a LIBOR Rate
Loan, and such Lender's Domestic Lending Office in the case of a
Prime Rate Loan.
Assignment and Assumption Agreement has the meaning set forth
-----------------------------------
in Section 11.8.
Auditors means a nationally recognized firm of independent
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public accountants selected by the Borrower and satisfactory to the
Agent in its sole discretion. For purposes of this Credit
Agreement, the firm of Coopers & Xxxxxxx shall be deemed to be
satisfactory to the Agent.
Average Life means, as of any date, with respect to any debt
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security, the quotient obtained by dividing (i) the sum of the
products of (x) the numbers of years from such date to the dates of
each successive scheduled principal payment (including any sinking
fund or mandatory redemption payment requirements) of such debt
security multiplied by (y) the amount of such principal payment by
(ii) the sum of all such principal payments.
Banks means, collectively, Bank of America Illinois, Citibank
-----
International PLC and Citicorp North America, Inc., as agents under
the Credit Agreement dated December 31, 1993.
Borrower means Envirodyne Industries, Inc., a Delaware
--------
corporation.
Borrowing means a borrowing of Revolving Loans of the same
---------
Type by the Borrower on a pro rata basis from each of the Lenders
on a given date (whether pursuant to Section 3.2 or resulting from
continuations or conversions of Revolving Loans on a given date
pursuant to Sections 4.12(a) and (b), respectively) having, in the
case of LIBOR Loans, the same Interest Period.
Borrowing Base means the sum of:
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(A) ninety percent (90%) of Eligible Accounts
Receivable, plus
(B) sixty-five percent (65%) of Eligible Inventory,
plus
(C) cash held by the Collateral Agent in the Cash
Collateral Account, minus
(D) the aggregate amount of reserves, if any,
established by the Agent.
The Agent, in the exercise of its Permitted Discretion, may (i)
establish and increase or decrease reserves against Eligible
Accounts Receivable and Eligible Inventory and (ii) impose
additional restrictions (or eliminate the same) to the standards of
eligibility set forth in the definitions of "Eligible Accounts
Receivable" and "Eligible Inventory."
Borrowing Base Certificate means the certificate of the
--------------------------
Borrower concerning the Borrowing Base to be provided under Section
7.2, substantially in the form of Exhibit A.
Broad Affiliate of any specified Person means any other Person
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(i) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with such
specified Person, (ii) which beneficially owns or holds 25% or more
of any class of the Voting Securities of such specified Person, or
(iii) of which 25% or more of the Voting Securities is beneficially
owned or held by such specified Person or by a Subsidiary of such
specified Person.
Business Day means any day that is not a Saturday, a Sunday or
------------
a day on which commercial banks in Chicago, Illinois are required
or permitted by law to be closed and, when used in connection with
LIBOR Rate Loans, this definition will also exclude any day on
which commercial banks are not open for dealing in United States
dollar deposits in the London (U.K.) interbank market.
Capital Lease Obligation means, at any time, the amount of the
------------------------
liability with respect to a lease that would be required at such
time to be capitalized on a balance sheet of such Person prepared
in accordance with GAAP.
Capital Stock in any Person means any and all shares,
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interests, participations or other equivalents in the equity
interest (however designated) in such Person and any rights (other
than debt securities convertible into an equity interest), warrants
or options to acquire an equity interest in such Person.
Cash Collateral Account means the "Special Cash Collateral
-----------------------
Account" created pursuant to Section 5(b) of the Collateral Agency
Agreement.
Cash Equivalents means: (i) debt instruments, with maturities
----------------
of one year or less from the date of acquisition, issued by the
government of the United States of America or any agency thereof
(if fully guaranteed or insured by the government of the United
States of America), (ii) certificates of deposit, with maturities
of one year or less from the date of acquisition, of any commercial
bank incorporated under the laws of the United States of America
having a combined capital, surplus and undivided profits of not
less than $100,000,000, (iii) commercial paper of an issuer rated
at least A-1 by Standard & Poor's Corporation or P-1 by Xxxxx'x
Investors Service, Inc., and (iv) tax exempt floating rate tender
bonds, as to which payments of principal, interest and other
charges may be made at the option of the holder upon not more than
one week's notice which are payable upon tender or any default from
the proceeds of an unconditional and irrevocable letter of credit
issued by a United States office of any commercial bank all of
whose long-term debt securities are rated at least AA by Standard
& Poor's Corporation or Aa by Xxxxx'x Investors Service, Inc.
Change of Control means the occurrence of any of the following
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events (whether or not approved by the Board of Directors of the
Borrower or otherwise permitted by the terms of this Credit
Agreement): (i) any person (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), or any Affiliate of any such person
who is or becomes a "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire whether such right is exercisable
immediately or only after the passage of time), directly or
indirectly, of more than 50% of the Common Stock of the Borrower or
such other amount of Voting Securities to provide the ability to
elect, directly or indirectly, a majority of the members of the
Board of Directors of the Borrower; (ii) during any period of two
consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Borrower (together with
any new or replacement directors whose election by such Board or
whose nomination for election by the shareholders of the Borrower
was approved by a vote of a majority of the directors of the
Borrower then still in office who were either directors at the
beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Borrower
then in office; (iii) any direct or indirect Transfer (in one
transaction or a series of related transactions) of all or
substantially all of the consolidated assets of the Borrower and
its Subsidiaries to any person (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) or any Affiliate of any such
person; (iv) the approval by the Borrower or its shareholders of
any plan of liquidation; or (v) any other event constituting a
"change of control" in respect of the 10.25% Notes, the Prudential
Revolving Credit Agreement, the First Priority Notes, the
Subsequent First Priority Notes, the Second Priority Notes or the
Subsequent Second Priority Notes.
Closing Date means the date of execution and delivery of this
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Credit Agreement.
Closing Document List has the meaning set forth in Section
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5.1.
Code has the meaning set forth in Section 1.3.
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Collateral means the Accounts, Inventory and other Property
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identified as security for the Obligations under the Collateral
Documents.
Collateral Access Agreement means any landlord waiver,
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mortgagee waiver, bailee letter or any similar acknowledgement
agreement of any warehouseman or processor in possession of
Inventory, substantially in the form of Exhibit B.
Collateral Agency Agreement means the Intercreditor and
----------------------------
Collateral Agency Agreement of even date herewith among the Agent,
BTCC, Prudential and the First Priority Notes Indenture Trustee, as
modified, amended, extended, restated or supplemented from time to
time.
Collateral Documents means the Security Agreements, the
--------------------
Intellectual Property Security Agreements, the Pledge Agreements,
the Mortgages and all other contracts, instruments and other
documents pursuant to which Liens are now or hereafter granted (or
purported to be granted) to the Collateral Agent, for the benefit
of the "Secured Parties" (as defined in the Collateral Agency
Agreement), as any of the foregoing are modified, amended,
extended, restated or supplemented from time to time.
Collection Account has the meaning set forth in Section 4.9.
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Collections means all cash, funds, checks, notes, instruments
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and any other form of remittance tendered by account debtors in
payment of Accounts.
Commitment of a Lender means its commitment to make Revolving
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Loans and to participate in Letters of Credit, up to the amount set
forth opposite its name on Annex I, as such amount may be reduced
from time to time.
Common Stock means, with respect to any Person, any and all
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shares, interests, participation or other equivalent (however
designated) of Capital Stock in such Person which is not preferred
as to the payment of dividends or the distribution of assets on any
voluntary or involuntary liquidation over shares of any other class
of Capital Stock in such Person.
Consolidated Cash Flow means, for any period, Consolidated Net
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Income for such period, (A) increased by the sum of
(i) Consolidated Fixed Charges for such period, other than interest
capitalized by the Borrower and its Subsidiaries during such
period, (ii) income tax expense of the Borrower and its
Subsidiaries, on a consolidated basis, for such period (other than
income tax expense attributable to sales or other dispositions of
assets (other than sales of inventory in the ordinary course of
business)), (iii) depreciation expense of the Borrower and its
Subsidiaries, on a consolidated basis, for such period,
(iv) amortization expense of the Borrower and its Subsidiaries, on
a consolidated basis, for such period, and (v) other non-cash items
reducing Consolidated Net Income minus non-cash items increasing
Consolidated Net Income for such period, and (B) decreased by any
revenues received or accrued by the Borrower or any of its
Subsidiaries from any other Person (other than the Borrower or any
of its Subsidiaries) in respect of any Investment for such period,
all as determined in accordance with GAAP.
Consolidated Debt means the aggregate amount of Debt of the
-----------------
Borrower and its Subsidiaries, on a consolidated basis, determined
in accordance with GAAP.
Consolidated Entity means the Borrower and those of its
--------------------
Subsidiaries consolidated with it for purposes of financial
reporting.
Consolidated Fixed Charges means, for any period, (A) the sum
--------------------------
of, without duplication, (i) the aggregate amount of interest
expense of the Borrower and its Subsidiaries during such period
(including, without limitation, all commissions, discounts and
other fees and charges owed by the Borrower and its Subsidiaries
with respect to letters of credit and bankers' acceptances or
similar financing facilities and the net costs associated with
Interest Rate Agreements and Currency Agreements of the Borrower
and its Subsidiaries) paid, accrued or scheduled to be paid or
accrued during such period, including interest expense not required
to be paid in cash (including any amortization of original issue
debt discount), all determined in accordance with GAAP, plus all
interest capitalized by the Borrower and its Subsidiaries during
such period, (ii) the aggregate amount of the interest expense
component of rentals in respect of Capital Lease Obligations paid
or accrued by the Borrower and its Subsidiaries during such period,
determined in accordance with GAAP, (iii) the aggregate amount of
all operating lease expense of the Borrower and its Subsidiaries
during such period, determined in accordance with GAAP, and (iv) to
the extent any interest payment obligation of any other Person is
guaranteed by the Borrower or any of its Subsidiaries (other than
guarantees relating to obligations of customers of the Borrower or
any of its Subsidiaries that are made in the ordinary course of
business consistent with past practices of the Borrower or its
Subsidiaries), the aggregate amount of interest paid or accrued by
such Person in accordance with GAAP during such period attributable
to any such interest payment obligation, less (B) to the extent
included in (A) above, amortization or write-off of deferred
financing costs by the Borrower and its Subsidiaries during such
period; in each case after elimination of intercompany accounts
among the Borrower and its Subsidiaries and as determined in
accordance with GAAP.
Consolidated Intangible Assets means, as at any date, (i) the
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amount of all write-ups in the book value of any asset resulting
from the revaluation thereof and all write-ups in excess of the
cost of assets acquired, plus (ii) the amount of all unamortized
original issue discount, unamortized debt expense (exclusive of
amounts attributable to unamortized debt expense in existence as of
June 29, 1995), goodwill, patents (exclusive of amounts
attributable to patents owned by the Borrower and its Subsidiaries
as of June 29, 1995), trademarks, service marks, trade names,
copyrights, organization and development expense and other
intangible assets, in each case as would be taken into account in
preparing a balance sheet of the Borrower and its Subsidiaries on
a consolidated basis as at such date in accordance with GAAP.
Consolidated Net Income means, for any period, the aggregate
-----------------------
net income (or net loss, as the case may be) of the Borrower and
its Subsidiaries for such period on a consolidated basis,
determined in accordance with GAAP; provided, that there shall be
excluded therefrom, without duplication, (i) gains and losses from
the sale or other disposition of assets (other than sales of
inventory in the ordinary course) or reserves relating thereto,
(ii) items classified as extraordinary or nonrecurring (including,
without limitation, any gains from any exchange of debt securities)
and gains (but not losses) from discontinued operations, (iii) the
income (or loss) of any Joint Venture, except to the extent of the
amount of cash dividends or other distributions in respect of
Capital Stock therein actually paid during such period to the
Borrower or any of its Subsidiaries by such Joint Venture out of
funds legally available therefor (or, in the case of a loss, to the
extent the Borrower or any such Subsidiary funds such loss during
such period), (iv) except to the extent it may be included pursuant
to clause (iii), the income (or loss) of any other Person accrued
or attributable to any period prior to the date it becomes a
Subsidiary of such Person or is merged into or consolidated with
such Person or any of its Subsidiaries or such other Person's
Property (or a portion thereof) is acquired by such Person or any
of its Restricted Subsidiaries, and (v) non-cash items decreasing
or increasing Consolidated Net Income arising out of currency
translation effects.
Consolidated Net Worth means Net Worth without giving effect
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to any purchase accounting adjustments if Consolidated Net Worth is
being determined in connection with any merger, consolidation or
other acquisition of, or by, the Borrower or any of its
Subsidiaries.
Consolidated Secured Debt means, collectively, the outstanding
--------------------------
principal balance of the Debt described in Sections 8.3(a)(i) and
(a)(iv) and the unpaid principal amount of the Revolving Loans and
that portion of the Letter of Credit Obligations constituting
unreimbursed draws under Letters of Credit for which a Revolving
Loan has not yet been funded.
Consolidated Senior Debt means, at any time, all Consolidated
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Debt at such time, other than the then outstanding principal amount
of: (i) the 10.25% Notes, (ii) the Second Priority Notes, (iii)
the Subsequent Second Priority Notes, (iv) Debt of any Subsidiary
of the Borrower payable to the Borrower or any Wholly Owned
Subsidiary of the Borrower, and (v) Debt of the Borrower that is
not secured by a Lien or that is junior in right of payment, and
subordinate to, the Obligations pursuant to subordination terms in
form and substance acceptable to the Agent and Lenders, which Debt
matures after the maturity date of the First Priority Notes, and
has no principal payments scheduled until, a date which is at least
six (6) months after the maturity date of the First Priority Notes.
Consolidated Tangible Net Worth means, at any time,
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Consolidated Net Worth at such time, less Consolidated Intangible
Assets at such time.
Consolidated Total Capitalization means, at any time, the sum
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of: (i) Consolidated Net Worth at such time, plus (ii)
Consolidated Debt.
Control means (except as otherwise specifically provided
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herein) the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
Person, whether through the ownership of Voting Securities, by
agreement or otherwise; and the terms "Controlling" and
"Controlled" have meanings correlative to the foregoing.
Control Group means a controlled group of corporations within
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the meaning of Section 414(b) of the Internal Revenue Code of which
the Borrower is a member, any group of corporations or entities
under common control with the Borrower within the meaning of
Section 414(c) of the Internal Revenue Code of which the Borrower
is a member or any affiliated service group within the meaning of
Section 414(m) of the Internal Revenue Code of which the Borrower
is a member.
Credit Documents means, collectively, this Credit Agreement,
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the Revolving Notes, each of the Collateral Documents, the Guaranty
Agreement and all other documents, agreements, instruments,
opinions and certificates now or hereafter executed by the
Borrower, a Significant Domestic Subsidiary or any other Credit
Party and delivered to the Agent or any Lender in connection
herewith or therewith, as modified, amended, extended, restated or
supplemented from time to time.
Credit Parties means, collectively, the Borrower and any other
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parties to the Credit Documents (except the Lenders, the Agent, the
Issuing Bank, the Collateral Agent and issuers of opinions).
Currency Agreement of any Person means any foreign exchange
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contract, currency swap agreement, option or futures contract or
other similar agreement or arrangement designed to protect such
Person or any of its Subsidiaries against fluctuations in currency
values (as opposed to being used in any way for speculative trading
purposes).
Current Debt means, with respect to any Person, all
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Indebtedness of such Person for borrowed money which by its terms
or by the terms of any instrument or agreement relating thereto
matures on demand or within one year from the date of the creation
thereof and is not directly or indirectly renewable or extendible
at the option of the debtor to a date more than one year from the
date of the creation thereof, provided that Indebtedness for
borrowed money outstanding under a revolving credit or similar
agreement which obligates the lender or lenders to extend credit
over a period of more than one year shall constitute Funded Debt
and not Current Debt, even though such Indebtedness by its terms
matures on demand or within one year from the date of the creation
thereof.
Debt shall mean Current Debt and Funded Debt.
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Default means an event, condition or default which with the
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giving of notice, the passage of time or both would be an Event of
Default.
Defaulting Lender has the meaning set forth in Section 3.6.
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Domestic Lending Office means, with respect to any Lender, the
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office of such Lender specified as its "Domestic Lending Office" on
Annex I, as such annex may be amended from time to time, which
office shall in any event be located in the United States.
Domestic Subsidiary means any Subsidiary of the Borrower
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organized under the laws of any state of the United States of
America or the District of Columbia.
DPK means X.X. Xxxxx & Associates, L.P., a Delaware limited
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partnership, and its successors and assigns.
Eligible Accounts Receivable means Accounts of the Borrower
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and its Significant Domestic Subsidiaries deemed by the Agent in
the exercise of its commercially reasonable judgement to be
eligible for inclusion in the calculation of the Borrowing Base.
In determining the amount to be so included, the face amount of
such Accounts shall be reduced by the amount of all returns,
discounts, deductions, claims, credits, charges, or other
allowances. Unless otherwise approved in writing by the Agent, no
Account shall be deemed to be an Eligible Account Receivable if:
(a) it arises out of a sale made by the Borrower or any of
its Significant Domestic Subsidiaries to an Affiliate; or
(b) it is unpaid more than 60 days after the original
payment due date specified in the related invoice or it is unpaid
more than 120 days after the initial date of such invoice, based on
the Borrower's reasonable estimate thereof; or
(c) it is from the same account debtor or its Affiliate
and fifty percent (50%) or more of all Accounts from that account
debtor (and its Affiliates) are ineligible under (b) above; or
(d) when aggregated with all other Accounts of an account
debtor, the Account exceeds fifteen percent (15%) in face value of
all Accounts of the Borrower and its Significant Domestic
Subsidiaries on a consolidated basis then outstanding, to the
extent of such excess, unless supported by an irrevocable letter of
credit satisfactory to the Agent (as to form, substance and issuer)
and assigned to and directly drawable by the Collateral Agent
excluding, for purposes of the limitation imposed by this paragraph
(e), Accounts of the account debtors listed on Schedule B; or
(e) the account debtor for the Account is a creditor of
the Borrower or any of its Significant Domestic Subsidiaries, has
or has asserted a right of setoff, has disputed its liability or
made any claim with respect to the Account or any other Account
which has not been resolved, to the extent of the amount owed by
the Borrower or any of its Significant Domestic Subsidiaries to the
account debtor, the amount of such actual or asserted right of
setoff, or the amount of such dispute or claim, as the case may be,
unless a reduction has already been made to the amount of the
Account as a result of the dispute, claim or assertion of set-off
rights pursuant to the first sentence of this definition; or
(f) the account debtor is (or its assets are) the subject
of an Insolvency Event; or
(g) the Account is not payable in Dollars or the account
debtor for the Account is located outside the continental United
States, unless the Account is supported by an irrevocable letter of
credit satisfactory to the Agent (as to form, substance and issuer)
or the Account is insured as to collectibility and political risk
pursuant to a commercial risk insurance policy acceptable to the
Agent (as to form, substance and issuer); or
(h) the sale to the account debtor is on a xxxx-and-hold,
guarantied sale, sale-and-return, sale on approval or consignment
basis or made pursuant to any other written agreement providing for
repurchase or return; or
(i) the Agent determines by its own credit analysis that
collection of the Account is uncertain or the Account may not be
paid; or
(j) the account debtor is the United States of America or
any department, agency or instrumentality thereof, unless the
Borrower or any of its Significant Domestic Subsidiaries duly
assigns its rights to payment of such Account to the Collateral
Agent pursuant to the Assignment of Claims Act of 1940, as amended
(31 U.S.C. Sections 3727 et seq.); or
(k) the goods giving rise to such Account have not been
shipped and delivered to, or have been rejected by, the account
debtor, or the services giving rise to such Account have not been
performed and accepted; or
(l) the Account does not comply with all Requirements of
Law, including without limitation the Federal Consumer Credit
Protection Act, the Federal Truth in Lending Act and Regulation Z
of the Board of Governors of the Federal Reserve System; or
(m) the Account is subject to any adverse security
deposit, progress payment or other similar advance made by or for
the benefit of the applicable account debtor; or
(n) it is not subject to a valid and perfected first
priority Lien in favor of the Collateral Agent or does not
otherwise conform to the representations and warranties contained
in the Credit Documents.
In addition to the foregoing, Eligible Accounts Receivable
shall include such Accounts for which the Borrower shall request
approval and that the Agent approves in advance, in writing, and in
its Permitted Discretion, which approval shall not prevent the
Agent from time to time from revoking such approval in the exercise
of its Permitted Discretion.
Eligible Inventory means the aggregate amount of Inventory of
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the Borrower and its Significant Domestic Subsidiaries deemed by
the Agent in the exercise of its commercially reasonable judgement
to be eligible for inclusion in the calculation of the Borrowing
Base. In determining the amount to be so included, Inventory shall
be valued at the lower of cost or market on a basis consistent with
the Borrower's or the Significant Domestic Subsidiary's current and
historical accounting practice. Unless otherwise approved in
writing by the Agent, Inventory shall not be deemed Eligible
Inventory if:
(a) it is not owned solely by the Borrower or any of its
Significant Domestic Subsidiaries or the Borrower or any of its
Significant Domestic Subsidiaries does not have good, valid and
marketable title thereto; or
(b) it is not located in the United States; or
(c) it is not located on property owned by the Borrower or
any of its Significant Domestic Subsidiaries (all such Inventory,
the "Off-Site Inventory") and the aggregate value of the Off Site
Inventory exceeds five percent (5%) of the aggregate value of all
of the Inventory of the Borrower and the Significant Domestic
Subsidiaries, unless the lessor or the contract warehouseman or
other Person that owns the premises, as the case may be, has
executed and delivered to the Agent a Collateral Access Agreement
in form and substance acceptable to the Agent and such Inventory is
segregated or otherwise separately identifiable from goods of
others, if any, stored on such premises; or
(d) it is not subject to a valid and perfected first
priority Lien in favor of the Collateral Agent, except with respect
to Inventory stored at sites described in clause (c) above, for
Liens for unpaid rent or normal and customary warehousing charges;
or
(e) it consists of goods returned or rejected by the
Borrower's or any of the Significant Domestic Subsidiaries'
customers or goods in transit to third parties (other than to
warehouse sites covered by a Collateral Access Agreement); or
(f) it is not first-quality finished goods, work-in-
process or raw materials, or it is obsolete or slow moving (unless
a reserve has been established with respect to obsolete and slow
moving inventory that is satisfactory to the Agent), or does not
otherwise conform to the representations and warranties contained
in the Credit Documents.
In addition to the foregoing, Eligible Inventory shall include
such items of the Borrower's Inventory for which the Borrower shall
request approval and that the Agent approves in advance, in
writing, and in its Permitted Discretion, which approval shall not
prevent the Agent from time to time from revoking such approval in
the exercise of its Permitted Discretion.
ERISA means the Employee Retirement Income Security Act of
------
1974, 29 U.S.C. Sections 1000 et seq., amendments thereto,
successor statutes, and regulations or guidance promulgated
thereunder.
Event(s) of Default has the meaning set forth in Article 9.
-------------------
Exchange Act means the Securities Exchange Act of 1934, as
------------
amended from time to time, and the rules and regulations of the SEC
promulgated thereunder.
Exempted Transactions means (i) transactions with Cargill
---------------------
Financial Services and its Affiliates (collectively, "Cargill") so
long as Cargill is not a Broad Affiliate of the Borrower; (ii)
transactions with Reliance Insurance Co. and its Affiliates
(collectively, "Reliance") so long as Reliance is not a Broad
Affiliate of the Borrower; (iii) purchases of turkey timers from
Xxxx Enterprises, Inc. and (iv) purchasers of chemicals from
Weskem-Hall, Inc.
Expenses means all reasonable costs and expenses of the Agent
--------
incurred in connection with the Credit Documents and the
transactions contemplated therein, including, without limitation,
(i) the costs of conducting record searches, examining Collateral,
opening bank accounts and lockboxes, depositing checks, and
receiving and transferring funds (including charges for checks for
which there are insufficient funds), (ii) the reasonable fees and
expenses of legal counsel and paralegals (including the allocated
cost of internal counsel and paralegals), accountants, appraisers
and other consultants, experts or advisors retained by the Agent,
(iii) the cost of title insurance premiums, real estate survey
costs, and fees and taxes in connection with the filing of
financing statements, (iv) the costs of preparing and recording
Collateral Documents, releases of Collateral, and waivers,
amendments, and terminations of any of the Credit Documents, and
(v) expenses incurred in order to maintain and protect any of the
Collateral in accordance with Sections 7.6 or 10.11. Expenses also
--------
means all reasonable costs and expenses (including the reasonable
fees and expenses of legal counsel and other professionals) paid or
incurred by the Agent and any Lender (i) during the continuance of
an Event of Default, (ii) in enforcing or defending its rights
under or in respect of this Credit Agreement, the other Credit
Documents, the Collateral Agency Agreement or any other document or
instrument now or hereafter executed and delivered in connection
herewith, (iii) collecting the Loans, (iv) foreclosing or otherwise
collecting upon the Collateral or any part thereof and (v) in
obtaining any legal, accounting or other advice in connection with
any of the foregoing.
Expiration Date means the earlier to occur of (a) June 20,
---------------
1999, (b) the date on which the First Priority Notes or Subsequent
First Priority Notes are prepaid or required to be prepaid in their
entirety including, without limitation, by automatic acceleration
or demand for repurchase or (c) the date on which the Commitments
are terminated pursuant to Section 9.2(b).
Federal Funds Rate means, for any period, a fluctuating
------------------
interest rate per annum for each day during such period equal to
the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
Federal Funds brokers, as published for such day (or, if such day
is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent
from three Federal Funds brokers of recognized standing selected by
the Agent.
Fees means, collectively, the Unused Line Fees, the Letter of
----
Credit Fees, the L/C Facing Fee, the Issuing Bank Fees and the fees
provided for in that certain letter dated June 5, 1995 between BTCC
and the Borrower.
Financial Statements means the consolidated and/or
--------------------
consolidating balance sheets, statements of operations, statements
of cash flows and statements of changes in shareholder's equity of
the Consolidated Entity for the period specified, prepared in
accordance with GAAP and consistently with prior practices.
First Priority Notes means any of the Series A First Priority
--------------------
Notes and Series B First Priority Notes issued under the First
Priority Notes Indenture.
First Priority Note Documents means, collectively, the Note
-----------------------------
Agreement, the First Priority Notes Indenture and all other
documents, instruments, agreements, opinions and certificates now
or hereafter executed and/or delivered pursuant thereto or in
connection therewith or in connection with the sale or exchange of
the First Priority Notes, as modified, amended, extended, restated
or supplemented from time to time.
First Priority Notes Indenture means the Indenture, dated as
------------------------------
of June 20, 1995, between the Borrower and the First Priority Notes
Indenture Trustee under which the First Priority Notes and the
Subsequent First Priority Notes are being issued, as modified,
amended, extended, restated or supplemented from time to time.
First Priority Notes Indenture Trustee means Shawmut Bank
--------------------------------------
Connecticut, National Association, and any successor or replacement
appointed pursuant to the terms of the First Priority Notes
Indenture.
Fiscal Year Change has the meaning set forth in Section 8.14.
-------------------
Funded Debt means, with respect to any Person, all
-----------
Indebtedness of such Person which by its terms or by the terms of
any instrument or agreement relating thereto matures, or which is
otherwise payable or unpaid, more than one year from, or is
directly or indirectly renewable or extendable at the option of the
debtor to a date more than one year (including an option of the
debtor under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of more than one
year) from, the date of the creation thereof.
GAAP means generally accepted accounting principles in the
----
United States as in effect from time to time.
GECC means General Electric Capital Corporation, a New York
----
corporation, and its successors and assigns.
GECC Intercreditor Agreements means the intercreditor and
------------------------------
subordination agreements among the Collateral Agent, GECC, Shawmut
Bank Connecticut, National Association, as Owner Trustee, and the
Borrower dated as of June 20, 1995, as amended, extended, restated
or supplemented from time to time.
GECC Lease Documents means (i) the Lease Agreement dated as of
--------------------
December 18, 1990 between The Connecticut National Bank (now known
as Shawmut Bank Connecticut, National Association) ("TCNB"), Owner
Trustee, as lessor and Viskase Corporation, as lessee, (ii) the
Participation Agreement dated as of December 18, 1990 among Viskase
Corporation, the Borrower, GECC and TCNB and (iii) the related
instruments and agreements with respect thereto, in each case as
the same may have heretofore been or may hereinafter be amended,
modified, restated, renewed or extended or refinanced from time to
time.
Governing Documents means certificates or articles of
-------------------
incorporation, by-laws and other organizational or governing
documents.
Governmental Authority means 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 shall mean, with respect to any Person, any direct
---------
or indirect liability, contingent or otherwise, of such Person with
respect to any indebtedness, lease, dividend or other obligation of
another, including, without limitation, any such obligation
directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of
which such Person is otherwise directly or indirectly liable,
including, without limitation, any such obligation in effect
guaranteed by such Person through any agreement (contingent or
otherwise) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions or
otherwise), or to maintain the solvency or any balance sheet or
other financial condition of the obligor of such obligation, or to
make payment for any products, materials or supplies or for any
transportation or services regardless of the non-delivery or non-
furnishing thereof, in any such case if the purpose or intent of
such agreement is to provide assurance that such obligation will be
paid or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such obligation will be
protected against loss in respect thereof. The amount of any
Guarantee shall be equal to the outstanding principal amount of the
obligation guaranteed or such lesser amount to which the maximum
exposure of the guarantor shall have been specifically limited.
Guaranty Agreement means the Guaranty Agreement executed in
------------------
favor of the Collateral Agent by each Significant Domestic
Subsidiary, substantially in the form of Exhibit C, pursuant to
which each Significant Domestic Subsidiary agrees to guaranty
payment and performance of the Obligations, as amended, restated,
supplemented or otherwise modified from time to time.
Highest Lawful Rate means, at any given time during which any
-------------------
Obligations shall be outstanding hereunder, the maximum non-
usurious interest rate that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the
Obligations, under the laws of the State of Illinois (or the law of
any other jurisdiction whose laws may be mandatorily applicable
notwithstanding other provisions of this Credit Agreement and the
other Credit Documents), or under applicable federal laws which may
presently or hereafter be in effect and which allow a higher
maximum non-usurious interest rate than under Illinois (or such
other jurisdiction's) law, in any case after taking into account,
to the extent permitted by applicable law, any and all relevant
payments or charges under this Credit Agreement and any other
Credit Documents executed in connection herewith, and any available
exemptions, exceptions and exclusions.
Indebtedness means, with respect to any Person, without
------------
duplication, (i) all items (excluding items of contingency reserves
or of reserves for deferred income taxes) which in accordance with
GAAP would be included in determining total liabilities as shown on
the liability side of a balance sheet of such Person as of the date
on which Indebtedness is to be determined, (ii) all indebtedness
secured by any Lien on any property or asset owned or held by such
Person subject thereto, whether or not the indebtedness secured
thereby shall have been assumed, (iii) all indebtedness of others
with respect to which such Person has become liable by way of a
Guarantee (including, without limitation, all obligations of such
Person with respect to surety bonds, bank acceptances, and letters
of credit and other similar obligations), (iv) all obligations of
such Person in respect of Currency Agreements or Interest Rate
Agreements, and (v) the maximum fixed repurchase price of any
Redeemable Stock. For purposes of the preceding sentence, the
maximum fixed repurchase price of any Redeemable Stock that does
not have a fixed repurchase price shall be calculated in accordance
with the terms of such Redeemable Stock as if such Redeemable Stock
were repurchased on any date on which Indebtedness shall be
required to be determined hereunder; provided, that if such
Redeemable Stock is not then permitted to be repurchased, the
repurchase price shall be the book value of such Redeemable Stock.
Insolvency Event means, with respect to any Person, the
----------------
occurrence of any of the following: (a) such Person shall be
adjudicated insolvent or bankrupt, or generally fail to pay, or
admit in writing its inability to pay, its debts as they become
due, (b) the voluntary commencement of any proceeding or the filing
of any petition under any bankruptcy, insolvency or similar law,
(c) the seeking of dissolution or reorganization or the appointment
of a receiver, trustee, custodian or liquidator for it or a
substantial portion of its property, assets or business or to
effect a plan or other arrangement with its creditors, (d) the
filing of any answer admitting the jurisdiction of the court and
the material allegations of an involuntary petition filed against
it in any bankruptcy, insolvency or similar proceeding, (e) such
Person shall make a general assignment for the benefit of its
creditors, or shall consent to, or acquiesce in the appointment of,
a receiver, trustee, custodian or liquidator for a substantial
portion of its property, assets or business. Insolvency Event
----------------
shall also mean, with respect to any Person, the occurrence of any
of the following: an involuntary proceeding or involuntary petition
shall be commenced or filed against such Person under any
bankruptcy, insolvency or similar law seeking the dissolution or
reorganization of it or the appointment of a receiver, trustee,
custodian or liquidator for it or of a substantial part of its
property, assets or business, or any writ, judgment, warrant of
attachment, execution or similar process shall be issued or levied
against a substantial part of its property, assets or business, and
such proceedings or petitions shall not be dismissed, or such writ,
judgment, warrant of attachment, execution or similar process shall
not be released, vacated or fully bonded, within 60 days after
commencement, filing, or levy, as the case may be, or any order for
relief shall be entered in any such proceeding.
Intellectual Property Security Agreements means, collectively,
-----------------------------------------
each Intellectual Property Security Agreement executed at any time
in favor of the Collateral Agent by the Borrower or any of its
Subsidiaries, substantially in the form of Exhibit D, as modified,
amended, extended, restated or supplemented from time to time.
Interest Period means, for any LIBOR Rate Loan, the period
---------------
commencing on the date of such Borrowing and ending on the last day
of the period selected by the Borrower pursuant to the provisions
below. The duration of each such Interest Period shall be one,
two, three or six months, in each case as the Borrower may, in an
appropriate Notice of Borrowing, Notice of Continuation or Notice
of Conversion, select; provided, that the Borrower may not select
any Interest Period that ends after the Expiration Date. Whenever
the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding Business Day;
provided, that if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the next preceding
Business Day.
Interest Rate Agreement of any Person means any arrangement
------------------------
with any other Person whereby, directly or indirectly, such Person
is entitled to receive from time to time periodic payments
calculated by applying either a floating or fixed rate of interest
on a notional amount in exchange for periodic payments made by such
Person calculated by applying a fixed or floating rate of interest
on the same notional amount and shall include, without limitation,
any interest rate swap agreement, interest rate cap, floor or
collar agreement, option or futures contract or other similar
agreements or arrangements, designed to protect such Persons or any
of its Subsidiaries from fluctuations in interest rates (as opposed
to being used in any way for speculative trading purposes).
Internal Revenue Code means the Internal Revenue Code of 1986,
---------------------
amendments thereto, successor statutes, and regulations or guidance
promulgated thereunder.
Inventory means "Inventory" as defined in the Security
---------
Agreements.
Investment means, as to any investing Person, any direct or
----------
indirect advance, loan (other than extensions of trade credit on
commercially reasonable terms in the ordinary course of business
that are recorded as accounts receivable on the balance sheet of
such Person or any of its Subsidiaries in accordance with GAAP) or
other extension of credit, guarantee or capital contribution to, or
any acquisition by, such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued
by any other Person. In determining the amount of any Investment
involving a transfer of Property, such Property shall be valued at
its fair market value at the time of such transfer, and such fair
market value shall be determined in good faith by the Board of
Directors of the investing Person, whose determination in such
regard shall be conclusive.
Issuing Bank means Bankers Trust Company or any Lender or
------------
other financial institution that is acceptable to the Agent which
may at any time issue or be requested to issue a Letter of Credit
for the account of the Borrower.
Issuing Bank Fees has the meaning set forth in Section 4.3.
-----------------
Joint Venture of a Person means any Person in which the
-------------
investing Person has a joint or shared equity interest but which is
not a Subsidiary of such investing Person.
L/C Facing Fee has the meaning set forth in Section 4.3.
--------------
Lender Advances has the meaning set forth in Section 3.2.
---------------
Letter of Credit Fee has the meaning set forth in Section 4.3.
--------------------
Letter of Credit Obligations means the sum of the aggregate
----------------------------
undrawn face amount of all Letters of Credit outstanding, plus the
aggregate amount of all drawings under Letters of Credit for which
the Borrower has not reimbursed the Issuing Bank to the extent a
Revolving Loan has not been advanced pursuant to Section 3.2 to
reimburse the Issuing Bank therefor.
Letter of Credit Unused Line Fee has the meaning set forth in
--------------------------------
Section 4.2.
Letters of Credit means all letters of credit issued for the
-----------------
account of the Borrower under Article 3 and all amendments,
renewals, extensions or replacements thereof.
LIBOR Lending Office means, with respect to any Lender, the
--------------------
office of such Lender specified as its "LIBOR Lending Office"
opposite its name on Annex I, as such annex may be amended from
time to time (or, if no such office is specified, its Domestic
Lending Office).
LIBOR Rate means, with respect to any Interest Period for each
----------
LIBOR Rate Loan comprising part of the same Borrowing, an interest
rate per annum equal to the rate (rounded upward to the nearest
whole multiple of one-sixteenth (1/16) of one percent (1.00%) per
annum, if such rate is not such a whole multiple of one-sixteenth
(1/16) of one percent (1.00%) of the offered quotation, if any, to
first class banks in the London (U.K.) interbank market by Bankers
Trust Company for United States dollar deposits of amounts in
immediately available funds comparable to the principal amount of
the LIBOR Rate Loan of BTCC for which the LIBOR Rate is being
determined with maturities comparable to the Interest Period for
which such LIBOR Rate will apply as of approximately 10:00 a.m.
Chicago time two (2) Business Days prior to the commencement of
such Interest Period.
LIBOR Rate Loan means a Revolving Loan that bears interest as
---------------
provided in Section 4.1(b) hereof.
Lien means any mortgage, pledge, lien, charge, security
-----
interest, conditional sale or other title retention agreement
(including, without limitation, any Capital Lease Obligations in
the nature thereof) or other encumbrance of any kind or
description, including, without limitation, any agreement to give
or xxxxx x Xxxx.
Line of Credit means the aggregate revolving line of credit
--------------
extended pursuant to this Credit Agreement by the Lenders to the
Borrower for Revolving Loans and Letters of Credit, in an amount up
to $58,000,000, as such amount may be reduced from time to time.
Loan Account has the meaning set forth in Section 4.7.
------------
Lockbox Agreements has the meaning set forth in Section 4.9.
------------------
Lockbox Bank has the meaning set forth in Section 4.9.
------------
Lockboxes has the meaning set forth in Section 4.9.
---------
Majority Lenders means those Lenders holding in the aggregate
----------------
more than fifty percent (50%) of the total Commitments, or if the
Commitments are terminated, those Lenders owed more than fifty
percent (50%) of the Revolving Loans and Letter of Credit
Obligations then outstanding.
Management Agreement means the Management Services Agreement
---------------------
dated as of December 4, 1991 between the Borrower and DPK, as the
same was amended and restated by the Amended and Restated
Management Services Agreement dated as of December 31, 1993 between
the Borrower and DPK and as the same may from time to time
hereafter be amended, modified or restated upon the good faith
approval, pursuant to duly adopted resolutions, of a majority of
members of the Board of Directors of the Borrower who are not
Affiliates of DPK.
Material Adverse Effect means a material adverse effect on (i)
-----------------------
the consolidated financial condition, operations, business or
prospects of the Borrower and its Subsidiaries (taken as a whole),
(ii) any Credit Party's ability to perform its obligations under
the Credit Documents to which it is a party, or (iii) the validity
or enforceability of any of the Credit Documents.
Material Subsidiary means (a) any Subsidiary of the Borrower
-------------------
if (i) the total assets of such Subsidiary (and its Subsidiaries)
exceed 10% of the total assets of the Borrower and its
Subsidiaries, determined on a consolidated basis in accordance with
GAAP, or (ii) the revenues (or losses, as the case may be) of such
Subsidiary (and its Subsidiaries) for the four consecutive fiscal
quarters of such Subsidiary most recently ended (determined on a
consolidated basis in accordance with GAAP and whether or not such
Person was a Subsidiary of the Borrower during all or any part of
the fiscal period of the Borrower referred to below) exceed an
amount equal to 10% of the revenues (or losses, as the case may be)
of the Borrower and its Subsidiaries for the four consecutive
fiscal quarters of the Borrower most recently ended (determined on
a consolidated basis in accordance with GAAP), and (b) in any event
each of (i) Sandusky Plastics of Delaware, Inc., a Delaware
corporation, (ii) Sandusky Plastics, Inc., a Delaware corporation,
(iii) Viskase Corporation, a Pennsylvania corporation, (iv) Clear
Shield National, Inc., a California corporation, (v) Viskase
Holding Corporation, a Delaware corporation, (vi) Viskase Sales
Corporation, a Delaware corporation, and (vii) Viskase, S.A., a
French corporation.
Maximum Letter of Credit Amount means an amount equal to
-------------------------------
$28,000,000.
Maximum Revolving Loan Amount means an amount equal to
-----------------------------
$30,000,000.
Multiemployer Plan means any Plan which is a "multiemployer
------------------
plan" (as such term is defined in section 4001(a)(3) of ERISA).
Net Worth means as of any date the aggregate amount of the
---------
capital, surplus and retained earnings of the Borrower and its
Subsidiaries as would be shown on a consolidated balance sheet of
the Borrower and its Subsidiaries prepared as of such date in
accordance with GAAP (and excluding minority interests); provided
that capital and surplus attributable to Redeemable Stock and
accumulated translation adjustments shall be excluded.
Note Agreement means that certain Note Agreement, of even date
--------------
herewith, among the Borrower and the purchasers named therein,
under which $160,000,000 of First Priority Notes are issued, as
modified, amended, extended, restated or supplemented from time to
time.
Notice of Borrowing means an irrevocable and binding notice
-------------------
delivered by the Borrower to the Agent either by telephone or by
facsimile transmission (and if by telephone, confirmed in writing),
of the Borrower's request for a Borrowing, which notice shall be
substantially in the form of Exhibit M.
Notice of Continuation has the meaning set forth in Section
----------------------
4.12(a).
Notice of Conversion has the meaning set forth in Section
--------------------
4.12(b).
Obligations means the unpaid principal and interest hereunder
------------
(including interest accruing on or after the occurrence of an
Insolvency Event), reimbursement obligations under Letters of
Credit, Fees, Expenses and all other obligations and liabilities of
the Borrower to the Agent, the Issuing Bank or to the Lenders under
this Credit Agreement, the Revolving Notes, or any other Credit
Document.
Offering Memorandum means the Private Placement Memorandum for
-------------------
the First Priority Notes dated February 7, 1995, as supplemented by
a Supplement to Private Placement Memorandum dated May 16, 1995,
and as further supplemented by a Final Supplement to Private
Placement Memorandum dated June 5, 1995, taken as a whole.
Original Closing Date means June 22, 1995.
---------------------
Pension Benefit Guaranty Corporation means the Pension Benefit
------------------------------------
Guaranty Corporation under ERISA (or any successor thereto).
Percentage of Total Assets Transferred means, with respect to
--------------------------------------
each asset Transferred pursuant to clause (d) of Section 8.6
(including assets Transferred pursuant to a Transfer by Merger),
the ratio (expressed as a percentage) of (a) the greater of such
asset's fair market value or the net book value of such assets on
the date of Transfer to (b) the book value of the consolidated
assets of the Borrower and its Subsidiaries as of the last day of
the fiscal quarter of the Borrower immediately preceding the date
of Transfer.
Permitted Discretion means the Agent's good faith judgment
--------------------
concerning the risks of lending to the Borrower, taking into
account (i) the liquidation value of Collateral, the priority of
the Collateral Agent's Liens therein, and the time and cost of
enforcement of such Liens and (ii) the perceived accuracy of the
Borrower's financial and Collateral reporting. The burden of
establishing lack of good faith shall be on the Borrower.
Permitted Liens in respect of any Person shall mean (i)
---------------
pledges or deposits made by such Person under workers'
compensation, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts
(other than contracts for the payment of money) or operating leases
to which such Person is a party, or deposits to secure statutory or
regulatory obligations of such Person or deposits of cash or U.S.
Government Obligations to secure surety or appeal bonds to which
such Person is a party, or deposits as security for contested taxes
or import duties or for the payment of rent, in each case incurred
in the ordinary course of business; (ii) Liens arising by operation
of law such as carriers', warehousemen's and mechanics' Liens, in
each case arising in the ordinary course of business and with
respect to amounts not yet due or being contested in good faith by
appropriate legal proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate provision,
if any, as shall be required in conformity with GAAP shall have
been made; (iii) Liens for taxes not yet subject to penalties for
non-payment or which are being contested in good faith and by
appropriate legal proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate provision,
if any, as shall be required in conformity with GAAP shall have
been made; (iv) Liens evidenced by the Capital Lease Obligations
under GECC Lease Documents and Liens securing Debt of the Borrower
or its Subsidiaries permitted under Section 8.3(a)(vi) for
refinancing the Debt under the GECC Lease Documents; provided, that
in connection with any such refinancing any such new Lien shall be
limited to all or part of the same Property to which the original
Lien applied; (v) minor survey exceptions, minor encumbrances,
easements or reservations of, or rights of others for, rights of
way, sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to the
use of real property or Liens incidental to the conduct of the
business of such Person or to the ownership of its Property which
were not incurred in connection with Debt or other extensions of
credit and which do not in the aggregate materially adversely
affect the value of said Property or materially impair the use of
such Property in the operation of the business of such Person; (vi)
Liens in favor of the Collateral Agent to secure Debt permitted
under Sections 8.3(a)(i), (iv), (v) and (vii); (vii) Liens existing
on the Original Closing Date and described on Schedule C, Part 8.4
hereto; (viii) Liens arising out of judgments or awards against
such Person not giving rise to an Event of Default under Section
9.1(i) (but without limiting Section 9.1(m)) with respect to which
such Person is diligently prosecuting an appeal or other
proceedings for review; (ix) Liens to secure Debt permitted under
Section 8.4(a)(xi); provided, that any such new Lien shall be
limited to all or part of the same Property to which the original
Lien applied; (x) Liens to secure Debt permitted under Section
8.4(a)(xiii) (to the extent such Liens attach prior to or at the
time of incurrence of such Debt); (xi) Liens to secure Debt (if
any) permitted under Section 8.4(a)(iii); provided, that (a) the
Lien securing such Debt is granted only to the Collateral Agent and
made subject to the Collateral Agency Agreement, and (b) the
Collateral Agency Agreement is amended to the reasonable
satisfaction of the Collateral Agent, the Agent and the Lenders to
add the Second Priority Notes Indenture Trustee as a party thereto,
and to provide for such matters incidental thereto as the
Collateral Agent, the Agent and the Lenders may reasonably require;
and (xii) Liens securing Debt of Wholly-Owned Subsidiaries of the
Borrower to the Borrower or another such Wholly-Owned Subsidiary
permitted under Section 8.4(a)(ix).
Person means any individual, sole proprietorship, partnership,
------
joint venture, trust, unincorporated organization, association,
corporation, institution, entity, party or government (including
any division, agency or department thereof), and its successors,
heirs and assigns.
Plan means any "employee pension benefit plan" (as such term
----
is defined in Section 3(2) of ERISA) which is or has been
established or maintained, or to which contributions are or have
been made, by the Borrower or any member of a Control Group.
Pledge Agreements means, collectively, each Pledge Agreement
-----------------
executed at any time in favor of the Collateral Agent by the
Borrower or any of its Subsidiaries, substantially in the form of
Exhibit F, as modified, amended, extended, restated or supplemented
from time to time.
Prime Lending Rate means the rate which Bankers Trust Company
------------------
announces as its prime lending rate, from time to time. The Prime
Lending Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer. Bankers
Trust Company and each of the Lenders may make commercial loans or
other loans at rates of interest at, above or below the Prime
Lending Rate.
Prime Rate Loan means a Revolving Loan that bears interest as
---------------
provided in Section 4.1(a) hereof.
Property means, with respect to any Person, any interest of
--------
such Person in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, including, without
limitation, Capital Stock in any other Person.
Proportionate Share of a Lender means a fraction, expressed as
-------------------
a percentage, obtained by dividing its Commitment by the Line of
Credit or, if the Commitments are terminated, by dividing its then
outstanding Revolving Loans and Letter of Credit participation by
the then outstanding aggregate Revolving Loans and Letter of Credit
Obligations.
Prudential means The Prudential Insurance Company of America.
----------
Prudential Revolving Credit Agreement means that certain
-------------------------------------
Revolving Credit Agreement dated as of the Original Closing Date
between the Borrower and Prudential.
Purchase Money Indebtedness means, as to any Person, the Debt
---------------------------
of such Person incurred and owing in respect of all or part of the
purchase price of Property purchased where such Debt is fully
secured by the Property purchased.
Qualified Plan means any Plan, other than a Multiemployer
--------------
Plan, which is intended to meet the qualification requirements of
Section 4.01(a) the Internal Revenue Code.
Redeemable Stock means, with respect to any Person, any class
----------------
or series of Capital Stock that, either by its terms, by the terms
of any security into which it is convertible or exchangeable by
contract or otherwise, is or upon the happening of an event or the
passage of time would be, required to be redeemed or is redeemable
at the option of the holder thereof at any time prior to the stated
maturity of the principal of the First Priority Notes, or, at the
option of the holder thereof, is convertible into or exchangeable
for debt securities maturing at any time prior to the stated
maturity of the principal of the First Priority Notes.
Register has the meaning set forth in Section 11.8.
--------
Registered Exchange Offer means the offer to exchange the
-------------------------
Series B First Priority Notes for all of the outstanding Series A
First Priority Notes and the Series D First Priority Notes for all
of the outstanding Series C First Priority Notes, in each case in
accordance with the Registration Rights Agreement.
Registration Rights Agreement means the Exchange and
-----------------------------
Registration Rights Agreement of even date herewith by and between
the Borrower and the holders of the First Priority Notes, as
modified, amended, extended, restated or supplemented from time to
time.
Related Transaction Documents means the First Priority Notes
-----------------------------
Documents, the Second Priority Notes Documents, the Prudential
Revolving Credit Facility Documents, the GECC Lease Documents, the
Collateral Agency Agreement and the GECC Intercreditor Agreements.
Requirement of Law means any law, treaty, rule or regulation
-------------------
or determination of an arbitrator, court or other Governmental
Authority.
Responsible Officer means, with respect to any corporation,
-------------------
the chief executive officer, chief operating officer, chief
financial officer, treasurer or chief accounting officer of such
corporation, or any other officer of the corporation involved
principally in its financial administration or its controller
function.
Restricted Debt means all Consolidated Debt other than
---------------
Consolidated Senior Debt.
Restricted Investment shall have the meaning given to such
---------------------
term in Section 8.2.
Restricted Payments shall have the meaning given to such term
-------------------
in Section 8.2.
Revolver Unused Line Fee has the meaning set forth in Section
------------------------
4.2.
Revolving Loans has the meaning set forth in Section 3.1.
---------------
Revolving Loan Request means each request for a Revolving Loan
----------------------
deemed to be made by the Borrower pursuant to Section 3.3 to
provide funds to reimburse the Issuing Bank for a draw under a
Letter of Credit.
Revolving Note means a promissory note of the Borrower payable
--------------
to the order of any Lender, substantially in the form of Exhibit G.
Sale and Leaseback Transaction means, with respect to any
------------------------------
Person, any direct or indirect arrangement pursuant to which
Property is sold by such Person or a Subsidiary of such Person and
thereafter leased back from the purchaser thereof by such Person or
one of the Subsidiaries of such Person.
SEC means the Securities and Exchange Commission, as from time
---
to time constituted, or any similar agency then having jurisdiction
to enforce the Securities Act.
Second Priority Notes means the debt securities which may be
---------------------
issued by the Borrower pursuant to the Second Priority Notes
Indenture pursuant to the 10.25% Note Exchange.
Second Priority Notes Documents means, collectively, the
-------------------------------
Second Priority Notes Indenture and all other documents,
instruments, agreements, opinions and certificates now or hereafter
executed and/or delivered pursuant thereto or in connection
therewith or in connection with the sale or exchange of the Second
Priority Notes, as modified, amended, extended, restated or
supplemented from time to time.
Second Priority Notes Indenture means the indenture between
-------------------------------
the Borrower and the Second Priority Notes Indenture Trustee under
which any Second Priority Notes or Subsequent Second Priority Notes
are issued, as amended, supplemented or otherwise modified from
time to time.
Second Priority Notes Indenture Trustee means the trustee for
---------------------------------------
the Second Priority Notes and the Subsequent Second Priority Notes
(in such capacity), and each successor thereto in such capacity.
Securities Act means the Securities Act of 1933, as amended
--------------
from time to time, and the rules and regulations of the SEC
promulgated thereunder.
Security Agreements means, collectively, each Security
-------------------
Agreement executed at any time in favor of the Collateral Agent by
the Borrower or any of its Subsidiaries, substantially in the form
of Exhibit H, as modified, amended, extended, restated or
supplemented from time to time.
Series A First Priority Notes means the 12% First Priority
-----------------------------
Senior Secured Notes due 2000, Series A, being issued pursuant to
the First Priority Notes Indenture.
Series B First Priority Notes means the 12% First Priority
-----------------------------
Senior Secured Notes due 2000, Series B (the terms of which are
identical to the Series A First Priority Notes except that the
Series B First Priority Notes shall be registered under the
Securities Act, and shall not contain the restrictive legend
appearing on the face of the form of the Series A First Priority
Notes), to be issued in exchange for the Series A First Priority
Notes pursuant to the Registered Exchange Offer and the First
Priority Notes Indenture.
Series C First Priority Notes means the Floating Rate First
-----------------------------
Priority Senior Secured Notes due 2000, Series C, being issued
pursuant to the First Priority Notes Indenture.
Series D First Priority Notes means the Floating Rate First
-----------------------------
Priority Senior Secured Notes due 2000, Series D (the terms of
which are identical to the Series C First Priority Notes except
that the Series D First Priority Notes shall be registered under
Securities Act and shall not contain the restrictive legend
appearing on the face of the form of the Series C First Priority
Notes), to be issued in exchange for the Series C First Priority
Notes pursuant to the Registered Exchange Offer and the First
Priority Notes Indenture.
Settlement Date has the meaning set forth in Section 3.4.
---------------
Settlement Period has the meaning set forth in Section 3.4.
-----------------
Significant Domestic Subsidiary means each Domestic Subsidiary
-------------------------------
that, at any time, is a Material Subsidiary.
Stipulated Loss Value means the "Stipulated Loss Value," as
---------------------
defined in the GECC Lease Documents as in effect on the Original
Closing Date.
Subsequent First Priority Notes means any and all debt
-------------------------------
securities issued by the Borrower in exchange for any First
Priority Notes and having terms identical to the First Priority
Notes and otherwise being the same as the First Priority Notes
except that such debt securities are registered under the
Securities Act.
Subsequent Second Priority Notes means any and all debt
--------------------------------
securities issued by the Borrower under an indenture in exchange
for any Second Priority Notes and having terms identical to the
Second Priority Notes and otherwise being the same as the Second
Priority Notes except that such debt securities are registered
under the Securities Act.
Subsidiary means, with respect to any Person, (i) a
----------
corporation a majority of whose Voting Securities is at the time
directly or indirectly owned or Controlled by such Person, by one
or more Subsidiaries of such Person or by such Person and one or
more Subsidiaries thereof, or (ii) any other Person (other than a
corporation) in which such Person, one or more Subsidiaries thereof
or such Person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof has at least a
majority ownership interest with respect to voting in the election
of directors or trustees thereof (or such other Persons performing
similar functions). For purposes of this definition, any
directors' qualifying shares shall be disregarded in determining
the ownership of a Subsidiary.
10.25% Note Exchange means an exchange by the Borrower
--------------------
pursuant to which the Borrower issues Second Priority Notes in an
aggregate face amount of not more than $50,000,000 in exchange for
10.25% Notes pursuant to an exchange ratio (based on aggregate face
amount) of no greater than 1:1.
10.25% Notes means, collectively, the 10.25% Senior Notes due
------------
2001 issued by the Borrower pursuant to the 10.25% Notes Indenture.
10.25% Notes Indenture means that certain Indenture, dated as
----------------------
of December 31, 1993, between the Borrower and Bankers Trust
Company, as trustee, as amended, supplemented or otherwise modified
from time to time.
Termination Event means any one or more of the following event
-----------------
of events which, either individually or together with any other
such event or events, could reasonably be expected to have a
Material Adverse Effect:
(i) A reportable event as defined in Section 4043 of
ERISA and regulations issued thereunder for which the 30 day
notice requirement has not been waived occurs with respect to
any Title IV Plan other than those described in Sections
4043(c)(9) and (11) of ERISA (or Pension Benefit Guaranty
Corporation Regulation Sections 2615.22 or 2615.23);
(ii) There occurs (a) the complete or partial
withdrawal (as defined in Sections 4203 and 4205 of ERISA) by
the Borrower or any member of the Control Group from any
Multiemployer Plan, or (b) the receipt by the Borrower or any
member of the Control Group of a demand from any Multiemployer
Plan for withdrawal liability (as defined in Section 4201 of
ERISA);
(iii) The Borrower or any member of the Control Group
files, or is reasonably expected to file, a notice of intent
to terminate any Title IV Plan or adopts a plan amendment that
constitutes a termination of any Title IV Plan under Section
4041 of ERISA;
(iv) There occurs any action causing the termination
of any Multiemployer Plan under Section 4041A of ERISA;
(v) Any other event or condition occurs that is
reasonably expected to constitute grounds under Sections 4041A
or 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Title IV Plan or any
Multiemployer Plan;
(vi) The Pension Benefit Guaranty Corporation shall
have notified the Borrower or any member of the Control Group
that a Plan may become a subject to any proceedings under
Section 4042 of ERISA to terminate or appoint a trustee to
administer the Plan, or any such proceedings are instituted;
(vii) An accumulated funding deficiency (as defined in
Section 302 of ERISA or Section 412 of the Internal Revenue
Code) exists with respect to any Title IV Plan on the last day
of any plan year;
(viii) A waiver of the minimum funding standards of
ERISA or the Internal Revenue Code, or any extension of any
amortization period related to such waiver, is sought by or
granted to, the Borrower or any member of the Control Group,
under Section 412 of the Internal Revenue Code;
(ix) The Borrower or any member of the Control Group
shall have incurred, or is reasonably expected to incur, any
liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Internal Revenue Code relating to
employee benefit plans;
(x) As of the last day of any plan year, there exists
unfunded benefit liabilities (within the meaning of Section
4001(a)(18) of ERISA) of any Title IV Plan, as determined by
such Plan's independent actuaries;
(xi) As of the last day of any plan year, there exists
unfunded benefit liabilities (within the meaning of Section
4001(a)(18) of ERISA) of all Title IV Plans, as determined by
such Plans' independent actuaries; or
(xii) The Borrower or any member of the Control Group
establishes or amends any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides post-
employment welfare benefits in a manner that would increase
the liability of the Borrower or any member of the Control
Group.
Title IV Plan means any Qualified Plan that is a defined
-------------
benefit plan (as defined in Section 3(35) of ERISA) and is subject
to Title IV of ERISA.
Transfer means any sale, exchange, conveyance, lease, transfer
--------
or other disposition.
Transfer by Merger means, with respect to any Subsidiary of
------------------
the Borrower, a merger or consolidation of such Subsidiary with
another Person such that after giving effect thereto the surviving
entity is no longer a Subsidiary of the Borrower.
Type means a LIBOR Rate Loan or a Prime Rate Loan.
----
Unused Line Fees has the meaning set forth in Section 4.2.
----------------
U.S. Government Obligations means (i) any direct non-callable
---------------------------
obligation of, or obligation guaranteed by, the United States of
America for the payment of which the full faith and credit of the
United States of America is pledged and which is not callable at
the issuer's option, and (ii) any depository receipt issued by a
bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt;
provided, that (except as required by law) such custodian is not
---------
authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the
specific payment of interest on or principal of the U.S. Government
Obligation evidenced by such depository receipt.
Voting Securities means, with respect to any Person,
-----------------
securities of any class or classes of Capital Stock in such Person
entitling the holders thereof, under ordinary circumstances and in
the absence of contingencies, to vote for members of the Board of
Directors of such Person (or Persons performing functions
equivalent to those of such members).
Wholly Owned Subsidiary of a Person means any Subsidiary of
-----------------------
such Person 100% of the total Capital Stock of which, other than
directors' qualifying shares, is at the time owned by such Person
and/or one or more Wholly Owned Subsidiaries of such Person.
1.2 Accounting Terms and Determinations. Unless otherwise
-----------------------------------
defined or specified herein, all accounting terms used in this
Credit Agreement shall be construed in accordance with GAAP,
applied on a basis consistent in all material respects with the
Financial Statements delivered to the Agent on or before the
Closing Date. All accounting determinations for purposes of
determining compliance with the financial covenants contained in
Article 8 shall be made in accordance with GAAP as in effect on the
Closing Date and applied on a basis consistent in all material
respects with the audited Financial Statements delivered to the
Agent on or before the Closing Date. The Financial Statements
required to be delivered hereunder from and after the Closing Date,
and all financial records, shall be maintained in accordance with
GAAP. If GAAP shall change from the basis used in preparing the
audited Financial Statements delivered to the Agent on or before
the Closing Date, the certificates required to be delivered
pursuant to Section 7.1 demonstrating compliance with the covenants
contained herein shall include, at the election of the Borrower or
upon the request of the Majority Lenders, calculations setting
forth the adjustments necessary to demonstrate how the Borrower is
in compliance with the financial covenants based upon GAAP as in
effect on the Closing Date.
1.3 Other Terms; Headings. Terms used herein that are
---------------------
defined in the Uniform Commercial Code in effect in the State of
Illinois (the "Code") shall have the meanings given in the Code.
Each of the words "hereof," "herein," and "hereunder" refer to this
Credit Agreement as a whole. An Event of Default shall "continue"
or be "continuing" until such Event of Default has been waived in
accordance with Section 11.11 hereof. References to Articles,
Sections, Annexes, Schedules, and Exhibits are internal references
to this Credit Agreement, and to its attachments, unless otherwise
specified. The headings and the Table of Contents are for
convenience only and shall not affect the meaning or construction
of any provision of this Credit Agreement.
ARTICLE 2. LETTERS OF CREDIT.
-----------------
2.1 Issuance of Letters of Credit. Subject to the terms
-----------------------------
and conditions hereunder and in reliance on the representations and
warranties of the Borrower set forth herein, the Agent shall cause
the Issuing Bank to issue Letters of Credit hereunder at the
request of the Borrower and for its account on behalf of it or any
of the Significant Domestic Subsidiaries, as more specifically
described below. The Agent shall not be obligated to cause the
Issuing Bank to issue any Letter of Credit if:
(a) Issuance of the requested Letter of Credit would cause
(i) the Letter of Credit Obligations then outstanding to exceed the
Maximum Letter of Credit Amount or (ii) the sum of the Revolving
Loans plus the Letter of Credit Obligations then outstanding to
exceed the lesser at such time of (x) the Line of Credit or (y) the
Borrowing Base; or
(b) Issuance of the Letter of Credit is enjoined,
restrained or prohibited by any Governmental Authority, any
Requirement of Law or any request or directive of any Governmental
Authority (whether or not having the force of law) or would impose
upon the Agent, any of the Lenders or the Issuing Bank any material
restriction, reserve, capital requirement, loss, cost or expense
(for which the Agent, such Lender or the Issuing Bank is not
otherwise compensated) not in effect or known as of the Closing
Date.
2.2 Terms of Letters of Credit. The proposed amount,
--------------------------
terms and conditions, and form of each Letter of Credit (and of any
drafts or acceptances thereunder) shall be subject to approval by
the Issuing Bank. The term of each standby Letter of Credit shall
not exceed 360 days, but may be subject to annual renewal. The
term of each documentary Letter of Credit shall not exceed 120
days. No Letter of Credit shall have an expiry date later than
June 15, 1998.
2.3 Notice of Issuance. A request for issuance of a
------------------
Letter of Credit (a "Letter of Credit Request") must be delivered
to the Agent in writing in the form of Exhibit I. The Borrower
shall specify in each Letter of Credit Request whether the
conditions for the issuance of a Letter of Credit specified in
Section 5.2 are satisfied. A Letter of Credit Request must be
received by the Agent no later than 1:00 P.M. Chicago time at least
three (3) Business Days (or such shorter period as may be agreed to
by the Issuing Bank) in advance of the proposed date of issuance.
The Borrower shall provide to the Agent a list, with specimen
signatures, of officers authorized to request Letters of Credit.
The Agent is entitled to rely upon such list until it is replaced
by the Borrower.
2.4 Lenders' Participation. Immediately upon issuance or
----------------------
amendment of any Letter of Credit, each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from
the Issuing Bank, without recourse or warranty, an undivided
interest and participation in all rights and obligations under such
Letter of Credit including, without limitation, the Borrower's
reimbursement obligation thereunder (other than fees and other
amounts owing to the Issuing Bank) in accordance with such Lender's
Proportionate Share.
2.5 Payments of Amounts Drawn Under Letters of Credit. The
-------------------------------------------------
Agent shall notify the Borrower of the receipt of notice from the
Issuing Bank that the Issuing Bank has received a draft or other
presentation for payment or drawing under a Letter of Credit not
later than 11:00 a.m. (Chicago time) on the Business Day
immediately prior to the date on which the Issuing Bank intends to
honor such drawing. Unless the procedures set forth in Section
9.2(c) shall be applicable or the Borrower shall have reimbursed
the Issuing Bank in full for such drawing by 2:00 p.m. (Chicago
time) on the Business Day on which the Issuing Bank honors such
draw, the Borrower shall be deemed to have concurrently requested
Lenders to make a Revolving Loan pursuant to Section 3.1 in the
amount of such drawing on the date on which the Issuing Bank honors
the drawing, the proceeds of which shall be applied directly by the
Agent to reimburse the Issuing Bank for the amount of such drawing.
2.6 Payment by Lenders. If a Revolving Loan is not made
------------------
in an amount sufficient to reimburse the Issuing Bank in full for
the amount of any draw, the Agent shall promptly notify each Lender
of the unreimbursed amount of such drawing and of such Lender's
respective participation therein. Each Lender shall make available
to the Agent, for the account of the Issuing Bank, the amount of
its participation in immediately available funds not later than
1:00 P.M. Chicago time on the next Business Day after such Lender
receives notice from the Agent of the amount of such Lender's
participation in such unreimbursed amount. The obligation of each
Lender to deliver to Agent an amount equal to its respective
participation shall be absolute and unconditional and such
remittance shall be made notwithstanding the occurrence or
continuation of a Default or an Event of Default or the failure to
satisfy any of the conditions set forth in Section 5.2. If any
Lender fails to make available to the Agent the amount of such
Lender's participation, the Issuing Bank shall be entitled to
recover such amount on demand from such Lender together with
interest at the Federal Funds Rate for the first three Business
Days and thereafter at the Prime Lending Rate. For each Letter of
Credit, the Agent shall promptly distribute to each Lender which
has funded the amount of its participation its Proportionate Share
of all payments subsequently received by the Agent from the
Borrower in reimbursement of honored drawings. All amounts paid by
the Issuing Agent with respect to any Letter of Credit that are not
immediately repaid with the proceeds of a Revolving Loan or
otherwise shall bear interest at the interest rate applicable to
Revolving Loans.
2.7 Nature of Issuing Bank's Duties. In determining
-------------------------------
whether to pay under any Letter of Credit, the Issuing Bank shall
be responsible only to determine that the documents and
certificates required to be delivered under that Letter of Credit
have been delivered and that they comply on their face with the
requirements of that Letter of Credit. As among the Borrower, the
Issuing Bank and each other Lender, and except to the extent
provided in the following sentence, the Borrower assumes all risks
of the acts and omissions of the Issuing Bank, or misuse of the
Letters of Credit by the respective beneficiaries of such Letters
of Credit. Any action taken or omitted to be taken by the Issuing
Bank under or in connection with any Letter of Credit, if taken or
omitted in the absence of gross negligence or willful misconduct,
shall not create for the Issuing Bank any liability to the
Borrower, the Agent or any Lender. In furtherance and not in
limitation of the foregoing, neither the Issuing Agent, the Agent
nor any Lender shall be responsible: (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
by any party in connection with the application for and issuance of
any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) for failure of the beneficiary of
any Letter of Credit to comply fully with conditions required in
order to demand payment under such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or
delivery of any message, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) for errors in
interpretation of technical terms; (vi) for any loss or delay in
the transmission or otherwise of any document required in order to
make a payment under any Letter of Credit or of the proceeds
thereof; (vii) for the credit of the proceeds of any drawing under
any Letter of Credit; and (viii) for any consequences arising from
causes beyond the control of the Issuing Agent, the Agent or any
Lender.
2.8 Obligations Absolute. The obligations of the Borrower
--------------------
to reimburse the Issuing Bank, the Agent and the Lenders for
drawings honored under the Letters of Credit and the obligations of
the Lenders under Section 2.6 hereof shall be unconditional and
irrevocable, without requirement of presentment, demand, protest or
other formalities of any kind, and shall be paid strictly in
accordance with the terms of this Credit Agreement under all
circumstances including the following circumstances:
(1) any lack of validity or enforceability of any
Letter of Credit or any other agreement;
(2) the existence of any claim, set-off, defense or
other right which the Borrower, any of its Subsidiaries, any of
their Affiliates, the Issuing Agent, the Agent or any Lender may at
any time have against a beneficiary or any transferee of any Letter
of Credit (or any persons or entities for whom any such transferee
may be acting), the Issuing Agent, the Agent, any Lender or any
other Person, whether in connection with this Credit Agreement, the
transactions contemplated herein or any unrelated transaction
(including any underlying transaction between Borrower, any of its
Subsidiaries, any of their Affiliates and the beneficiary for which
the Letter of Credit was procured);
(3) any draft, demand, certificate or any other
document presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(4) payment by the Issuing Agent under any Letter of
Credit against presentation of a demand, draft or certificate or
other document which does not comply with the terms of such Letter
of Credit;
(5) any other circumstance or happening whatsoever,
which is similar to any of the foregoing; or
(6) the fact that a Default or an Event of Default
shall have occurred and be continuing.
2.9 Agent's Execution of Applications and Other Issuing
---------------------------------------------------
Bank Documentation; Reliance on Credit Agreement by Issuing Bank.
----------------------------------------------------------------
The Agent shall be authorized to execute, deliver and perform on
behalf of the Lenders such letter of credit applications, shipping
indemnities, letter of credit modifications and consents and other
undertakings for the benefit of the Issuing Bank as may be
reasonably necessary or appropriate in connection with the issuance
or modification of Letters of Credit requested by the Borrower
hereunder. The Lenders, the Agent and the Borrower all expressly
agree that the terms of this Article 2 and various other provisions
of this Credit Agreement identifying the Issuing Bank are also
intended to benefit the Issuing Bank and the Issuing Bank shall be
entitled to enforce the provisions hereof which are for its
benefit.
2.10 Additional Payments. If by reason of (a) any change
-------------------
in any Requirement of Law, or any change in the interpretation or
application by any Governmental Authority of any Requirement of
Law, or (b) compliance by the Issuing Bank or any Lender with any
direction, request or requirement (whether or not having the force
of law) of any Governmental Authority (or monetary authority)
including, without limitation, Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in
effect (and any successor thereto):
(i) any reserve, deposit or similar requirement is or
shall be applicable, imposed or modified in respect of any
Letters of Credit issued by the Issuing Bank or participation
therein purchased by any Lender; or
(ii) there shall be imposed on the Issuing Bank or
any Lender any other condition regarding this subsection 2.10,
any Letter of Credit or any participation therein;
and the result of the foregoing is to directly or indirectly
increase the cost to the Issuing Bank or any Lender of
issuing, making or maintaining any Letter of Credit or of
purchasing or maintaining any participation therein, or to
reduce the amount receivable in respect thereof by the Issuing
Bank or any Lender, then and in any such case the Agent or
such Lender may, at any time within a reasonable period after
the additional cost is incurred or the amount received is
reduced, notify the Borrower, and the Borrower shall pay on
demand such amounts as the Agent or such Lender may specify to
be necessary to compensate the Issuing Bank or such Lender for
such additional cost or reduced receipt, together with
interest on such amount from 10 days after the date of such
demand until payment in full thereof at a rate equal at all
times to the Prime Lending Rate per annum. The determination
by the Issuing Bank or any Lender, as the case may be, of any
amount due pursuant to this Section, as set forth in a
certificate setting forth the calculation thereof in
reasonable detail, shall, in the absence of manifest or
demonstrable error, be final and conclusive and binding on all
of the parties hereto.
ARTICLE 3. REVOLVING LOANS.
---------------
3.1 Revolving Credit Commitments. Subject to the terms
----------------------------
and conditions set forth in this Credit Agreement, on and after the
Closing Date and to and excluding the Expiration Date, each Lender
severally agrees to make loans and advances to the Borrower (the
"Revolving Loans") in an amount not to exceed at any time its
Proportionate Share of the lesser of the Line of Credit then in
effect, and the Borrowing Base then in effect, minus, in each case,
the sum of the then outstanding Letter of Credit Obligations
(excluding any portion of the Letter of Credit Obligations to be
repaid with the Revolving Loan being funded; provided, that, (i) no
Lender shall be required to make any Revolving Loan to the extent
the making of such Loan would cause the aggregate outstanding
principal balance of the Revolving Loans to exceed the Maximum
Revolving Loan Amount.
3.2 Borrowing of Revolving Loans. Revolving Loans may be
----------------------------
made available to the Borrower directly by the Lenders ("Lender
Advances") or, in the circumstances described in Section 3.2(b),
from the Agent acting on behalf of the Lenders ("Agent Advances").
(a) Lender Advances. Subject to the determination by the
---------------
Agent and the Lenders that the conditions for borrowing
contained in Section 5.2 are satisfied, upon receipt of a
Notice of Borrowing from the Borrower received by the Agent
before noon Chicago time on a Business Day, Lender Advances of
Revolving Loans may be made to the extent of each Lender's
Proportionate Share of the requested Borrowing. Each Notice
of Borrowing shall specify whether the requested Borrowing is
of Prime Rate Loans or LIBOR Rate Loans.
(b) Agent Advances. The Agent is authorized by the
--------------
Lenders, but is not obligated, to make Agent Advances upon a
receipt of any Notice of Borrowing received by the Agent
before 2:00 P.M. Chicago time on a Business Day. Agent
Advances shall be subject to periodic settlement with the
Lenders under Section 2.4. Agent Advances may be made only in
the following circumstances:
(i) Normal Course Agent Advances. For administrative
----------------------------
convenience, the Agent may, but is not obligated, to make
Agent Advances up to the amount available for borrowing
under Section 3.1 in reliance upon the actual or deemed
representations of the Borrower under Section 5.2 that
the conditions for borrowing are satisfied.
(ii) Other Agent Advances. When the conditions for
---------------------
borrowing under Section 5.2 cannot be fulfilled, and
notwithstanding the Borrowing Base limitation of Section
3.1, the Agent may, but is not obligated, to continue to
make Agent Advances for seven (7) Business Days or until
sooner instructed by the Majority Lenders to cease, in an
aggregate amount at any time not to exceed $2,000,000.
(c) Disbursement of Revolving Loans. The proceeds of
-------------------------------
Revolving Loans shall be transmitted: (x) in the circumstances
described in Section 2.5, by the Agent directly to the Issuing
Bank, and (y) in all other circumstances, by the Agent or Lenders,
as the case may be.
(d) Notices of Borrowing. Notices of Borrowing may be
--------------------
given under this Section by telephone or facsimile transmission,
and, if by telephone, promptly confirmed in writing. The Borrower
shall specify in each Notice of Borrowing whether the conditions
for the requested Borrowing are satisfied. The Borrower may
request one or more Borrowings of Revolving Loans constituting
Prime Rate Loans on the same Business Day. Each Notice of
Borrowing for LIBOR Rate Loans shall be given not later than noon
Chicago time on the third Business Day prior to the proposed
Borrowing. Each Notice of Borrowing shall, unless otherwise
specifically provided herein, consist entirely of Revolving Loans
of the same Type and, if such Borrowing is to consist of LIBOR Rate
Loans, shall be in an aggregate amount of not less than $5,000,000
or an integral multiple of $1,000,000 in excess thereof. The right
of the Borrower to choose LIBOR Rate Loans is subject to the
provisions of Section 4.12. Once given, a Notice of Borrowing is
irrevocable by and binding on the Borrower. The Borrower shall
provide to the Agent a list, with specimen signatures, of officers
authorized to request Revolving Loans. The Agent is entitled to
rely upon such list until it is replaced by the Borrower.
3.3 Notice of Request for Lender Advances. Subject to the
-------------------------------------
last sentence of this Section, the Agent shall give each Lender
prompt notice by telephone or facsimile transmission of a Notice of
Borrowing that is received pursuant to Section 3.2(a) and is to be
satisfied by Lender Advances. No later than 3:00 P.M. Chicago time
on the date of receipt of such notice, each Lender shall make
available for the account of its Applicable Lending Office to the
Agent at the Agent's address for deposit into the Loan Disbursement
Account, its Proportionate Share of such Borrowing in immediately
available funds. Unless the Agent receives contrary written notice
prior to any such Borrowing, it is entitled to assume that each
Lender will make available its Proportionate Share of the Borrowing
and in reliance upon that assumption, but without any obligation to
do so, may advance such Proportionate Share on behalf of the
Lender, without the necessity of giving daily notice to each Lender
of the receipt of a Notice of Borrowing.
3.4 Periodic Settlement of Agent Advances; Interest and
---------------------------------------------------
Fees; Statements.
----------------
(a) The Settlement Date; Allocation of Interest and Fees.
----------------------------------------------------
The amount of each Lender's Proportionate Share of Revolving Loans
shall be computed weekly (or more frequently in the Agent's
discretion) and shall be adjusted upward or downward based on all
Revolving Loans (including Agent Advances) and repayments received
by the Agent as of 5:00 P.M. Chicago time on the last Business Day
of the period specified by the Agent (such date, the "Settlement
Date").
(b) Summary Statements; Settlements. The Agent shall
-------------------------------
deliver to the Borrower and each of the Lenders promptly after the
Settlement Date a summary statement of the account of outstanding
Loans (including Agent Advances) for the period, the amount of
repayments received for the period, and the amount allocated to
each Lender of the interest and Unused Line Fees for the period.
After application of payments under Section 4.10, as reflected on
the summary statement: (i) the Agent shall transfer to each Lender
its allocated share of interest and Unused Line Fees, and its
Proportionate Share of repayments; and (ii) each Lender shall
transfer to the Agent, or the Agent shall transfer to each Lender,
such amounts as are necessary to insure that, after giving effect
to all such transfers, the amount of Revolving Loans made by each
Lender shall be equal to such Lender's Proportionate Share of the
aggregate amount of Revolving Loans outstanding as of such
Settlement Date. If the summary statement requires transfers to be
made to the Agent by the Lenders and is received by the Lenders
prior to 12:00 noon Chicago time on a Business Day, such transfers
shall be made in immediately available funds no later than 3:00
P.M. Chicago time that day; and, if received after 12:00 noon
Chicago time, then no later than 3:00 P.M. Chicago time on the next
Business Day. The obligation of each Lender to transfer such funds
is irrevocable, unconditional and without recourse to or warranty
by the Agent.
(c) Distribution of Interest and Unused Line Fees.
---------------------------------------------
Interest on the Revolving Loans (including Agent Advances) and the
Unused Line Fees shall be allocated by the Agent to each Lender (i)
in the case of interest, in accordance with the Revolving Loans
actually advanced by and repaid to such Lender and (ii) in the case
of the Unused Line Fees, in accordance with the Proportionate Share
of such Lender. Interest shall accrue from and including the date
Revolving Loans are advanced and to but excluding the date such
Revolving Loans are either repaid by the Borrower or, if later,
actually settled under this Section. Promptly after the end of
each month, the Agent shall distribute to each Lender its portion,
allocated as provided above, of the interest and Unused Line Fees
which has accrued during such month.
3.5 Sharing of Payments. If any Lender shall obtain any
-------------------
payment (whether made voluntarily or involuntarily, or through the
exercise of any right of set-off, or otherwise) on account of the
Revolving Loans made by it or its participation in the Letter of
Credit Obligations in excess of its Proportionate Share of payments
on account of the Revolving Loans or Letter of Credit Obligations
obtained by all the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in the Revolving Loans
made by them or in their participation in Letters of Credit as
shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, that if all or
any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be
rescinded and each such Lender shall repay to the purchasing Lender
the purchase price to the extent of such recovery, together with an
amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing
Lender in respect to the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 3.5, to the fullest extent
permitted by law, may exercise all of its rights of payment
(including the right of set-off) with respect to such participation
as fully as if such Lender were the direct creditor of the Borrower
in the amount of such participation.
3.6 Defaulting Lenders.
------------------
(a) A Lender who fails to pay the Agent its Proportionate
Share of any Revolving Loans (including Agent Advances) made
available by the Agent on such Lender's behalf, or who fails to pay
any other amounts owing by it to the Agent, is a "Defaulting
Lender." The Agent is entitled to recover from such Defaulting
Lender all such amounts owing by such Defaulting Lender on demand.
If the Defaulting Lender does not pay such amounts on the Agent's
demand, the Agent shall promptly notify the Borrower and the
Borrower shall pay such amounts within five (5) Business Days of
its receipt of such notice. In addition, the Defaulting Lender or
the Borrower shall pay to the Agent for its own account interest on
such amount for each day from the date it was made available by the
Agent to the Borrower to the date it is recovered by the Agent at
a rate per annum equal to (x) the overnight Federal Funds Rate, if
paid by the Defaulting Lender, or (y) the then applicable rate of
interest calculated under Section 4.1, if paid by the Borrower;
plus, in each case, the Expenses and losses, if any, incurred as a
result of the Defaulting Lender's failure to perform its
obligations. Nothing herein shall be deemed to relieve any Lender
of its obligation to fulfill its commitments hereunder or to
prejudice any rights which the Borrower may have against any Lender
as a result of any default by such Lender hereunder, including,
without limitation, the right of the Borrower to seek reimbursement
from any Defaulting Lender for any amounts paid by the Borrower
under clause (y) above on account of such Defaulting Lender's
default.
(b) The failure of any Lender to fund its Proportionate
Share of a Revolving Loan shall not relieve any other Lender of its
obligation to fund its Proportionate Share of a Revolving Loan.
Conversely, no Lender shall be responsible for the failure of
another Lender to fund its Proportionate Share of a Revolving Loan.
(c) The Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by the Borrower to the Agent
for the Defaulting Lender's benefit; nor shall a Defaulting Lender
be entitled to the sharing of any payments hereunder. Amounts
payable to a Defaulting Lender shall instead be paid to or retained
by the Agent. The Agent may hold and, in its discretion, re-lend
to the Borrower the amount of all such payments received by it for
the account of such Lender. For purposes of voting or consenting
to matters with respect to the Credit Documents and determining
Proportionate Shares, such Defaulting Lender shall be deemed not to
be a "Lender" and such Lender's Commitment shall be deemed to be
zero (-0-). This Section shall remain effective with respect to
such Lender until (x) the Obligations under this Credit Agreement
shall have been declared or shall have become immediately due and
payable or (y) the Majority Lenders, the Agent and the Borrower
shall have waived such Lender's default in writing. The operation
of this Section shall not be construed to increase or otherwise
affect the Commitment of any Lender, or relieve or excuse the
performance by the Borrower of its duties and obligations
hereunder.
ARTICLE 4. COMPENSATION, REPAYMENT AND REDUCTION OF COMMITMENTS.
----------------------------------------------------
4.1 Interest on Revolving Loans.
---------------------------
(a) Interest on the unpaid principal amount of Revolving Loans
which are Prime Rate Loans shall be payable monthly in arrears, on
the first Business Day of each month, at an interest rate per annum
equal to the Prime Lending Rate plus one percent (1.0%) calculated
on the net balances owing to the Agent and the Lenders at the close
of business each day during such month. The rate hereunder shall
change each day the Prime Lending Rate changes.
(b) Interest on Revolving Loans which are LIBOR Rate Loans
shall be payable on the last day of each Interest Period with
respect to such LIBOR Rate Loans, at the date of conversion of such
LIBOR Rate Loans (or a portion thereof) to a Prime Rate Loan and at
maturity of such LIBOR Rate Loans at an interest rate per annum
equal during the Interest Period for such LIBOR Rate Loans to the
LIBOR Rate for the Interest Period in effect for such LIBOR Rate
Loans plus two and three-quarters (2.75%). After maturity of such
LIBOR Rate Loans (whether by acceleration or otherwise), interest
shall be payable upon demand. The Agent upon determining the LIBOR
Rate for any Interest Period shall promptly notify the Borrower and
the Lenders by telephone (confirmed promptly in writing) or in
writing thereof. Each determination by the Agent of an interest
rate hereunder shall be conclusive and binding for all purposes,
absent demonstrable error.
(c) Notwithstanding the provisions of Sections 4.1(a) and
(b), the Borrower shall pay to each Lender, so long as and to the
extent such Lender shall be required under regulations of the Board
of Governors of the Federal Reserve System to maintain reserves
with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities, additional interest on the unpaid
principal amount of each Revolving Loan comprised of LIBOR Rate
Loans of such Lender, from the date of such LIBOR Rate Loan until
such principal amount is paid in full, at an interest rate per
annum equal at all times to the remainder obtained by subtracting
(a) the LIBOR Rate for the applicable Interest Period for such
LIBOR Rate Loan from (b) the rate obtained by dividing such LIBOR
Rate by a percentage equal to 1 minus the stated maximum rate
(stated as a decimal) applicable two (2) Business Days before the
first day of such Interest Period of all reserves, if any, required
to be maintained against "Eurocurrency liabilities" as specified in
Regulation D (or against any other category of liabilities which
includes deposits by reference to which the interest rate on LIBOR
Rate Loans is determined or any category of extensions of credit or
other assets which includes loans by a non-United States office of
any Lender to United States residents) having a term equal to the
Interest Period applicable to such LIBOR Rate Loan. Such Lender
shall as soon as practicable provide notice to the Agent and the
Borrower of any such additional interest arising in connection with
such LIBOR Rate Loan, which notice shall be conclusive and binding,
absent demonstrable error.
4.2 Unused Line Fees. The Borrower shall pay to the
----------------
Agent, for the ratable benefit of the Lenders, (i) a non-refundable
fee (the "Revolver Unused Line Fee") equal to one-quarter of one
percent (.25%) per annum of the unused portion of the Maximum
Revolving Loan Amount and (ii) a non-refundable fee (the "Letter of
Credit Unused Line Fee") equal to one-half of one percent (.5%) per
annum of the unused portion of the Maximum Letter of Credit Amount.
The Unused Line Fees shall accrue daily from the Closing Date until
the Expiration Date, and shall be due and payable monthly in
arrears, on the first Business Day of each month commencing with
the month ended June 30, 1998 and, in any event, on the Expiration
Date.
4.3 Letter of Credit Fees.
---------------------
(a) The Agent, for the ratable benefit of the Lenders,
shall be entitled to charge to the account of the Borrower on the
first Business Day of each month, a fee (the "Letter of Credit
Fee"), in an amount equal to two percent (2%) per annum of the
daily weighted average undrawn amount of Letters of Credit
outstanding during the immediately preceding month. In addition,
the Agent, for the benefit of the Issuing Bank, shall be entitled
to charge to the account of the Borrower on the date of issuance of
any standby Letter of Credit, a facing fee equal to one-half
percent (.5%) on the initial face amount of each such standby
Letter of Credit (the "L/C Facing Fee").
(b) The Agent shall also be entitled to charge to the
account of the Borrower, as and when incurred by the Agent or any
Lender, the customary charges, fees, costs and expenses charged to
the Agent or any Lender for the Borrower's account by the Issuing
Bank (the "Issuing Bank Fees") in connection with the issuance,
transfer, drawing, amendment or negotiation of any Letters of
Credit by the Issuing Bank. Each determination by the Agent of
Letter of Credit Fees, L/C Facing Fees, Issuing Bank Fees and other
fees, costs and expenses charged under this Section shall be
conclusive and binding for all purposes, absent manifest error.
4.4 Interest After Event of Default. From the date of
-------------------------------
occurrence of an Event of Default until the earlier of the date
upon which (i) all Obligations shall have been paid and satisfied
in full or (ii) such Event of Default shall have been waived, upon
notice from Agent to the Borrower interest on the Revolving Loans
and Letter of Credit Fees on Letter of Credit Obligations shall
each be payable on demand at a rate per annum equal to, with
respect to the Revolving Loans, the rate in effect under Section
4.1, plus two percent (2%), and with respect to the Letter of
Credit Obligations, the rate at which Letter of Credit Fees are
charged pursuant to the first sentence of Section 4.3(a), plus two
percent (2%).
4.5 Expenses. The Borrower shall reimburse the Expenses
--------
of the Agent, or any Lender, as the case may be, promptly upon
demand.
4.6 Mandatory Payment; Reduction of Commitments.
-------------------------------------------
(a) Mandatory Payment. If (i) the aggregate balance of
-----------------
the Revolving Loans outstanding at any time exceeds the Maximum
Revolving Loan Amount, or (ii) the Letter of Credit Obligations
outstanding at anytime, exceeds the Maximum Letter of Credit
Amount; or (iii) the aggregate balance of the Revolving Loans and
all Letter of Credit Obligations outstanding at any time exceed the
lesser at such time of (x) the Line of Credit and (y) Borrowing
Base then in effect (any such excess amount, an "Out of Formula
Amount"), then the Borrower shall, immediately and without the
necessity of any demand by the Agent or the Lenders, eliminate such
Out of Formula Amount by (i) making a payment to the Agent to
reduce the outstanding principal balance of any Revolving Loans in
an amount equal to such Out of Formula Amount or (ii) making a
payment or otherwise causing to be delivered to the Collateral
Agent for deposit in the Cash Collateral Account, pursuant to the
terms of the Collateral Agency Agreement, an amount equal to such
Out of Formula Amount. If funds remain on deposit with the
Collateral Agent after the Out of Formula Amount has been reduced
to zero and no Event of Default has occurred and is continuing at
such time, such funds shall be released to the Borrower in
accordance with the terms of the Collateral Agency Agreement.
(b) Reduction of Commitments and Line of Credit. On the
-------------------------------------------
Expiration Date, the Commitment of each Lender shall automatically
reduce to zero and may not be reinstated. The Borrower may reduce
or terminate the Line of Credit at any time and from time to time
in whole or in part without premium or penalty. Each such
reduction must be in an amount not less than $5,000,000 (and in
increments of $1,000,000 thereafter). Once reduced, no portion of
the Line of Credit may be reinstated. If the Borrower seeks to
reduce the Line of Credit to an amount less than $10,000,000, then
the Line of Credit shall be reduced to zero.
4.7 Maintenance of Loan Account; Statements of Account.
--------------------------------------------------
The Agent shall maintain an account on its books in the name of the
Borrower (the "Loan Account") in which the Borrower will be charged
with all loans and advances made by the Lenders to the Borrower or
for the Borrower's account, including the Revolving Loans, and all
Letter of Credit Obligations, the Fees, the Expenses and any other
Obligations, as and when such payments become due. The Loan
Account will be credited with all payments received by the Agent
from the Borrower or for the Borrower's account, including all
amounts received from the Collateral Agent pursuant to the terms of
the Collateral Agency Agreement. After the end of each month, the
Agent shall send the Borrower a monthly statement accounting for
the charges, loans, advances and other transactions occurring among
and between the Agent, the Lenders and the Borrower during that
month, provided, that the failure of the Agent to send such
statement to the Borrower shall not relieve the Borrower of any
Obligations. All entries on any such statement shall, thirty (30)
days after the same is sent, be presumed to be correct and shall
constitute prima facie evidence of the information contained in
----- -----
such statement. The Borrower shall have the express right to rebut
such presumption by conclusively demonstrating the existence of an
error on the part of the Agent.
4.8 Payment Procedures. Payments of principal, interest,
------------------
Fees and Expenses shall be made not later than 2:00 P.M. Chicago
time on the day when due, in immediately available dollars, to the
offices of the Agent, at the address set forth in Section 11.7, or
as the Agent may otherwise direct the Borrower. The Borrower
hereby authorizes the Agent to charge the Loan Account with the
amount of all payments to be made hereunder and under the other
Credit Documents, including all Fees and Expenses, as and when such
payments become due. The Borrower's obligations to the Lenders
with respect to such payments shall be discharged by making such
payments to the Agent pursuant to this Section or by the charging
of the Loan Account by the Agent.
4.9 Collection of Accounts. The Borrower shall, and shall
----------------------
cause the Significant Domestic Subsidiaries to, at all times
maintain lockboxes (the "Lockboxes") and shall instruct all account
debtors on the Accounts of the Borrower and the Significant
Domestic Subsidiaries to remit all Collections to such Lockboxes.
The Borrower, the Significant Domestic Subsidiaries, the Collateral
Agent and financial institutions selected by the Borrower and
acceptable to the Agent (the "Lockbox Banks") shall enter into
agreements in form and substance satisfactory to the Agent and the
Lenders (the "Lockbox Agreements"), which among other things shall
provide for the opening of an account for the deposit of
Collections (a "Collection Account") at a Lockbox Bank. All
Collections and other amounts received by the Borrower and the
Significant Domestic Subsidiaries from any account debtor, in
addition to all other cash received by the Borrower and the
Significant Domestic Subsidiaries from any other source, shall upon
receipt be deposited into a Collection Account. Termination of
such arrangements shall also be subject to approval by the Agent.
4.10 Distribution and Application of Collections and other
-----------------------------------------------------
Amounts. All Collections received by the Agent in accordance with
-------
the terms of the Lockbox Agreements and the Collateral Agency
Agreement shall be credited to the Loan Account, unless an Event of
Default has occurred and is continuing, in which case such
Collections and other amounts shall be distributed and applied in
the following order: first, to the payment of any Fees, Expenses or
other Obligations due and payable to the Agent under any of the
Credit Documents, including Agent Advances and any other amounts
advanced by the Agent on behalf of the Lenders; second, to the
payment of any Fees, Expenses or other Obligations due and payable
to the Issuing Bank under any of the Credit Documents; third, to
the ratable payment of any Fees, Expenses or other Obligations due
and payable to the Lenders under any of the Credit Documents other
than those Obligations specifically referred to in this Section
4.10; fourth, to the ratable payment of interest due on the
Revolving Loans; and fifth, to the ratable payment of principal due
on the Revolving Loans.
4.11 Calculations. All calculations of (i) interest
------------
hereunder and (ii) Fees, including, without limitation, Unused Line
Fees, Letter of Credit Fees, L/C Facing Fees and Issuing Bank Fees,
shall be made by the Agent, on the basis of a year of 360 days, or,
if such computation would cause the interest and fees chargeable
hereunder to exceed the Highest Lawful Rate, 365/366 days, in each
case for the actual number of days elapsed (including the first day
but excluding the last day) occurring in the period for which such
interest or Fees are payable. Each determination by the Agent of
an interest rate, Fee or other payment hereunder shall be
conclusive and binding for all purposes, absent manifest error.
4.12 Special Provisions Relating to LIBOR Rate Loans.
-----------------------------------------------
(a) Continuation. With respect to any Borrowing
------------
consisting of LIBOR Rate Loans, the Borrower may, subject to the
provisions of Section 4.12(c), elect to maintain such Borrowing or
any portion thereof as consisting of LIBOR Rate Loans by selecting
a new Interest Period for such Borrowing, which new Interest Period
shall commence on the last day of the immediately preceding
Interest Period. Each selection of a new Interest Period shall be
made by notice given not later than noon Chicago time on the third
Business Day prior to the date of any such continuation relating to
LIBOR Rate Loans, by the Borrower to the Agent. Such notice by the
Borrower of a continuation (a "Notice of Continuation") shall be by
telephone or facsimile transmission, and if by telephone, promptly
confirmed in writing, substantially in the form of Exhibit E, in
each case specifying (i) the date of such continuation, (ii) the
Type of Revolving Loans subject to such continuation, (iii) the
aggregate amount of Revolving Loans subject to such continuation
and (iv) the duration of the selected Interest Period. The
Borrower may elect to maintain more than one Borrowing consisting
of LIBOR Rate Loans by combining such Borrowings into one Borrowing
and selecting a new Interest Period pursuant to this Section
4.12(a). If the Borrower shall fail to select a new Interest
Period for any Borrowing consisting of LIBOR Rate Loans in
accordance with this Section 4.12(a), such Revolving Loans will
automatically, on the last day of the then existing Interest Period
therefor, convert into Prime Rate Loans. The Agent shall give each
Lender prompt notice by telephone or facsimile transmission of each
Notice of Continuation.
(b) Conversion. The Borrower may on any Business Day (so
----------
long as no Default or Event of Default has occurred and is
continuing), upon notice (each such notice, a "Notice of
Conversion") given to the Agent, and subject to the provisions of
Section 4.12(c), convert the entire amount of or a portion of all
Revolving Loans of one Type comprising the same Borrowing into
Revolving Loans of another Type; provided, that any conversion of
any LIBOR Rate Loans into Revolving Loans of another Type shall be
made on, and only on, the last day of an Interest Period for such
LIBOR Rate Loans and, upon conversion of any Prime Rate Loans into
Revolving Loans of another Type, the Borrower shall pay accrued
interest to the date of conversion on the principal amount
converted. Each such Notice of Conversion shall be given not later
than Noon Chicago time on the Business Day prior to the date of any
proposed conversion into Prime Rate Loans and on the third Business
Day prior to the date of any proposed conversion into LIBOR Rate
Loans. Subject to the restrictions specified above, each Notice of
Conversion shall be by telephone or facsimile transmission, and if
by telephone, promptly confirmed in writing, substantially in the
form of Exhibit F, in each case specifying (i) the requested date
of such conversion, (ii) the Type of Revolving Loans to be
converted (iii) the portion of such Type of Revolving Loan to be
converted, (iv) the Type of Revolving Loans such Revolving Loans
are to be converted into and (v) if such conversion is into LIBOR
Rate Loans, the duration of the Interest Period of such Loan. Each
conversion shall be in an aggregate amount for the Revolving Loans
of not less than $[_____] or an integral multiple of $[_____] in
excess thereof. The Borrower may elect to convert the entire
amount of or a portion of all Revolving Loans of one Type
comprising more than one Borrowing into Revolving Loans of another
Type by combining such Borrowings into one Borrowing; provided,
that if the Borrowings so combined consist of LIBOR Rate Loans,
such Loans shall have Interest Periods ending on the same date.
(c) Certain Limitations on LIBOR Rate Loans. The right of
---------------------------------------
the Borrower to maintain, select, continue or convert LIBOR Rate
Loans shall be limited as follows:
(i) If the Agent is advised by Bankers Trust Company
that it is not offering United States dollar deposits (in the
applicable amounts) in the London interbank market, or the
Agent determines that adequate and fair means do not otherwise
exist for ascertaining the LIBOR Rate or LIBOR Rate Loans
comprising any requested Borrowing, continuation or
conversion, the right of the Borrower to select or maintain
LIBOR Rate Loans for such Borrowing or any subsequent
Borrowing shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such
suspension no longer exists, and each Revolving Loan shall be
made as a Prime Rate Loan.
(ii) If the Majority Lenders shall, at least one
Business Day before the date of any requested Borrowing,
continuation or conversion, notify the Agent that the LIBOR
Rate for Revolving Loans comprising such Borrowing will not
adequately reflect the cost to such Lenders of making or
funding their respective Revolving Loans for such Borrowing,
the right of the Borrower to select LIBOR Rate Loans for such
Borrowing shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and each Revolving Loan comprising
such Borrowing and each other Borrowing requested during such
period of suspension shall be made as a Prime Rate Loan.
(iii) If at any time any Lender determines (which
determination shall, absent manifest error, be conclusive and
binding on all parties) that the making, continuation or
conversion of any Revolving Loan as a LIBOR Rate Loan by such
Lender has become unlawful or impermissible by reason of
compliance by that Lender with any law, governmental rule,
regulation or order of any Governmental Authority (whether or
not having the force of law), then, and in any such event,
such Lender may give notice of that determination in writing,
to the Agent and the Borrower and the Agent shall promptly
transmit the notice to each other Lender. Until such Lender
gives notice otherwise, the right of the Borrower to select
LIBOR Rate Loans from that Lender shall be suspended and each
Revolving Loan made by that Lender, notwithstanding the Type
of Revolving Loan made by the other Lenders, shall be a Prime
Rate Loan and each LIBOR Rate outstanding from that Lender
shall automatically, on the last day of the existing Interest
Period therefor (or earlier, if so required under such law,
rule, regulation or order), convert to a Prime Rate Loan.
(iv) No Agent Advance shall be made as a LIBOR Rate
Loan.
(v) No Revolving Loans may be made, continued or
converted as or to LIBOR Rate Loans at any time that a Default
or Event of Default shall have occurred and be continuing.
(d) Compensation.
------------
(i) Each Notice of Continuation and Notice of Conversion
shall be irrevocable by and binding on the Borrower. In the
case of any Borrowing, continuation or conversion that the
related Notice of Borrowing, Notice of Continuation or Notice
of Conversion specifies is to be comprised of LIBOR Rate
Loans, the Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Person as a result of
any failure to fulfill, on or before the date for such
Borrowing, continuation or conversion specified in such Notice
of Borrowing, Notice of Continuation or Notice of Conversion,
the applicable conditions set forth in Article 5, including,
without limitation, any loss (excluding loss of anticipated
profits), cost or expense incurred by reason of the
liquidation or re-employment of deposits or other funds
acquired by such Lender to fund the Revolving Loan to be made
by such Lender as part of such Borrowing, continuation or
conversion.
(ii) If any payment of principal of, or conversion or
continuation of, any LIBOR Rate Loan is made other than on the
last day of the Interest Period for such Loan as a result of
a payment, prepayment, conversion or continuation of such Loan
or acceleration of the maturity of the Revolving Notes or for
any other reason, the Borrower shall, upon demand by any
Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or
expenses which it may reasonably incur as a result of such
payment, including, without limitation, any loss (excluding
loss of anticipated profits), cost or expense incurred by
reason of the liquidation or re-employment of deposits or
other funds acquired by any Lender to fund or maintain such
Loan.
(iii) Calculation of all amounts payable to a Lender
under this Section 4.12(d) shall be made as though such Lender
elected to fund all LIBOR Rate Loans by purchasing United
State dollar deposits in its LIBOR Lending Office's interbank
eurodollar market.
ARTICLE 5. CONDITIONS PRECEDENT.
--------------------
5.1 Conditions Precedent to Initial Letter of Credit. The
------------------------------------------------
obligation of the Agent and the Lenders to cause the Issuing Bank
to issue the initial Letter of Credit is subject to the
satisfaction or waiver of the following conditions precedent:
(a) Closing Document List. The Agent and the Lenders
---------------------
shall have received each of the agreements, opinions, reports,
approvals, consents, certificates and other documents set forth on
the closing document list attached hereto as Schedule A (the
"Closing Document List").
(b) Material Adverse Change. (i) No event shall have
-----------------------
occurred which has had or could reasonably be expected to have a
Material Adverse Effect, or (ii) there shall not have occurred a
substantial impairment of the financial markets generally that is
reasonably likely to materially and adversely affect the
transactions contemplated hereby, in each case as determined by the
Agent and each Lender in its sole discretion.
(c) Fees and Expenses. The Agent and each of the Lenders
-----------------
shall have received payment in full of all Fees and Expenses
payable to them on or before the Closing Date.
(d) Borrowing Base. The Borrowing Base shall be adequate,
--------------
in the Agent's sole discretion, for the Borrower's overall business
and working capital requirements.
5.2 Conditions Precedent to all Letters of Credit. The
---------------------------------------------
obligation of the Agent and the Lenders to cause the Issuing Bank
to issue any requested Letter of Credit is subject to the
satisfaction of the conditions precedent set forth below. Each
Letter of Credit Request shall constitute a representation and
warranty that such conditions are satisfied.
(a) All representations and warranties contained in this
Credit Agreement and the other Credit Documents shall be true and
correct in all material respects on and as of the date of such
Letter of Credit Request, as if then made, other than
representations and warranties that relate solely to an earlier
date;
(b) No Default or Event of Default shall have occurred, or
would result from the issuance of the requested Letter of Credit,
which has not been waived; and
(c) No event has occurred which has had or could
reasonably be expected to have a Material Adverse Effect.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
------------------------------
To induce the Agent and the Lenders to enter into this Credit
Agreement, to induce the Agent and the Lenders to cause the Issuing
Bank to issue Letters of Credit and to induce the Lenders to make
the Revolving Loans and other financial accommodations described
herein, the Borrower hereby represents and warrants to the Agent
and the Lenders that the representations and warranties contained
in this Article 6 are true, correct and complete. Such
representations and warranties, and all other representations and
warranties made by the Borrower in any other Credit Documents,
shall survive the execution and delivery of this Credit Agreement
and such other Credit Documents.
6.1 Organization. The Borrower is a corporation duly
------------
organized and existing in good standing under the laws of the State
of Delaware and each Subsidiary is duly organized and existing in
good standing under the laws of the jurisdiction in which it is
incorporated. The Borrower and each Subsidiary is qualified to do
business and in good standing in every jurisdiction where the
ownership of their respective properties or the nature of their
respective businesses makes such qualification necessary except
where the failure to be qualified or in good standing in the
aggregate could not reasonably be expected to have a Material
Adverse Effect. As of the Closing Date, the names of the
Subsidiaries of the Borrower, the jurisdiction in which each such
Subsidiary is organized, the number of outstanding shares of each
class of capital stock of such Subsidiary, the number of shares of
each such class owned by the Borrower, or any Subsidiary of the
Borrower, and the number of shares of each such class owned by any
other Person, are as set forth in Schedule C, Part 6.1.
6.2 Power and Authority; Enforceability. The Borrower and
-----------------------------------
each Subsidiary has all requisite corporate power to own its
property and to carry on its business as now being conducted and as
proposed to be conducted. The Borrower and each Significant
Domestic Subsidiary has the legal capacity and authority to
execute, deliver, and perform its obligations under the Credit
Documents to which it is a party. All action on the part of the
Borrower and each Significant Domestic Subsidiary necessary for the
authorization, execution, delivery and performance of all
obligations of the Borrower and such Significant Domestic
Subsidiary under the Credit Documents to which it is a party has
been taken. The Credit Documents to which the Borrower or any
Significant Domestic Subsidiary is a party have been duly executed
and delivered by, and are the legal, valid and binding obligations
of the Borrower or such Significant Domestic Subsidiary, and each
such document is enforceable against the Borrower or such
Significant Domestic Subsidiary in accordance with its terms,
except as may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors rights in general and by
general principles of equity, and each is in full force and effect.
6.3 Financial Statements. The Borrower has furnished the
--------------------
Agent with the following financial statements, certified by the
chief financial officer of the Borrower: (i) consolidating and
consolidated balance sheets of the Borrower and its Subsidiaries as
at the last day in each fiscal year in each of the years 1992 to
1994, inclusive, and consolidating and consolidated statements of
income and cash flows and a consolidated statement of stockholders'
equity of the Borrower and its Subsidiaries for each such year, all
certified by Coopers & Xxxxxxx (with respect to the consolidated
statements) or prepared by the Borrower (with respect to the
consolidating statements); and (ii) a consolidated balance sheet of
the Borrower and its Subsidiaries as at March 30, 1995 and March
31, 1994 and consolidated statements of income, stockholders'
equity and cash flows for the three-month period ended on each such
date, prepared by the Borrower. Such financial statements
(including any related schedules and/or notes) are true and correct
in all material respects (subject, as to interim statements, to
changes resulting from audits and year-end adjustments), have been
prepared in accordance with GAAP consistently followed throughout
the periods involved and show all liabilities, direct and
contingent, of the Borrower and its Subsidiaries required to be
shown in accordance with GAAP. The balance sheets fairly present
the condition of the Borrower and its Subsidiaries as at the dates
thereof, and the statements of income, stockholders' equity and
cash flows fairly present the results of the operations of the
Borrower and its Subsidiaries and their cash flows for the periods
indicated. There has been no material adverse change in the
properties or assets, business, condition (financial or otherwise)
or operations of the Borrower and its Subsidiaries taken as a whole
since December 29, 1994.
6.4 Actions Pending. There is no action, suit,
---------------
investigation or proceeding pending or, to the knowledge of the
Borrower, threatened against the Borrower or any of its
Subsidiaries, or any properties or rights of the Borrower or any of
its Subsidiaries, by or before any court, arbitrator or
Governmental Authority which could reasonably be expected have a
Material Adverse Effect.
6.5 Outstanding Debt. Neither the Borrower nor any of its
----------------
Subsidiaries has outstanding any Debt except as permitted by
Section 8.3. There exists no default (nor any event which with the
passage of time, the giving of notice or both would constitute a
default) and, after giving effect to the transaction contemplated
by this Credit Agreement, the other Credit Documents and each of
the Related Transaction Documents, there will exist no default (nor
any event which with the passage of time, the giving of notice or
both would constitute a default) under the provisions of any
instrument evidencing Debt of the Borrower or any Subsidiary or of
any agreement relating thereto.
6.6 Title to Properties. The Borrower and each of its
-------------------
Subsidiaries has good and indefeasible title to its respective real
property (other than leased real property) and good title to all of
its other respective Property, including the Property reflected in
the balance sheet as at December 29, 1994 referred to in Section
6.3 (other than Property disposed of in the ordinary course of
business), subject to no Lien of any kind except Permitted Liens.
All leases necessary in any material respect for the conduct of the
respective businesses of the Borrower and its Subsidiaries are
valid and subsisting and are in full force and effect. The
Borrower and its Subsidiaries enjoy peaceful and undisturbed
possession of all leased property necessary in any material respect
for the operation of its business, and none of the leases with
respect thereto contains any unusual or burdensome provisions which
might materially affect or impair the ability of the Borrower or
its Subsidiaries to maintain the operations of the Borrower and its
Subsidiaries (taken as a whole).
6.7 Taxes. The Borrower and each of its Subsidiaries has
-----
filed all federal, state and other income tax returns which are
required to be filed, (other than such tax returns where the
consequence of a failure to file is immaterial), and each has paid
all taxes as shown on such returns and on all assessments received
by it to the extent that such taxes have become due, except such
taxes as are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in
accordance with GAAP.
6.8 Conflicting Agreements and Other Matters. Neither the
----------------------------------------
Borrower nor any of its Subsidiaries is a party to any contract or
agreement or subject to any charter or other corporate restriction
which materially and adversely affects the ability of the Borrower
or its Subsidiaries to maintain the operations of the Borrower and
its Subsidiaries (taken as a whole). Neither the execution nor
delivery of any of the Credit Documents or any of the Related
Transaction Documents, nor fulfillment of nor compliance with the
terms and provisions hereof and thereof will conflict with, or
result in a breach of, the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or
result in the creation of any Lien (other than Liens in favor of
the Collateral Agent) upon any of the Property of the Borrower or
any of its Subsidiaries pursuant to, the articles of incorporation
or by-laws of the Borrower or any of its Subsidiaries, any award of
any arbitrator or any agreement (including any agreement with
stockholders), instrument, order, judgment, decree, statute, law,
rule or regulation to which the Borrower or any of its Subsidiaries
is subject. Neither the Borrower nor any of its Subsidiaries is a
party to, or otherwise subject to any provision contained in, any
instrument evidencing Debt of the Borrower or such Subsidiary, any
agreement relating thereto or any other contract or agreement
(including its articles of incorporation or bylaws) which limits
the amount of, or otherwise imposes restrictions on the incurring
of, Debt of the Borrower or any Subsidiary including, without
limitation, the Obligations and the obligations of the Significant
Domestic Subsidiaries under the Guaranty Agreement, except as set
forth in Schedule C, Part 8.7.
6.9 Use of Proceeds.
---------------
(a) Neither the Borrower nor any of its Subsidiaries owns or
has any present intention of acquiring any "margin stock" as
defined in Regulations G, T, U or X of the Board of Governors of
the Federal Reserve System (herein called "margin stock"). None of
the proceeds of the Revolving Loans and no Letters of Credit will
be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any
margin stock or for the purpose of maintaining, reducing or
retiring any Indebtedness which was originally incurred to purchase
or carry any stock that is currently a margin stock or for any
other purpose which might constitute this transaction a "purpose
credit" within the meaning of such Regulations G, T, U or X.
Neither the Borrower nor any agent acting on its behalf has taken
or will take any action which might cause this Credit Agreement to
violate Regulations G, T, U or X or any other regulation of the
Board of Governors of the Federal Reserve System or to violate the
Exchange Act, in each case as in effect now or as the same may
hereafter be in effect.
(b) Borrower shall use the proceeds of the initial Revolving
Loans made on the Closing Date to refinance in full the aggregate
then outstanding principal balance of the Revolving Loans (as
defined in the Prudential Revolving Credit Agreement).
6.10 ERISA. No accumulated funding deficiency (as defined
-----
in Section 302 of ERISA and Section 412 of the Internal Revenue
Code), whether or not waived, exists with respect to any Plan
(other than a Multiemployer Plan). No liability to the Pension
Benefit Guaranty Corporation has been or is expected by the
Borrower, any of its Subsidiaries or any member of the Control
Group to be incurred with respect to any Plan (other than a
Multiemployer Plan) by the Borrower, any of its Subsidiaries or any
member of the Control Group which is or could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower,
any of its Subsidiaries nor any member of the Control Group has
incurred or presently expects to incur any withdrawal liability
under Title IV of ERISA with respect to any Multiemployer Plan
which is or could reasonably be expected to have a Material Adverse
Effect. The execution and delivery of the Credit Documents by each
of the Credit Parties will be exempt from, or will not involve any
transaction which is subject to, the prohibitions of Section 406 of
ERISA and will not involve any transaction in connection with which
a penalty could be imposed under Section 502(i) of ERISA or a tax
could be imposed pursuant to Section 4975 of the Internal Revenue
Code.
6.11 Governmental Consent and Other Third Party Consents.
---------------------------------------------------
Neither the nature of the Borrower or of any of its Subsidiaries,
nor any of their respective businesses or properties, nor any
relationship between the Borrower or any of its Subsidiaries and
any other Person, nor any circumstance in connection with the
financial accommodations contemplated by this Credit Agreement is
such as to require any authorization, consent, approval, exemption
or other action by or notice to or filing with any court or
Governmental Authority or other Person in connection with the
execution and delivery of any of the Credit Documents, or
fulfillment of or compliance with the terms and provisions hereof,
other than filings and recordings necessary to perfect the Liens
granted to the Collateral Agent under the Collateral Documents, all
of which have been made.
6.12 Environmental Compliance. The Borrower and its
------------------------
Subsidiaries and all of their respective properties and facilities
have complied at all times and in all respects with all foreign,
federal, state, local and regional statutes, laws, ordinances and
judicial or administrative orders, judgments, rulings and
regulations relating to protection of the environment except, in
any such case, where failure to comply could not reasonably be
expected to have a Material Adverse Effect.
6.13 Disclosure. Neither this Credit Agreement, any other
----------
of the Credit Documents, any of the Related Transaction Documents,
nor any other document, certificate or statement furnished to the
Agent or any of the Lenders by or on behalf of the Borrower or any
Subsidiary in connection herewith (including, without limitation,
the Offering Memorandum) contains any untrue statement of a
material fact or omits to state a material fact necessary in order
to make the statements contained herein and therein not misleading.
To the knowledge of the Borrower there is no fact peculiar to the
Borrower or any of its Subsidiaries which materially adversely
affects or in the future may (so far as the Borrower can now
foresee) materially adversely affect the properties or assets,
business, condition (financial or otherwise) or operations of the
Borrower and its Subsidiaries, taken as a whole, and which has not
been set forth in this Credit Agreement or in the other documents,
certificates and statements furnished to the Agent by or on behalf
of the Borrower prior to the date hereof in connection with the
transactions contemplated hereby. The financial projections
contained in the Memorandum are reasonable based on the assumptions
stated therein and the best information available to the officers
of the Borrower (provided that this representation shall not
constitute a representation by the Borrower that any of such
projections will be attained). The parties hereto acknowledge that
the description of the terms of the financings described in the
Offering Memorandum will be superseded by the actual terms therefor
as contained in this Credit Agreement and the Related Transaction
Documents.
6.14 Regulatory Status. Neither the Borrower nor any of
-----------------
its Subsidiaries is (i) an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, (ii) a "holding
company" or a "subsidiary company" or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within
the meaning of Public Utility Act of 1935, as amended, or (iii) a
"public utility" within the meaning of the Federal Power Act, as
amended.
6.15 Permits and Other Operating Rights. The Borrower and
----------------------------------
each of its Subsidiaries has all such valid and sufficient
certificates of convenience and necessity, franchises, licenses,
permits, operating rights and other authorizations from federal,
state, foreign, regional, municipal and other local regulatory
bodies or administrative agencies or other Governmental Authorities
having jurisdiction over such Borrower or such Subsidiary or any of
its respective properties, as are necessary for the ownership,
operation and maintenance of its businesses and properties, subject
to exceptions and deficiencies which do not materially affect the
properties or assets, business, condition (financial or otherwise)
or operations of the Borrower and its Subsidiaries taken as a
whole, and such certificates of convenience and necessity,
franchises, licenses, permits, operating rights and other
authorizations from federal, state, foreign, regional, municipal
and other local regulatory bodies or administrative agencies or
other Governmental Authorities having jurisdiction over the
Borrower, any such Subsidiary or any of their Property are free
from burdensome restrictions or conditions of an unusual character
or restrictions or conditions materially adverse to the properties
or assets, business, condition (financial or otherwise) or
operations of the Borrower and its Subsidiaries taken as a whole,
and neither the Borrower nor any Subsidiary is in violation of any
thereof in any material respect.
6.16 Absence of Other Liens. Except with respect to
----------------------
Permitted Liens, there is no financing statement, security
agreement, chattel mortgage, real estate mortgage or other document
filed or recorded with any filing records, registry or other public
office, that purports to cover, affect or give notice of any
present or possible future Lien on any Property of the Borrower or
any of its Subsidiaries or any rights relating thereto.
6.17 Security Interest. As of the Closing Date, all
-----------------
filings, assignments, pledges and deposits of documents or
instruments have been made and all other actions have been taken,
that are necessary or advisable under applicable law and are
required to be made or taken on or prior to the Closing Date under
the provisions of this Credit Agreement and the Collateral
Documents to establish the Collateral Agent's security interest in
the Collateral. As of the Closing Date, the Collateral and the
Collateral Agent's rights with respect to the Collateral are not
subject to any setoff, claims, withholdings or other defenses
(except any such setoff, claim or defense which could not,
individually or in the aggregate, materially impair the rights of
the Collateral Agent with respect to the Collateral). The Borrower
and each of the Significant Domestic Subsidiaries party to any
Collateral Document is the owner of the Collateral described
therein free from any Lien, except for Permitted Liens.
6.18 Locations of Collateral. The address of the principal
-----------------------
place of business and the chief executive office of the Borrower
and each of the Significant Domestic Subsidiaries is set forth on
Schedule II to the Security Agreement executed by such Person. The
books and records of the Borrower and each of the Significant
Domestic Subsidiaries, and all of their chattel paper and records
of Accounts, are maintained exclusively at such locations. There
is no location at which the Borrower or any of the Significant
Domestic Subsidiaries has any Collateral other than those locations
identified on Schedule II to the Security Agreement executed by
such Person. All real property owned or leased by the Borrower and
the Significant Domestic Subsidiaries is described in Exhibit A to
the Mortgages executed by such Person, which Schedule sets forth,
for each such location, a legal description, common address and,
for leased property, the name and mailing address of the record
owner of such leased property. All of the "Trademarks,"
"Copyrights," "Licenses" and "Patents" (as each such term is
defined in the Intellectual Property Security Agreements) owned or
licensed by the Borrower and each of the Significant Domestic
Subsidiaries is set forth on Schedules A, B, C and D, respectively,
to the Intellectual Property Security Agreement executed by such
Person.
ARTICLE 7. AFFIRMATIVE COVENANTS.
---------------------
Until termination of this Credit Agreement and payment and
satisfaction of all Obligations due hereunder:
7.1 Financial Reporting. The Borrower shall timely
-------------------
deliver to the Agent and each Lender the following information:
(a) Annual Financial Statements. As soon as available,
---------------------------
but not later than 90 days after each fiscal year end: (i) the
annual audited consolidated and unaudited consolidating Financial
Statements of the Consolidated Entity; (ii) a comparison in
reasonable detail to the prior year audited consolidated Financial
Statements; (iii) the Auditors' opinion concerning the audited
consolidated Financial Statements of the Consolidated Entity, which
shall be reasonably acceptable to the Agent and the Lenders, shall
be without limitation as to the scope of the audit and shall state
that such financial statements present fairly, in all material
respects, the financial position of the Borrower and its
Subsidiaries and their results of operations and cash flows and
have been prepared in conformity with GAAP, that the examination of
such Auditors in connection with such financial statements has been
made in accordance with generally accepted auditing standards, and
that such audit provides a reasonable basis for such opinion in the
circumstances; (iv) a certificate of the Auditors stating that in
making the audit necessary to the Auditors' opinion on the
consolidated Financial Statements, they have obtained no knowledge
of any Event of Default or Default, or if they have obtained
knowledge of any Event of Default or Default, specifying the nature
and period of existence thereof; provided, however, that the
-------- -------
Auditors shall not be liable to anyone by reason of their failure
to obtain knowledge of any Event of Default or Default which would
not be disclosed in the course of an audit conducted in accordance
with generally accepted auditing standards; (v) a narrative
discussion of the consolidated financial condition and results of
operations and the consolidated liquidity and capital resources of
the Consolidated Entity for such fiscal year, prepared by the chief
financial officer of the Borrower (which requirement may be
satisfied by delivery of the annual report on Form 10-K filed by
the Borrower with the SEC and distributed to its stockholders and
public debtholders); (vi) a letter substantially in the form of
Exhibit J hereto from the Auditors stating that they have been
informed that a primary intent of the Borrower was to have the
professional services that the Auditors provided to the Borrower in
preparing their report with respect to the annual audited Financial
Statements was to benefit or influence the Lenders and identifying
the Lenders as a party that the Borrower has indicated intends to
rely on such professional services provided to the Borrower by the
Auditors, and (vii) a compliance certificate substantially in the
form of Exhibit K with an attached schedule of calculations
demonstrating compliance with the financial covenants set forth in
Article 8.
(b) Monthly and Annual Projections. Not later than 45
------------------------------
days after each fiscal year end, beginning with the fiscal year
ended December 28, 1995, monthly projections of the financial
condition and results of operations of the Consolidated Entity for
the next succeeding year and annual projections for the next two
(2) succeeding fiscal years thereafter, in each case containing
projected consolidating balance sheets, statements of operations,
statements of cash flows and statements of changes in shareholders
equity.
(c) Quarterly Financial Statements. As soon as available,
------------------------------
but not later than 45 days after each end of each of the first
three fiscal quarters of each fiscal year: (i) consolidated
Financial Statements of the Consolidated Entity as of the fiscal
quarter then ended, and for the fiscal year to date; (ii) a
comparison in reasonable detail to the consolidated Financial
Statements for the corresponding periods of the prior fiscal year;
(iii) the certification of the chief executive officer or chief
financial officer of the Borrower that such consolidated Financial
Statements have been prepared in accordance with GAAP (subject to
year-end audit adjustments); (iv) a narrative discussion of the
consolidated financial condition and results of operations and the
consolidated liquidity and capital resources of the Consolidated
Entity for such fiscal quarter and fiscal year to date, prepared by
the chief financial officer of the Borrower (which requirement may
be satisfied be delivery of the quarterly report on Form 10-Q filed
by the Borrower with the SEC and distributed to its stockholders
and public debtholders); and (v) a compliance certificate
substantially in the form of Exhibit K with an attached schedule of
calculations demonstrating compliance with the financial covenants
set forth in Article 8.
(d) Special Reports. Promptly upon receipt thereof, a
---------------
copy of each report submitted to the Borrower or any of its
Subsidiaries by the Auditors in connection with any annual, interim
or special audit made by the Auditors of the books of the Borrower
or any of its Subsidiaries.
(e) SEC Reports. The Borrower shall provide to the Agent
-----------
and each Lender within 15 days after it files them with the SEC
copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the
Borrower files with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. If the Borrower is not subject to Section 13 or
15(d) of the Exchange Act, the Borrower shall continue to file with
the SEC, the Agent and the Lenders on the same timely basis such
reports, information and other documents as the Borrower would file
if the Borrower were subject to the requirements of Section 13 or
15(d) of the Exchange Act.
7.2 Collateral Reporting. The Borrower shall timely
--------------------
deliver to the Agent the following certificates and reports:
(a) Monthly Borrowing Base Certificates. Monthly, within
-----------------------------------
thirty-five (35) days after the last Business Day of each month,
and at any other time requested by the Agent, a borrowing base
certificate (the "Borrowing Base Certificate"), which shall be: (i)
substantially in the form of Exhibit A, detailing the Borrower's
Eligible Accounts Receivable and Eligible Inventory as of the last
day of each month, or as of such other date as the Agent may
request; and (ii) prepared by or under the supervision of the
Borrower's chief executive officer or chief financial officer and
certified by such officer subject only to adjustment upon
completion of the normal year-end audit of physical inventory.
Each Borrowing Base Certificate shall have attached to it such
additional schedules and other information as the Agent may
reasonably request, including, without limitation, an aging of
Accounts.
(b) Further Assurances. When requested by the Agent, any
------------------
further information regarding the Collateral, business affairs and
financial condition of the Borrower or any of its Subsidiaries.
7.3 Notification Requirements. The Borrower shall timely
-------------------------
give the Agent and each of the Lenders the following notices:
(a) Notice of Defaults. Promptly, and in any event within
------------------
five (5) Business Days after a Responsible Officer of the Borrower
or any of its Subsidiaries becomes aware of the occurrence of a
Default or Event of Default, a certificate of the chief executive
officer or chief financial officer of the Borrower specifying the
nature thereof and the Borrower's proposed response thereto, each
in reasonable detail.
(b) Collateral Matters. At least thirty (30) Business
------------------
Days prior written notice to the Agent of any change in the
location of any Collateral or in the location of the chief
executive office or place of business of the Borrower or any of its
Subsidiaries from the locations specified in the Security Agreement
to which it is a party. At least twenty (20) Business Days prior
to any such change, the Borrower shall cause to be executed and
delivered to the Collateral Agent any financing statements,
Collateral Access Agreements or other documents required by the
Agent, all in form and substance satisfactory to the Agent.
(c) Notice of Suits, Adverse Change in Business, Etc. The
-------------------------------------------------
Borrower shall, and shall cause each of its Subsidiaries to, as
soon as possible, and in any event within five (5) Business Days
after any Responsible Officer of such Person learns of the
following, give written notice to the Agent: (a) of any material
proceedings (including, without limitation, litigation,
investigations, arbitration or governmental proceedings) being
instituted by or against such Person in any federal, state, local
or foreign court or before any commission or other regulatory body
(federal, state, local or foreign), (b) that such Person's
operations are not in full compliance with all requirements of
applicable federal, state, local or foreign law, ordinance, rule,
regulation or other governmental requirement, except for notices as
to matters which either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, (c) that,
without limiting the foregoing clause (b), such Person is subject
to a material federal, state, local or foreign investigation
evaluating whether any remedial action is needed to respond to the
release of any hazardous or toxic waste, substance or constituent,
or other substance into the environment, and (d) of any material
adverse change in the business, operations, condition (financial or
otherwise), properties or prospects of the Borrower and its
Subsidiaries, taken as a whole.
7.4 Corporate Existence; Conduct of Business. The
----------------------------------------
Borrower shall, and shall cause each of its Subsidiaries to, (a)
continue to engage primarily in the material lines of business (as
determined by Borrower in reasonable discretion) which the Borrower
and Subsidiaries operate, respectively, as of the Closing Date, (b)
preserve, renew and keep in full force and effect the corporate
existence, and all material rights, privileges, franchises, permits
and licenses of the Borrower and its Subsidiaries, respectively;
provided, however, that (i) this clause (b) shall not prohibit a
-------- -------
merger otherwise permitted pursuant to Section 8.5 or Section 8.6
and (ii) neither the Borrower nor any of its Subsidiaries shall be
required to preserve any such right or franchise or its corporate
existence if the loss thereof could not reasonably be expected to
have a Material Adverse Effect.
7.5 Books and Records; Inspections. The Borrower agrees
------------------------------
to maintain, and to cause each of its Subsidiaries to maintain,
books and records pertaining to the Collateral in such detail, form
and scope as is consistent with good business practice. The
Borrower agrees that the Agent or its agents may enter upon the
premises of the Borrower or any of its Subsidiaries at any time and
from time to time, during normal business hours and upon reasonable
notice under the circumstances, and at any time at all on and after
the occurrence of a Default which continues beyond the expiration
of any grace or cure period applicable thereto, and which has not
otherwise been waived by the Agent, for the purposes of (i)
inspecting and verifying the Collateral, (ii) inspecting and/or
copying (at the Borrower's expense) any and all records pertaining
thereto, and (iii) discussing the affairs, finances and business of
the Borrower with any officers, employees and directors of the
Borrower or, in the presence of a Responsible Officer of the
Borrower, with the Auditors. The Borrower agrees to pay the
Expenses incurred by the Agent and its agents in connection with
inspections and audits once each fiscal year of the Borrower prior
to the occurrence of an Event of Default and for each such
inspection and audit occurring after the occurrence and during the
existence of an Event of Default.
7.6 Insurance. The Borrower shall insure and keep
---------
insured, and shall cause each Subsidiary to insure and keep
insured, with financially sound and reputable insurers, so much of
their respective Property and in such amounts as is usually and
customarily insured by companies engaged in similar businesses with
respect to Property of a similar character, and, in any event, as
is required under the Collateral Documents with respect to
maintenance of insurance. In the event the Borrower at any time or
times hereafter shall fail to obtain or maintain any of the
policies of insurance required to be maintained by any of the
Collateral Documents or to pay any premium in whole or in part
relating thereto, then the Agent or the Lenders, without waiving
any Event of Default hereunder, may at any time (but shall be under
no obligation to) obtain and maintain such policies of insurance
and pay such premiums therefor and take any other action with
respect thereto as the Agent or the Lenders deem advisable.
7.7 Taxes. The Borrower shall, and shall cause each of
-----
its Subsidiaries to, pay or cause to be paid all license fees,
bonding premiums and related taxes and charges, and shall pay or
cause to be paid all of such Person's real and personal property
taxes, assessments and charges and all of such Person's franchise,
income, unemployment, use, excise, old age benefit, withholding,
sales and other taxes and other governmental charges assessed
against such Person, or payable by such Person, in each case when
due and in such manner as to prevent any penalty from accruing or
any Lien from attaching to its property (other than Liens for taxes
not yet due and payable), provided that such Person shall have the
right to contest in good faith, by an appropriate proceeding
promptly initiated and diligently conducted, the validity, amount
or imposition of any such tax, assessment or charge, and during the
pendency of such good faith contest to delay or refuse payment
thereof if such Person establishes adequate reserves to cover such
contested taxes, assessments or charges.
7.8 Compliance with Laws. The Borrower agrees to comply,
--------------------
and to cause each of its Subsidiaries to comply, in all material
respects, with all applicable laws, ordinances, rules, regulations
and other requirements of Governmental Authorities (including,
without limitation, Environmental Laws and ERISA), except to the
extent that noncompliance could not reasonably be expected to have
a Material Adverse Effect.
7.9 Maintenance of Property. The Borrower shall, and
-----------------------
shall cause each of its Subsidiaries to, maintain its Property in
good working order and condition (ordinary wear and tear excepted)
and make all necessary repairs, renewals, replacements, additions,
betterments and improvements thereto so that the business carried
on in connection therewith may be properly and advantageously
conducted at all times, provided that nothing in this Section 7.9
shall prevent the Borrower of any of its Subsidiaries from
discontinuing the operation and maintenance of any of its Property
if such discontinuance is desirable in the conduct of its business
and not disadvantageous in any material respect to the Lenders;
provided, further, that nothing in this Section shall prevent the
-------- -------
Borrower or any of its Subsidiaries from discontinuing or disposing
of any of its Property to the extent otherwise permitted by Section
8.5 or Section 8.9 hereof.
7.10 Guaranties. The Borrower covenants that, effective
----------
upon any Person becoming a Significant Domestic Subsidiary, the
Borrower shall cause such Person to become a party to the Guaranty
Agreement and execute and deliver a Security Agreement and all such
agreements, instruments, documents, financing statements,
mortgages, deeds of trust, leasehold mortgages and other written
matter, and take such further action, as the Collateral Agent, the
Agent or any of the Lenders may request in order to obtain a valid
and perfected first priority Lien on all (or all but a de minimis
-- -------
amount of) such Person's Property (subject only to Permitted
Liens).
7.11 Further Assurances. The Borrower shall take, and
------------------
shall cause each of its Subsidiaries to take, all such further
actions and execute all such further documents and instruments as
the Agent may at any time reasonably determine in its sole
discretion to be necessary or desirable to further carry out and
consummate the transactions contemplated by the Credit Documents,
to cause the execution, delivery and performance of the Credit
Documents to be duly authorized and to perfect or protect the Liens
(and the priority status thereof) of the Collateral Agent on the
Collateral. Without limiting the foregoing, the Borrower and each
Subsidiary shall, at its own expense with respect to any real
property acquired by it after the Closing Date, concurrently with
such acquisition, execute, deliver and provide to the Collateral
Agent such Mortgages and other documents as the Agent, the Lenders
and the Collateral Agent may reasonably deem appropriate or
advisable to create a first priority (subject to Permitted Liens)
valid and perfected Lien in such Property in favor of the
Collateral Agent.
ARTICLE 8. NEGATIVE COVENANTS.
------------------
Until termination of this Credit Agreement and payment and
satisfaction of all Obligations due hereunder, the Borrower shall
comply with, and, where required, shall cause each of its
Subsidiaries to comply with, the following covenants:
8.1 Certain Financial Covenants.
---------------------------
(a) Consolidated Tangible Net Worth. The Borrower
-------------------------------
covenants that it will not cause or permit Consolidated Tangible
Net Worth, at any time:
(i) During each "Clause (i) Test Period" (as defined
below) occurring during the period commencing on the Original
Closing Date and ending on December 28, 1995, to be less than
an amount (the "Clause (i) Amount") equal to (1) negative
$37,000,000, plus (2) 50% of Consolidated Net Income for such
----
Clause (i) Test Period (or zero in the case of a deficit),
plus (3) the amount of any net gain realized by the Borrower
----
or any of its Subsidiaries on the exchange, redemption,
purchase or other acquisition of any of its debt securities
(including, without limitation, the 10.25% Notes) during such
Clause (i) Test Period; where "Clause (i) Test Period" means,
at any time, the period (taken as one accounting period)
commencing on March 30, 1995 and ending on the then most
recently ended fiscal quarter of the Borrower;
(ii) During each "Clause (ii) Test Period" (as
defined below) occurring during the period commencing on
December 29, 1995 and ending on December 26, 1996, to be less
than an amount (the "Clause (ii) Amount") equal to (1) the
greater of (X) the Clause (i) Amount at December 28, 1995, and
(Y) negative $37,000,000, plus (2) 50% of Consolidated Net
----
Income for such Clause (ii) Test Period (or zero in the case
of a deficit), plus (3) the amount of any net gain realized by
----
the Borrower or any of its Subsidiaries on the exchange,
redemption, purchase or other acquisition of any of its debt
securities (including, without limitation, the 10.25% Notes)
during such Clause (ii) Test Period; where "Clause (ii) Test
Period" means, at any time, the period (taken as one
accounting period) commencing on December 29, 1995 and ending
on the then most recently ended fiscal quarter of the
Borrower;
(iii) During each "Clause (iii) Test Period" (as defined
below) occurring during the period commencing on December 27,
1996 and ending on December 25, 1997, to be less than an
amount (the "Clause (iii) Amount") equal to (1) the greater of
(X) the Clause (ii) Amount at December 26, 1996, and (Y)
negative $47,000,000, plus (2) 50% of Consolidated Net Income
----
for such Clause (iii) Test Period (or zero in the case of a
deficit), plus (3) the amount of any net gain realized by the
----
Borrower or any of its Subsidiaries on the exchange,
redemption, purchase or other acquisition of any of its debt
securities (including, without limitation, the 10.25% Notes)
during such Clause (iii) Test Period; where "Clause (iii) Test
Period" means, at any time, the period (taken as a one
accounting period) commencing on December 27, 1996 and ending
on the then most recently ended fiscal quarter of the
Borrower;
(iv) During each "Clause (iv) Test Period" (as
defined below) occurring during the period commencing on
December 26, 1997 and ending on December 31, 1998, to be less
than an amount (the "Clause (iv) Amount") equal to (1) the
greater of (X) the Clause (iii) Amount at December 25, 1997,
and (Y) negative $47,000,000, plus (2) 50% of Consolidated Net
----
Income for such Clause (iv) Test Period (or zero in the case
of a deficit), plus (3) the amount of any net gain realized by
----
the Borrower or any of its Subsidiaries on the exchange,
redemption, purchase or other acquisition of any of its debt
securities (including, without limitation, the 10.25% Notes)
during such Clause (iv) Test Period; where "Clause (iv) Test
Period" means, at any time, the period (taken as one
accounting period) commencing on December 26, 1997 and ending
on the then most recently ended fiscal quarter of the
Borrower; and
(v) During each "Clause (v) Test Period" (as defined
below) occurring after January 1, 1999 and thereafter, to be
less than an amount equal to (1) the greater of (X) the Clause
(iv) Amount at December 31, 1998, and (Y) negative
$47,000,000, plus (2) greater of (X) 50% of Consolidated Net
----
Income for such Clause (v) Test Period (or zero in the case of
a deficit), and (Y) $1,250,000 multiplied by the number of the
Borrower's fiscal quarters that have ended during such clause
(v) Test Period, plus (3) the amount of any net gain realized
----
by the Borrower or any of its Subsidiaries on the exchange,
redemption, purchase or other acquisition of any of its debt
securities (including, without limitation, the 10.25% Notes)
during such Clause (v) Test Period; where "Clause (v) Test
Period" means, at any time, the period (taken as one
accounting period) commencing on January 1, 1999 and ending on
the then most recently ended fiscal quarter of the Borrower.
(b) Fixed Charge Coverage Ratio. The Borrower covenants
---------------------------
that it will not cause or permit the ratio of (i) Consolidated Cash
Flow for the twelve month period ending at the end of any fiscal
quarter of the Borrower to (ii) Consolidated Fixed Charges for each
such twelve month period to be less than the ratio set forth below
for the period set forth below in which such fiscal quarter ends:
Ratio Period
----- ----------------------------
1.45:1 Original Closing Date through
December 28, 1995
1.50:1 December 29, 1995 through
December 31, 1998
1.55:1 January 1, 1999 and thereafter
provided, however, for purposes of determining Consolidated Cash
-------- -------
Flow for the calculation of the Fixed Charge Coverage Ratio only
and notwithstanding any tax effect of such restructuring charges,
restructuring charges in amounts not to exceed $3,500,000 and
$1,500,000 shall be added back, each on a one-time basis, prior to
December 25, 1997 and June 25, 1998, respectively, to the
calculation of the Consolidated Net Income to the extent deducted
therefrom.
8.2 Limitation on Restricted Payments and Restricted
------------------------------------------------
Investments.
-----------
(a) The Borrower covenants that it shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other distribution or
payment on or in respect of Capital Stock of the Borrower or its
Subsidiaries or make any payment to the direct or indirect holders
(in their capacities as such) of Capital Stock of the Borrower or
its Subsidiaries, other than dividends, distributions or payments
payable or made solely in shares of Capital Stock in the Borrower
of the same class held by such holders (other than Redeemable
Stock) or in options, warrants or other rights to purchase such
shares; (ii) purchase, redeem, defease or otherwise acquire or
retire for value any Capital Stock of the Borrower or any
Subsidiary; (iii) make any principal payment on, or
purchase, redeem, repurchase, defease (including, but not limited
to, in-substance or legal defeasance) or otherwise acquire or
retire for value, prior to any stated or scheduled maturity,
scheduled repayment or scheduled sinking fund or mandatory
redemption payment, any Restricted Debt (the foregoing actions, set
forth in clauses (i) through (iii) being referred to as "Restricted
Payments"); or (iv) make any Investment (the foregoing action being
referred to as a "Restricted Investment"); unless at the time of,
and immediately after giving effect to (determined on a pro forma
--- -----
basis), such proposed Restricted Payment or proposed Restricted
Investment:
(1) no Default or Event of Default exists or would
exist; and
(2) (i) the aggregate amount expended for all
Restricted Payments subsequent to March 30, 1995, plus (ii) the
----
aggregate amount expended for all Restricted Investments made
subsequent to March 30, 1995, does not exceed the sum of:
(A) 50% (or minus 100% in the event of a deficit)
-----
of Consolidated Net Income calculated on a cumulative basis
for the period commencing on March 31, 1995 and continuing
through the last day of the Borrower's fiscal quarter
immediately preceding the Borrower's fiscal quarter in which
the Restricted Payment or Restricted Investment, as the case
may be, is proposed to be made; plus
----
(B) the aggregate net cash proceeds received by the
Borrower (i) from the issuance and sale (other than to a
Subsidiary of the Borrower), after the Original Closing Date,
of Capital Stock in the Borrower (other than Redeemable
Stock), (ii) upon conversion after the Original Closing Date
of any Debt of the Borrower that is, by its terms, convertible
into Capital Stock (other than Redeemable Stock) in the
Borrower (with the aggregate net cash proceeds being deemed to
be the principal amount of the Debt so converted), or (iii)
from the exercise for cash after the Original Closing Date of
any options, warrants or other rights to acquire Capital Stock
(other than Redeemable Stock) in the Borrower; plus
----
(C) $10,000,000;
provided, however, that in no event may Restricted Payments made
-------- -------
subsequent to March 30, 1995 exceed the sum of the amounts
described in clause (A) and (B) above plus $5,000,000.
(b) Notwithstanding clause (a) above, the provisions of
this Section shall not prohibit:
(i) (A) the payment by any Subsidiary of the Borrower
of dividends or other distributions to the Borrower or a
Wholly Owned Subsidiary of the Borrower or the redemption or
repurchase by any such Subsidiary of any Capital Stock in such
Subsidiary owned by the Borrower or a Wholly Owned Subsidiary
of the Borrower, or (B) the payment of pro rata dividends to
holders of minority interests in the Capital Stock in a
Subsidiary of the Borrower; provided, however, that, in the
-------- -------
case of clause (B) no Default or Event or Default has occurred
and is continuing or would occur as a result thereof;
(ii) (A) consummation of the 10.25% Notes Exchange, so
long as no Default or Event of Default has occurred and is
continuing or would occur as a result thereof; (B)
consummation of the exchange of Series B Securities for Series
A Securities, and Series D Securities for Series C Securities,
as contemplated by the Registration Rights Agreement; and (C)
consummation of an exchange of Subsequent Second Priority
Notes solely for Second Priority Notes;
(iii) Investments in the amounts existing on the date
hereof and specifically described on Schedule C, 8.2 attached
hereto;
(iv) Investments (subject to Section 7.10) by the
Borrower in Wholly Owned Subsidiaries of the Borrower having
lines of business that are substantially similar or materially
related to the Borrower's lines of business existing on the
Original Closing Date, so long as no Default or Event of
Default has occurred and is continuing or would occur as a
result thereof; and
(v) Investments in Cash Equivalents;
(vi) the acquisition, redemption or retirement of Capital
Stock of the Borrower solely in exchange for (A) Capital Stock
of the Borrower of the same class as the Capital Stock that is
being acquired, redeemed or retired or (B) Common Stock of the
Borrower; and
(vii) the acquisition, redemption or retirement of Debt of
the Borrower or its Subsidiaries (A) which is subordinated in
right of payment to the Obligations solely in exchange for
Common Stock of the Borrower, or (B) as part of a refinancing
thereof permitted by Section 8.3(a)(xi).
(c) Notwithstanding clause (b) above, the payments
described in clause (b)(i)(B) above shall be included in any
calculation of the sum of the amount of Restricted Payments.
8.3 Limitation on Indebtedness.
--------------------------
(a) The Borrower covenants that it shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly
permit to exist, create, incur, issue, assume, guaranty or
otherwise become liable with respect to, extend the maturity of or
become responsible for the payment of, any Debt (including, without
limitation, any Acquired Debt) other than:
(i) Debt of the Borrower evidenced by the First
Priority Notes;
(ii) Debt of the Borrower evidenced by the 10.25% Notes;
(iii) Debt of the Borrower evidenced by the Second
Priority Notes and the Subsequent Second Priority Notes;
provided, however, that (1) the aggregate principal amount of
the Second Priority Notes and the Subsequent Second Priority
Notes do not at any time exceed $50,000,000, (2) such Second
Priority Notes and Subsequent Second Priority Notes have terms
substantially identical to the 10.25% Notes and in any event
no less favorable to the Borrower than those set forth in the
10.25% Notes and the 10.25% Notes Indenture (provided,
however, that the Second Priority Notes and Subsequent Second
Priority Notes may be secured by Liens that are Permitted
Liens described in clause (xi) of the definition of Permitted
Liens and the final maturity thereof may be prior to the final
maturity of the 10.25% Notes, subject to clause (3) below),
(3) the final maturity of such Second Priority Notes and
Subsequent Second Priority Notes is not prior to June 15,
2000, and (4) without limiting the foregoing clause (3), such
Second Priority Notes and Subsequent Second Priority Notes
shall not have any scheduled principal installment or other
principal payments due until after the final maturity of the
First Priority Notes;
(iv) the Obligations of the Borrower under this
Credit Agreement;
(v) Debt of the Borrower and certain Subsidiaries of the
Borrower under the GECC Lease Documents (including any
refinancings thereof) in an aggregate principal amount not to
exceed the principal amount thereof outstanding as of the
Original Closing Date less any scheduled amortization after
----
the Original Closing Date of such Debt when actually paid by
the Borrower or its Subsidiaries; provided, however, that no
-------- -------
refinancing of such Debt under the GECC Lease Documents shall
be permitted unless: (1) such refinancing Debt shall have an
Average Life at the time such refinancing is incurred that is
equal to or greater than the Average Life of the Debt to be
refinanced; and (2) such refinancing Debt shall be in a
principal amount not in excess of the principal amount of the
Debt to be refinanced (including the amount (if any), up to
$10,000,000, by which the Stipulated Loss Value exceeds the
then outstanding principal amount of the Debt to be
refinanced);
(vi) Debt evidenced by guaranties made by the Borrower's
Subsidiaries of the Debt described in clauses (i), (iii), (iv)
and (v) of this Section 8.3;
(vii) Debt of the Borrower or any of its Subsidiaries
under Currency Agreements and Interest Rate Agreements;
provided, that such Currency Agreements and Interest Rate
--------
Agreements do not increase the outstanding Debt of the
Borrower other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(viii) Debt of a Wholly Owned Subsidiary of the
Borrower to the Borrower or another Wholly Owned Subsidiary of
the Borrower;
(ix) Debt of any Subsidiary of the Borrower existing
on the Original Closing Date and described on Schedule C, Part
8.3 hereto;
(x) other Debt of any Subsidiary of the Borrower that
directly refinances any Debt of such Subsidiary described in
the immediately foregoing clause (ix); provided, however, that
-------- -------
(1) the principal amount of such refinancing Debt does not
exceed the principal amount of the Debt to be refinanced, (2)
the terms of such refinancing Debt are, in all material
respects, no less favorable to such Subsidiary than the terms
of the Debt to be refinanced, and (3) without limiting the
foregoing clause (2) no refinancing Debt may be secured to any
greater extent than is the Debt to be refinanced; provided,
--------
further, that notwithstanding clause (1) above, the aggregate
-------
principal amount of Debt refinancing existing lines of credit
of the Borrower's Subsidiaries may equal up to $10,000,000 (or
the applicable foreign currency equivalent thereof (reasonably
determined by the Borrower at the time any such refinancing
Debt is incurred);
(xi) Debt of the Borrower or any of its Subsidiaries
(A) resulting from the endorsement of negotiable instruments
for collection in the ordinary course of business, or (B)
arising under guarantees incurred in the ordinary course of
business (and not in connection with the borrowing of money)
with respect to suppliers, licensees, franchisees or customers
of the Borrower or such Subsidiary;
(xii) other Debt of the Borrower and its Subsidiaries
(including, without limitations, Purchase Money Indebtedness
and Acquired Debt); provided, however, that the aggregate
-------- -------
outstanding principal amount thereof shall at no time exceed
$15,000,000 (or the applicable foreign currency equivalent
thereof reasonably determined by the Borrower at the time such
Debt is incurred); provided, further, that the aggregate
-------- -------
outstanding amount of Purchase Money Indebtedness to be
incurred in connection with the purchase of any Property shall
not exceed 90% of the cash purchase price to be paid for such
Property; and
(xiii) other Debt of the Borrower (not secured by any
Lien);
provided, however, that at no time shall (1) Consolidated Senior
-------- -------
Debt be more than 52.5% of Consolidated Total Capitalization, or
(2) Consolidated Debt be more than 88% of Consolidated Total
Capitalization.
(b) For purposes of determining any particular amount of
Debt under this Section, Guarantees of (or obligations with respect
to letters of credit supporting) Debt otherwise included in the
determination of such amount shall not also be included.
8.4 Limitation on Liens. The Borrower covenants that it
-------------------
shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur or permit to exist any Lien
of any nature whatsoever on any of its Property (including, without
limitation, Capital Stock), whether owned on the Original Closing
Date or thereafter acquired, other than Permitted Liens.
8.5 Limitation on Borrower Transfers, Mergers and
---------------------------------------------
Consolidations. The Borrower covenants that it shall not (a)
--------------
directly or indirectly Transfer all or substantially all of its
Property in a single transaction or series of transactions, or (b)
merge or consolidate with any other Person unless, in the case of
a merger or consolidation:
(i) at the time of, and immediately after giving
effect to (determined on a pro forma basis), such proposed
--- -----
merger or consolidation, no Default or Event of Default exists
or would exist after giving effect thereto (including, without
limitation, any Event of Default resulting from a Change of
Control); and
(ii) the Borrower has delivered to the Agent a certificate
of its chief executive or chief financial officer and a legal
opinion acceptable to the Agent and Lenders, each stating that
such consolidation or merger complies with this Section 8.5
and that all conditions precedent herein provided for with
respect thereto have been completely satisfied.
8.6 Limitation on Certain Asset Sales and Subsidiary
------------------------------------------------
Mergers. Without limiting Section 8.5 above, the Borrower
-------
covenants that (i) it shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, Transfer any of its
Property, and (ii) the Borrower shall not permit any of its
Subsidiaries to merge or consolidate with any Person, except:
(a) any Wholly-Owned Subsidiary of the Borrower may merge
with, or sell all or substantially all of its Property to, the
Borrower or another Wholly-Owned Subsidiary of the Borrower if at
the time of and immediately after giving effect to (determined on
a pro forma basis) such proposed transaction no Default or Event of
Default exists or would exist after giving effect thereto;
(b) the Borrower may Transfer assets to the extent
permitted under Section 8.5 and may issue and sell its Capital
Stock subject to Section 9.1(f);
(c) the Borrower or any such Subsidiary may sell inventory
in the ordinary course of business and equipment that is determined
to be obsolete in accordance with GAAP or concurrently replaced by
equipment (not subject to any Lien other than Permitted Liens) of
the same type having a fair market value at least equal to the fair
market value of the equipment so replaced;
(d) the Borrower or any such Subsidiary (subject to clause
(f) below) may otherwise Transfer Property (excluding Capital Stock
of Material Subsidiaries), and any such Subsidiary (subject to
clause (f) below) may consummate a Transfer by Merger; provided
--------
that after giving effect thereto (1) the Percentage of Total Assets
Transferred in any fiscal year of the Borrower (excluding assets
described in clauses (a) and (c) above) shall not exceed 10%; and
(2) the Percentage of Total Assets Transferred (excluding assets
described in clauses (a) and (c) above) at any time after the
Original Closing Date on a cumulative basis shall not exceed 15%;
and
(e) the Borrower or any Subsidiary of the Borrower
(subject to clause (f) below) may Transfer other Property (not
constituting Capital Stock of any Material Subsidiary), and any
Subsidiary of the Borrower (subject to clause (f) below) may
consummate other Transfers by Merger if:
(i) at the time of and immediately after giving
effect to (determined on a pro forma basis) such proposed
--- -----
Transfer of Property or Transfer by Merger (as the case may
be) no Default or Event of Default exists or would exist;
(ii) the consideration to be paid to the Borrower or
such Subsidiary (as the case may be) is at least equal to the
fair market value of the assets to be Transferred (or in the
case of a Transfer by Merger, the fair market value of the
Subsidiary subject thereto), in each case as reasonably
determined by the Board of Directors; and
(iii) the proceeds from such Transfer of Property or
Transfer by Merger (net of Z) (x) reasonable expenses incurred
by the Borrower or the Subsidiary (as the case may be)
incidental thereto, (y) the amount of any taxes (reasonably
determined by the Borrower in good faith) owing by the
Borrower or such Subsidiary (as the case may be) as a result
thereof, and (z) any mandatory repayment of permitted Debt (if
any) secured by a Permitted Lien on the Property being
Transferred that is prior to the Lien securing the
Consolidated Secured Debt) are immediately applied to redeem
or otherwise repay the Obligations and the other Consolidated
Secured Debt outstanding at such time, such application of
proceeds to be made pro rata to the holders of the
--- ----
Consolidated Secured Debt based on the then outstanding
principal amount or outstanding amount of unpaid reimbursement
obligations (with respect to draws on the Letters of Credit)
of each such holder's holding of Consolidated Secured Debt
(or, in the case of Prudential, the "Revolving Commitment," as
defined in the Collateral Agency Agreement) in proportion to
the aggregate amount of Consolidated Secured Debt then
outstanding (or, in the case of Prudential, the "Revolving
Commitment," as defined in the Collateral Agency Agreement);
provided, however, that such redemption or repayment pursuant
-------- -------
to this clause (3) shall be deferred until the amount of
proceeds to be so redeemed and otherwise repaid equals or
exceeds $5,000,000 with any such lesser amounts not used for
redemption or repayment to be aggregated with proceeds
subsequently received from Transfers to be utilized for
redemption or repayment at such point as such aggregate amount
equals or exceeds $5,000,000. The Borrower shall make each
redemption or other repayment required under Section
8.6(e)(iii) no later than the Business Day following the
Transfer of Property or Transfer by Merger giving rise
thereto.
(f) Notwithstanding anything to the contrary in this
Section 8.6, the Borrower shall not permit any Material Subsidiary,
directly or indirectly, to Transfer all or substantially all of its
assets in a single transaction or series of related transactions or
to merge or consolidate with any Person other than as permitted
under Section 8.6(a).
8.7 Limitation on Payment Restrictions Affecting
--------------------------------------------
Subsidiaries. The Borrower covenants that it shall not, and shall
------------
not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction which by its terms expressly
restricts the ability of any Subsidiary of the Borrower to: (a) pay
dividends or make any other distributions on the Capital Stock in
such Subsidiary or any other interest or participation in, or
measured by, its profits owned by, or pay any Debt owed to, the
Borrower or any such Subsidiary, (b) make any loans or advances to
the Borrower or any such Subsidiary or (c) transfer any of its
Property to the Borrower or to any such Subsidiary, except for (i)
such encumbrances or restrictions existing under or by reason of
any encumbrance or restriction existing by reason of applicable
law; (ii) such encumbrances or restrictions existing on the
Original Closing Date and described in reasonable detail on
Schedule C, Part 8.4 hereto, including, without limitation, any
encumbrances or restrictions under Debt of the Borrower or any of
its Subsidiaries listed on Schedule C, Part 8.3; (iii) such
encumbrances or restrictions as may exist under refinancing Debt
permitted under Section 8.3(a)(xi); provided, however, that any
-------- -------
such encumbrances or restrictions are, in no material respect, any
more onerous to the Borrower or such Subsidiary than the
encumbrances or restrictions included in the Debt to be refinanced;
(iv) such encumbrances or restrictions as may exist under any
Acquired Debt at the time incurred by the Borrower or such
Subsidiary; provided, however, that such encumbrances or
-------- -------
restrictions are, in no material respect, any more onerous to the
Borrower or such Subsidiary as the then existing most onerous such
encumbrances and restrictions applicable to the Borrower or such
Subsidiary; (v) the provisions of any lease governing a leasehold
interest or of any supply, license or other agreement entered into
in the ordinary course of business of the Borrower or such
Subsidiary that restrict in a customary manner transfer, subleasing
or assignment; and (vi) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement entered into for the
sale or disposition of Capital Stock or assets of such Subsidiary
pending the closing of such sale or disposition.
8.8 Transactions with Affiliates.
----------------------------
(a) The Borrower covenants that it shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, enter
into or permit to exist any transaction or series of related
transactions (including, without limitation, any purchase, sale or
exchange of Property, the making of any Investment, the giving of
any guarantee or the rendering of any service), with any Affiliate
of the Borrower or of any Subsidiary of the Borrower unless the
terms of such transaction or series of related transactions are no
less favorable to the Borrower or such Subsidiary, as the case may
be, than those that might be obtained at the time of such
transaction from a Person who is not such an Affiliate; provided,
--------
however, that in addition to the foregoing, any such transaction
-------
(or series of related transactions), other than Exempted
Transactions, that has a fair market value to the Borrower or such
Subsidiary of $10,000,000 or more shall be deemed to be on terms no
less favorable to the Borrower or such Subsidiary than those
obtainable at the time of the transaction from a Person who is not
such an Affiliate only if the Board of Directors of the Borrower
receives and delivers to the Agent, prior to such transaction, a
written opinion of a nationally recognized investment banking firm
stating that the transaction is fair to the Borrower or such
Subsidiary from a financial point of view.
(b) The provisions set forth in clause (a) above shall not
apply to (i) the payment of fees, salaries or other amounts to DPK
in accordance with the express terms of the Management Agreement;
provided, however, that the aggregate amount of all such fees,
-------- -------
salaries and other amounts shall not exceed $5,000,000 (determined
without regard to the value of options to purchase the Borrower's
Common Stock) in the aggregate in any consecutive twelve month
period, (ii) any transaction between the Borrower and any of its
Wholly Owned Subsidiaries, (iii) the payment of reasonable and
customary fees (including options to purchase the Borrower's Common
Stock) to directors of the Borrower or any of the Subsidiaries of
the Borrower who are not employees of the Borrower or any
Subsidiary of the Borrower as the same may be deemed advisable or
appropriate by the Board of Directors, or (iv) loans or advances to
officers, members of the Board of Directors and employees of the
Borrower or any of its Subsidiaries for travel, entertainment or
moving and other relocation expenses made in the ordinary course of
business of the Borrower and its Subsidiaries as the same may be
deemed advisable or appropriate by the Board of Directors.
8.9 Limitations on the Sale of Stock and Debt of
--------------------------------------------
Subsidiaries. The Borrower covenants that it shall not, and shall
------------
not permit any of its Subsidiaries to, sell or otherwise dispose
of, or part with control of, any Capital Stock (other than
directors' qualifying shares or nominee shares) or Indebtedness of
any Subsidiary of the Borrower, except to the Borrower or a Wholly
Owned Subsidiary of the Borrower, and except that all Capital Stock
and Indebtedness of any such Subsidiary may be sold as an entirety
provided that (a) at the time of such sale, such Subsidiary shall
not own, directly or indirectly, any Capital Stock or Indebtedness
of any other Subsidiary (unless all of the Capital Stock and
Indebtedness of such other Subsidiary are simultaneously being
sold), and (b) such sale would be permitted by Section 8.5 and
Section 8.6; provided, further, that this Section 8.9 shall not be
-------- -------
deemed to prohibit the Borrower or any Subsidiary of the Borrower
from making any Investment (including, without limitation,
Investments in a Person such that after giving effect thereto such
Person may be less than a Wholly-Owned Subsidiary of the Borrower)
permitted by Section 8.2.
8.10 Sale and Lease-Back Transactions. The Borrower
--------------------------------
covenants that it shall not, and shall not permit any of its
Subsidiaries to, enter into any arrangement with any Person
providing for the leasing by the Borrower or such Subsidiary of
real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to
any Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of
the Borrower or such Subsidiary.
8.11 Sale or Discount of Receivables. The Borrower
-------------------------------
covenants that it shall not, and shall not permit any of its
Subsidiaries to, sell with recourse, or discount or otherwise sell
for less than the face value thereof, any of its notes or accounts
receivable.
8.12 Pension Plan Funding Deficiency. The Borrower
-------------------------------
covenants that it shall not, and shall not permit any member of the
Control Group to, on or after the Original Closing Date (a) incur
or permit to exist any accumulated funding deficiency within the
meaning of Section 302(a)(2) of ERISA or Section 412(a) of the
Internal Revenue Code, or (b) incur any liability (other than for
premiums due but not yet paid) to the Pension Benefit Guaranty
Corporation, in either case in connection with any Title IV Plan
which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
8.13 Limitation on Issuance and Sale of Capital Stock of
---------------------------------------------------
Subsidiaries. The Borrower covenants that it shall not (a) permit
------------
any Subsidiary of the Borrower to issue or sell any Capital Stock
in such Subsidiary other than to the Borrower or a Wholly Owned
Subsidiary of the Borrower or (b) permit any Person other than the
Borrower or a Wholly Owned Subsidiary of the Borrower to hold any
Capital Stock issued after the Original Closing Date in any
Subsidiary of the Borrower; provided, however, that the Borrower or
-------- -------
any Subsidiary of the Borrower may sell Common Stock to the extent
permitted under Section 8.6.
8.14 Limitation on Fiscal Year Changes. The Borrower
---------------------------------
covenants that it shall not change its fiscal year end from the
last Thursday in each December of each year nor shall it make any
change to its corresponding fiscal quarter end; provided, however,
-------- -------
that the Borrower may make a one time change in its fiscal year end
to December 31 of each year (a "Fiscal Year Change") so long as (a)
its fiscal quarter end is concurrently changed to the last day of
each calendar quarter and (ii) the Borrower gives not less than 5
Business Days prior notice thereof to the Agent. Upon and after
the effectiveness of the Fiscal Year Change (if any) and as to all
periods after (but not before) such Fiscal Year Change: (a) the
references in Section 8.1(a) to "December 25," "December 26,"
"December 27," "December 28" and "December 29" shall automatically
be deemed to be a reference to "December 31;" and (b) the
references in Section 8.1(b) to "December 27," "December 28" and
"December 29" shall automatically be deemed to be a reference to
"December 31."
8.15 Limitation of Payments on First Priority Note and
-------------------------------------------------
Subsequent First Priority Notes. The Borrower covenants that it
-------------------------------
shall not, directly or indirectly, make any principal payment on or
purchase, redeem, repurchase, defease (including but limited to,
in-substance or legal defeasance) or otherwise acquired or retire
for value, prior to any stated or scheduled maturity, scheduled
repayment or scheduled sinking fund or mandatory redemption
payment, any First Priority Notes or Subsequent First Priority
Notes other than pursuant to Section 3.09 and 4.06(e)(3) of the
First Priority Notes Indenture (as in effect on the Original
Closing Date).
ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES.
------------------------------
9.1 Events of Default. The occurrence of any of the
-----------------
following events shall constitute an Event of Default hereunder:
(a) Failure to Pay Principal. The Borrower shall fail to
------------------------
make any principal payment when the same shall become payable
hereunder.
(b) Failure to Pay Other Obligations. The Borrower shall
--------------------------------
fail to pay any Obligation (other than principal payments) for more
than five (5) days after the same shall become payable hereunder.
(c) Breach of Certain Covenants. The Borrower shall fail
----------------------------
to comply with any covenant contained in Article 8 hereof.
(d) Breach of Representation or Warranty. Any
------------------------------------
representation or warranty made by any Credit Party or by any
Responsible Officer thereof in this Credit Agreement or in any
other Credit Document (and in any statement or certificate given
under this Credit Agreement or any other Credit Document), shall be
false or misleading in any material respect when made or deemed to
be made.
(e) Breach of Other Covenants. Any Credit Party shall
-------------------------
fail to comply with any covenant, condition or agreement contained
in this Credit Agreement or any other Credit Document, other than
as set forth in Sections 9.1(a), (b) or (c), and such failure shall
continue for thirty (30) days after any Responsible Officer of the
Borrower learns thereof.
(f) Change of Control. A Change of Control shall occur.
-----------------
(g) Cross Default. The Borrower or any Subsidiary of the
-------------
Borrower defaults (whether as primary obligor or as guarantor or
other surety) in any payment of principal of or interest on the
10.25% Notes, the First Priority Notes, the Subsequent First
Priority Notes (if any), the Second Priority Notes (if any), the
Subsequent Second Priority Notes (if any), any loan under the
Prudential Revolving Credit Agreement, any Capital Lease Obligation
under the GECC Lease Documents or any other obligation for money
borrowed (or any Capital Lease Obligation, any obligation under a
conditional sale or other title retention agreement, any obligation
issued or assumed as full or partial payment for property whether
or not secured by a purchase money mortgage or any obligation under
notes payable or drafts accepted representing extensions of credit
or any obligation to pay or reimburse any Person for any amount
paid under any letter of credit, any proposal, bid, performance or
other bond, or under any indemnity agreement) beyond any period of
grace provided with respect thereto, or the Borrower or any such
Subsidiary fails to perform or observe any other agreement, term or
condition contained in any agreement under which any such
obligation is created (or if any other event thereunder or under
any such agreement shall occur and be continuing) and the effect of
such failure or other event is to cause, or to permit the holder or
holders of such obligation (or a trustee on behalf of such holder
or holders) to cause, such obligation to become due (or to be
repurchased by the Borrower or any such Subsidiary) prior to any
stated maturity, provided that, except in respect of the 10.25%
Notes, the First Priority Notes, the Subsequent First Priority
Notes (if any), the Second Priority Notes (if any), the Subsequent
Second Priority Notes (if any), the loans under the Prudential
Revolving Credit Agreement and the Capital Lease Obligation under
the GECC Lease Documents, the aggregate amount of all obligations
as to which such a payment default shall occur and be continuing or
such a failure or other event causing or permitting acceleration
(or resale to the Borrower or any Subsidiary) shall occur and be
continuing exceeds $5,000,000.
(h) Insolvency Event. The Borrower or any Material
----------------
Subsidiary shall become the subject of an Insolvency Event.
(i) Judgments. One or more judgments or orders in an
---------
aggregate amount in excess of $5,000,000 (net of cash proceeds
actually received by, or paid on behalf of, the Borrower or any
Material Subsidiary of the Borrower with respect to such judgments
or orders) are rendered against the Borrower or any Material
Subsidiary of the Borrower and, within 60 days after entry thereof,
such judgment is not discharged or execution thereof stayed pending
appeal, or within 60 days after the expiration of any such stay,
such judgment is not discharged.
(k) Defaults Under Other Credit Documents. The occurrence
-------------------------------------
of any "Event of Default" (as defined in any other Credit Document)
or the breach of any covenant, warranty or agreement set forth in
any other Credit Document, which Event of Default or breach
continues beyond any period of grace therein provided.
(l) Unenforceability of Guaranty. The Guaranty Agreement
----------------------------
shall fail to remain in full force or effect or any action shall be
taken to discontinue or to assert the invalidity or
unenforceability of the Guaranty Agreement, or any guarantor
thereunder shall fail to comply with any of the terms or provisions
of the Guaranty Agreement or denies that it has any further
liability under the Guaranty Agreement, or gives notice to such
effect.
(m) Collateral. The Collateral Agent shall cease to
----------
possess at any time a valid, first priority (subject to Permitted
Liens) perfected Lien in and on any of the Collateral (other than
Collateral having a de minimis value).
-- -------
(n) Termination Event. Any Termination Event occurs.
-----------------
9.2 Acceleration, Termination of Commitments and Cash
-------------------------------------------------
Collateralization. Upon the occurrence and during the continuance
-----------------
of any Event of Default, without prejudice to the rights of the
Agent or any Lender to enforce its claims against the Borrower:
(a) Acceleration. Upon the written request of the
------------
Majority Lenders, and by delivery of written notice to the Borrower
from the Agent, all Obligations shall be immediately due and
payable (except with respect to any Event of Default set forth in
Section 9.1(h) hereof, in which case all Obligations shall
automatically become immediately due and payable without the
necessity of any request of the Majority Lenders or notice or other
demand to the Borrower) without presentment, demand, protest or any
other action or obligation of the Agent or any Lender.
(b) Termination of Commitments. Upon the written request
--------------------------
of the Majority Lenders, and by delivery of written notice to the
Borrower from the Agent, the Commitments shall be immediately
terminated and, at all times thereafter, all Revolving Loans made
by any Lender pursuant to this Credit Agreement shall be at such
Lender's sole discretion, unless such Event of Default is waived in
accordance with Section 11.11, in which case the Commitments shall
be automatically reinstated.
(c) Cash Collateralization. On demand of the Agent or the
----------------------
Majority Lenders, and subject to the terms of the Collateral Agency
Agreement, the Borrower shall immediately deposit in the Cash
Collateral Account maintained by the Collateral Agent, for each
Letter of Credit then outstanding, cash or Cash Equivalents in an
amount equal to 110% of the greatest amount drawable thereunder.
Such deposit shall be held by the Collateral Agent and disbursed to
the Agent in accordance with the terms of the Collateral Agency
Agreement to reimburse the Issuing Bank for the amount of each
drawing made under such Letters of Credit, as and when each such
drawing is made.
9.3 Rescission of Acceleration. After acceleration of the
--------------------------
maturity of the Obligations, if the Borrower pays all accrued
interest and all principal due (other than by reason of the
acceleration) and all Defaults and Events of Default are otherwise
remedied or waived in accordance with Section 11.11, the Majority
Lenders may elect in their sole discretion, to rescind the
acceleration and direct the Collateral Agent to return any cash
collateral deposited with the Collateral Agent pursuant to Section
9.2(c). (This Section is intended only to bind all of the Lenders
to a decision of the Majority Lenders and not to confer any right
on the Borrower, even if the described conditions for the Majority
Lenders' election may be met.)
9.4 Remedies. Upon the occurrence and during the
--------
continuance of an Event of Default, upon the written request and at
the direction of the Majority Lenders, the Agent may direct the
Collateral Agent, in accordance with the terms of the Collateral
Agency Agreement, to exercise any rights and remedies available to
the Collateral Agent under applicable law (including under the
Code) and under the Collateral Documents. The foregoing rights and
remedies are not intended to be exhaustive and the full or partial
exercise of any right or remedy shall not preclude the full or
partial exercise of any other right or remedy available under this
Credit Agreement, any other Credit Document, or the Collateral
Agency Agreement, at equity or at law.
9.5 Right of Setoff. In addition to and not in limitation
---------------
of all rights of offset that any Lender or the Issuing Bank may
have under applicable law, upon the occurrence of any Event of
Default, and whether or not any Lender or the Issuing Bank has made
any demand or the Obligations of any Credit Party have matured,
each Lender and the Issuing Bank shall have the right, subject to
the terms of the Collateral Agency Agreement, to appropriate and
apply to the payment of the Obligations of such Credit Party all
deposits and other obligations then or thereafter owing by such
Lender or the Issuing Bank to such Credit Party. Each Lender
exercising such rights shall notify the Agent thereof and any
amount received as a result of the exercise of such rights shall,
subject to the terms of the Collateral Agency Agreement, be shared
by the Lenders in accordance with Section 3.5.
9.6 Application of Proceeds; Surplus; Deficiencies. The
----------------------------------------------
net cash proceeds resulting from the Collateral Agent's exercise of
any of the foregoing rights against any Collateral that are
disbursed to the Agent pursuant to the terms of the Collateral
Agency Agreement (after deducting all of the Agent's Expenses
related thereto) shall be applied by the Agent to the payment of
the Obligations, whether due or to become due, in the order set
forth in Section 4.10. The Borrower shall remain liable to the
Agent and the Lenders for any deficiencies, and the Agent and the
Lenders in turn agree to remit to the Borrower or its successors or
assigns, any surplus resulting therefrom.
ARTICLE 10. THE AGENT.
---------
10.1 Appointment of Agent.
--------------------
(a) Each Lender and the Issuing Bank hereby designates
BTCC as its Agent and irrevocably authorizes the Agent to take
action on its behalf under the Credit Documents and the Collateral
Agency Agreement, to exercise the powers and perform the duties
described therein, and to exercise such other powers reasonably
incidental thereto. The Agent may perform any of its duties
through its agents or employees.
(b) Other than the Borrower's rights under Section 10.8,
this Article 10 is for the benefit of the Agent and the Lenders
only. The Agent shall act only for the Lenders and assumes no
obligation to or agency or trust relationship with any Credit
Party.
10.2 Nature of Duties of Agent. The Agent has no duties
-------------------------
or responsibilities except those expressly set forth in the Credit
Documents. Neither the Agent nor any of its officers, directors,
employees or agents shall be liable for any action taken or omitted
hereunder or in connection herewith. The duties of the Agent shall
be mechanical and administrative in nature. The Agent shall not
have a fiduciary relationship to any Lender or any participant of
any Lender.
10.3 Lack of Reliance on Agent. Independently and without
-------------------------
reliance upon the Agent, each Lender has made and shall continue to
make its own independent investigation and analysis of the content
and validity of the Credit Documents and the Collateral Agency
Agreement or of the performance and creditworthiness of the Credit
Parties thereunder. The Agent assumes no responsibility and
undertakes no obligation to make inquiry with respect to such
matters, unless specifically requested to do so in writing by a
Lender.
10.4 Certain Rights of the Agent. The Agent may request
---------------------------
instructions from the Majority Lenders at any time. If the Agent
requests instructions from the Majority Lenders with respect to any
action or inaction, the Agent shall be entitled to await
instructions from the Majority Lenders before such action or
inaction. No Lender shall have any right of action based upon the
Agent's action or inaction in response to instructions from the
Majority Lenders.
10.5 Reliance by Agent. The Agent may rely upon written
-----------------
or telephonic communication it believes to be genuine and to have
been signed, sent or made by the proper person. The Agent may
obtain the advice of legal counsel (including, for matters
concerning the Borrower, counsel for the Borrower), independent
public accountants and other experts selected by it and shall have
no liability for action or inaction in good faith based upon such
advice.
10.6 Indemnification of Agent. Each Lender agrees to
------------------------
reimburse and indemnify the Agent, to the extent of its
Proportionate Share, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever (including all
Expenses) which may be imposed on, incurred by or asserted against
the Agent in performing its duties hereunder or otherwise relating
to the Credit Documents and the Collateral Agency Agreement, unless
resulting from the Agent's gross negligence or willful misconduct.
10.7 BTCC in its Individual Capacity. In its individual
-------------------------------
capacity, BTCC shall have the same rights and powers hereunder as
any other Lender and may exercise them as though it was not
performing the duties specified herein as Agent. The terms
"Lenders," "Majority Lenders," or any similar terms shall, unless
the context clearly otherwise indicates, include BTCC in its
individual capacity. BTCC and its Affiliates may accept deposits
from, lend money to, acquire equity interests in, and generally
engage in any kind of banking, trust, financial advisory or other
business with the Borrower or any Affiliate of the Borrower as if
it were not performing the duties specified herein as Agent, and
may accept fees and other consideration from the Borrower for
services in connection with this Credit Agreement and otherwise
without having to account for the same to the Lenders.
10.8 Successor Agent.
----------------
(a) The Agent may, upon five Business Days' notice to the
Lenders and the Borrower, resign by giving written notice thereof
to the Lenders and the Borrower. The Agent's resignation shall be
effective upon the appointment of a successor Agent.
(b) Upon receipt of the Agent's resignation, the Majority
Lenders may appoint a successor Agent. Unless an Event of Default
shall have occurred and be continuing at the time of such
appointment, the successor Agent shall be subject to approval by
the Borrower, which approval shall not to be unreasonably withheld
and shall be delivered to the Majority Lenders within five Business
Days after the Borrower's receipt of notice of a proposed successor
Agent. If a successor Agent has not accepted its appointment
within fifteen Business Days, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent.
(c) Upon its acceptance of the agency hereunder, a
successor Agent shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and
obligations under this Credit Agreement. The retiring Agent shall
continue to have the benefit of this Article 10 for any action or
inaction while it was Agent.
10.9 Collateral Matters.
------------------
(a) Each Lender authorizes and directs the Agent to enter
into the Collateral Agency Agreement for the benefit of the
Lenders. Except as otherwise set forth herein, any action or
exercise of powers by the Majority Lenders under the Credit
Documents and the Collateral Agency Agreement, together with such
other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders. Prior to an Event
of Default, without notice to or consent from any Lender, the Agent
may direct the Collateral Agent, in accordance with the terms of
the Collateral Agency Agreement and subject to the limitations set
forth therein, to take any action necessary or advisable to perfect
and maintain the perfection of the Liens upon the Collateral.
(b) The Agent is authorized to direct the Collateral
Agent, in accordance with the terms of the Collateral Agency
Agreement and subject to the limitations set forth therein, to
release any Lien granted to or held by the Collateral Agent upon
any Collateral (i) upon termination of the Commitments and
indefeasible payment and satisfaction of all of the Obligations,
(ii) upon receipt of the proceeds of sales of the Collateral
permitted hereunder or (iii) if the release can be and is approved
by the Majority Lenders. The Agent may request and the Lenders
will provide confirmation of the Agent's authority to direct the
Collateral Agent, in accordance with the terms of the Collateral
Agency Agreement and subject to the limitations set forth therein,
to release particular types or items of Collateral.
(c) The Agent shall have no obligation to assure that the
Collateral exists or is owned by the Borrower or any of its
Subsidiaries, that such Collateral is cared for, protected or
insured, or that the Liens in the Collateral have been created,
perfected, or have any particular priority. With respect to the
Collateral, the Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Agent's own interest
in the Collateral as one of the Lenders, and it shall have no duty
or liability whatsoever to the Lenders, except for its gross
negligence or willful misconduct.
10.10 Actions with Respect to Defaults. In addition to the
--------------------------------
Agent's right to take actions on its own accord as permitted under
this Credit Agreement, the Agent shall take such action with
respect to a Default or Event of Default as shall be directed by
the Majority Lenders. Until the Agent shall have received such
directions, the Agent may act (or not act) as it deems advisable
and in the best interests of the Lenders.
10.11 Protection of Collateral. If the Borrower fails to (a)
------------------------
maintain in force and pay for any insurance policy or bond which
the Borrower is required to provide pursuant to any of the Credit
Documents, (b) keep the Collateral in good repair and operating
condition in accordance with the provisions of any of the Credit
Documents, (c) keep the Collateral free from any Liens other than
Permitted Liens, (d) pay when due all taxes, levies and assessments
except as otherwise provided pursuant to the terms of any of the
Credit Documents, (e) make all payments and perform all acts on the
part of the Borrower to be paid or performed with respect to any of
the Collateral, including, without limitation, all expenses of
protecting, storing, warehousing, insuring, handling and
maintaining the Collateral and (f) keep fully and perform promptly
any other of the obligations of the Borrower under the Credit
Documents, then the Agent or the Lenders, at its or their option,
may (but shall not be required to) procure and pay for such
insurance policy or bond, place such Collateral in good repair and
operating condition, pay, contest or settle such Liens or taxes or
any judgements based thereon or otherwise make good any other such
failure of the Borrower. The Borrower shall reimburse the Agent
and the Lenders promptly upon demand for all sums paid or advanced
on behalf of the Borrower for any such purpose, together with
reasonable and/or necessary cost and expenses (including reasonable
attorneys' fees) paid or incurred by the Agent in connection
therewith and interest on all sums advanced from the date of
advancement until repaid to the Agent at the rate specified in
Section 4.4. All such sums advanced by the Agent and the Lenders,
with interest thereon, immediately upon advancement thereon, shall
be deemed to be part of the Obligations.
ARTICLE 11. MISCELLANEOUS.
--------------
11.1 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND
-------------
ENFORCEMENT OF THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS
AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS CREDIT
AGREEMENT OR ANY OF THE CREDIT DOCUMENTS, WHETHER SOUNDING IN
CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND
DECISIONS OF THE STATE OF ILLINOIS.
11.2 SUBMISSION TO JURISDICTION. ALL DISPUTES AMONG THE
--------------------------
BORROWER AND THE LENDERS (OR THE AGENT ACTING ON THEIR BEHALF),
WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
RESOLVED ONLY BY STATE AND FEDERAL COURTS LOCATED IN CHICAGO,
ILLINOIS, AND THE COURTS TO WHICH AN APPEAL THEREFROM MAY BE TAKEN;
PROVIDED, HOWEVER, THAT THE AGENT, ON BEHALF OF THE LENDERS, SHALL
-------- -------
HAVE THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO
PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN ANY LOCATION
REASONABLY SELECTED BY THE AGENT IN GOOD FAITH TO ENABLE THE AGENT
TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF THE AGENT. THE BORROWER AGREES THAT IT
WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS, SETOFFS OR CROSS-
CLAIMS IN ANY PROCEEDING BROUGHT BY THE AGENT. THE BORROWER WAIVES
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH THE AGENT HAS COMMENCED A PROCEEDING, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON FORUM
NON CONVENIENS.
11.3 SERVICE OF PROCESS. THE BORROWER HEREBY IRREVOCABLY
------------------
AGREES THAT SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE AFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET
FORTH IN SECTION 11.7.
11.4 JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS
----------
EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY. INSTEAD, ANY
DISPUTES WILL BE RESOLVED IN A BENCH TRIAL.
11.5 LIMITATION OF LIABILITY. NEITHER THE AGENT NOR ANY
------------------------
LENDER SHALL HAVE ANY LIABILITY TO THE BORROWER (WHETHER SOUNDING
IN TORT, CONTRACT, OR OTHERWISE) FOR LOSSES SUFFERED BY THE
BORROWER IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED
TO THE TRANSACTIONS OR RELATIONSHIPS CONTEMPLATED BY THIS CREDIT
AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE
JUDGMENT OR COURT ORDER BINDING ON THE AGENT OR ANY SUCH LENDER,
THAT THE LOSSES WERE THE RESULT OF ACTS OR OMISSIONS CONSTITUTING
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
11.6 Delays. No delay or omission of the Agent or the
------
Lenders to exercise any right or remedy hereunder shall impair any
such right or operate as a waiver thereof.
11.7 Notices. Except as otherwise provided herein, all
-------
notices and correspondences hereunder shall be in writing and sent
by certified or registered mail, return receipt requested, or by
overnight delivery service, with all charges prepaid, if to the
Agent or any of the Lenders, then to BT Commercial Corporation, 000
Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Credit
Department, if to the Borrower, then to Envirodyne Industries,
Inc., 000 Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxx 00000,
Attention: General Counsel, or by facsimile transmission, promptly
confirmed in writing sent by first class mail, if to the Agent or
any of the Lenders, at (000) 000-0000, and if to the Borrower, at
(000) 000-0000. All such notices and correspondence shall be
deemed given (i) if sent by certified or registered mail, three
Business Days after being postmarked, (ii) if sent by overnight
delivery service, when received at the above stated addresses or
when delivery is refused and (iii) if sent by telex or facsimile
transmission, when receipt of such transmission is acknowledged.
11.8 Assignments and Participation.
-----------------------------
(a) Borrower Assignment. The Borrower shall not assign
-------------------
this Credit Agreement, or any rights or obligations hereunder,
without the prior written consent of the Agent and the Lenders.
(b) Lender Assignments. Each Lender may assign to one or
------------------
more banks or other financial institutions all or a portion of its
rights and obligations under this Credit Agreement, the Revolving
Notes and the other Credit Documents, with the consent of the Agent
and the consent of the Borrower (which shall not be unreasonably
withheld), and upon execution and delivery to the Agent, for its
acceptance and recording in the Register, of an agreement in
substantially the form of Exhibit L (an "Assignment and Assumption
Agreement"), together with surrender of any Revolving Note or
Revolving Notes subject to such assignment and a processing and
recordation fee of $2,500. No such assignment shall be for less
than $5,000,000 of the Commitments unless it is to another Lender.
(This Section does not apply to branches and Affiliates of a
Lender, it being understood that a Lender may make, carry or
transfer Revolving Loans at or for the account of any of its branch
offices or Affiliates without consent of the Borrower, the Agent or
any other Lender.)
(c) Agent's Register. The Agent shall maintain a register
----------------
of the names and addresses of the Lenders, their Commitments, and
the principal amount of their Revolving Loans (the "Register").
The Agent shall also maintain a copy of each Assignment and
Assumption Agreement delivered to and accepted by it and modify the
Register to give effect to each Assignment and Assumption
Agreement. Upon its receipt of each Assignment and Assumption
Agreement and surrender of the affected Revolving Note or Revolving
Notes, the Agent will give prompt notice thereof to the Borrower
and deliver to the Borrower a copy of the Assignment and Assumption
Agreement and the surrendered Revolving Note or Revolving Notes.
Within five Business Days after its receipt of such notice, the
Borrower shall execute and deliver to the Agent a new Revolving
Note or Revolving Notes to the order of the assignee in the amount
of the Commitment or Commitments assumed by it and to the assignor
in the amount of the Commitment or Commitments retained by it, if
any. Such new Revolving Note or Revolving Notes shall re-evidence
the Indebtedness outstanding under the surrendered Revolving Note
or Revolving Notes and shall be dated as of the Original Closing
Date. The Agent shall be entitled to rely upon the Register
exclusively for purposes of identifying the Lenders hereunder.
(d) Lender Participation. Each Lender may sell a
--------------------
participation (without the consent of the Agent, the Borrower or
any other Lender) to one or more parties in or to all or a portion
of its rights and obligations under this Credit Agreement, the
Revolving Notes and the other Credit Documents. Notwithstanding a
Lender's sale of a participation interest, its obligations
hereunder shall remain unchanged. The Borrower, the Agent and the
other Lenders shall continue to deal solely and directly with such
Lender. No participant shall have rights to approve any amendment
or waiver of any provision of this Credit Agreement or any of the
other Credit Documents.
11.9 Confidentiality. Each Lender agrees that it will use
---------------
its reasonable best efforts not to disclose without the prior
consent of the Borrower any information with respect to the
Borrower or any of its Subsidiaries which is furnished or otherwise
obtained by the Agent or any of the Lenders pursuant to this Credit
Agreement or any of the Collateral Documents and which is clearly
designated by the Borrower to the Lenders in writing as
confidential; provided, that any Lender may disclose any such
-------- ----
information (a) to its employees, auditors, or counsel, or to
another Lender if the disclosing Lender or such disclosing Lender's
holding or parent company in its sole discretion determines that
any such party should have access to such information, (b) as has
become generally available to the public, (c) as may be required or
appropriate in any report, statement or testimony submitted to any
Governmental Authority having or claiming to have jurisdiction over
such Lender, (d) as may be required or appropriate in response to
any summons or subpoena or in connection with any litigation, (e)
in order to comply with any Requirement of Law, and (f) to any
prospective or actual transferee or participant in connection with
any contemplated transfer or participation of any of the Revolving
Notes or Commitments or any interest therein by such Lender.
11.10 Indemnification. The Borrower hereby indemnifies and
---------------
agrees to defend and hold harmless the Agent, the Issuing Bank and
each of the Lenders and their respective directors, officers,
agents, employees and counsel from and against any and all losses,
claims, damages, liabilities, deficiencies, judgments or expenses
incurred by any of them (except to the extent that it is finally
judicially determined to have resulted from their own gross
negligence or willful misconduct) arising out of or by reason of
(a) any litigation, investigation, claim or proceeding which arises
out of or is in any way related to (i) this Credit Agreement or the
transactions contemplated hereby, (ii) the issuance of the Letters
of Credit, (iii) the failure of the Issuing Bank to honor a drawing
under any Letter of Credit, as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or
de facto government or Governmental Authority, (iv) any use of the
proceeds of the Revolving Loans or (v) the Agent's or the Lenders'
entering into this Credit Agreement, the other Credit Documents or
any other agreements and documents relating hereto, including,
without limitation, amounts paid in settlement, court costs and the
fees and disbursements of counsel incurred in connection with any
such litigation, investigation, claim or proceeding or any advice
rendered in connection with any of the foregoing and (b) any
remedial or other action taken by the Borrower or any of the
Lenders in connection with compliance by the Borrower or any of its
Subsidiaries, or any of their respective properties, with any
federal, state or local environmental laws, acts, rules,
regulations, orders, directions, ordinances, criteria or
guidelines.
11.11 Amendments and Waivers. No amendment or waiver of any
----------------------
provision of this Credit Agreement or any other Credit Document
shall be effective unless in writing and signed by the Majority
Lenders (or by the Agent on their behalf), except that:
(a) the consent of all the Lenders is required to (i)
increase the Commitments, (ii) reduce the principal of, or interest
on, the Revolving Notes, any Letter of Credit reimbursement
obligations or any Fees hereunder (other than Fees that are
exclusively for the account of the Agent or the Issuing Bank),
(iii) postpone any date fixed for any payment in respect of
principal of, or interest on, the Revolving Notes, any Letter of
Credit reimbursement obligations or any Fees hereunder, (iv) change
the percentage of the Commitments, or any minimum requirement
necessary for the Lenders or the Majority Lenders to take any
action hereunder, (v) amend or waive this Section 11.11(a), or
change the definition of Majority Lenders or (vi) except as
otherwise expressly provided in this Credit Agreement, and other
than in connection with the financing, refinancing, sale or other
disposition of any asset of the Borrower permitted under this
Credit Agreement, direct the Collateral Agent to release any Liens
in favor of the Lenders on any of the Collateral; and
(b) the consent of the Agent or the Issuing Bank, as the
case may be, shall be required for any amendment, waiver or consent
affecting the rights or duties of the Agent or the Issuing Bank
under any Credit Document, in addition to the consent of the
Lenders otherwise required by this section.
The consent of the Borrower shall not be required for any
amendment, modification or waiver of the provisions of Article 10
(other than Section 10.8). The Borrower and the Lenders hereby
authorize the Agent to modify this Credit Agreement by unilaterally
amending or supplementing Annex I to reflect assignments of the
Commitments.
11.12 Counterparts and Effectiveness. This Credit Agreement
------------------------------
and any waiver or amendment hereto may be executed in any number of
counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be
an original, but all of which shall together constitute one and the
same instrument. Any such counterpart which may be delivered by
facsimile transmission shall be deemed the equivalent of an
originally signed counterpart and shall be fully admissible in any
enforcement proceedings regarding this Agreement. This Credit
Agreement shall become effective on the date on which all of the
parties hereto shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Agent
pursuant to Section 11.7 or, in the case of the Lenders, shall have
given to the Agent written, telecopied or telex notice (actually
received) at such office that the same has been signed and mailed
to it.
11.13 Severability. In case any provision in or obligation
------------
under this Credit Agreement or the Revolving Notes or the other
Credit Documents shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
11.14 Maximum Rate. Notwithstanding anything to the contrary
------------
contained elsewhere in this Credit Agreement or in any other Credit
Document, the Borrower, the Agent and the Lenders hereby agree that
all agreements among them under this Credit Agreement and the other
Credit Documents, whether now existing or hereafter arising and
whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to
be paid, to the Agent or any Lender for the use, forbearance, or
detention of the money loaned to the Borrower and evidenced hereby
or thereby or for the performance or payment of any covenant or
obligation contained herein or therein, exceed the Highest Lawful
Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit
Documents at the time performance of such provision shall be due
shall exceed the Highest Lawful Rate, then, automatically, the
obligation to be fulfilled shall be modified or reduced to the
extent necessary to limit such interest to the Highest Lawful Rate,
and if from any such circumstance any Lender should ever receive
anything of value deemed interest by applicable law which would
exceed the Highest Lawful Rate, such excessive interest shall be
applied to the reduction of the principal amount then outstanding
hereunder or on account of any other then outstanding Obligations
and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and
such other then outstanding Obligations, such excess shall be
refunded to the Borrower. All sums paid or agreed to be paid to
the Agent or any Lender for the use, forbearance, or detention of
the Obligations and other Indebtedness of the Borrower to the Agent
or any Lender, to the extent permitted by applicable law, shall be
amortized, prorated, allocated and spread throughout the full term
of such Indebtedness, until payment in full thereof, so that the
actual rate of interest on account of all such Indebtedness does
not exceed the Highest Lawful Rate throughout the entire term of
such Indebtedness. The terms and provisions of this Section shall
control over every other provision of this Credit Agreement, the
other Credit Documents, and all agreements among the Borrower, the
Agent and the Lenders.
11.15 Entire Agreement; Successors and Assigns. This Credit
----------------------------------------
Agreement and the other Credit Documents constitute the entire
agreement among the Borrower, the Agent and the Lenders, supersedes
any prior agreements among them, and shall bind and benefit the
Borrower, the Agent and the Lenders and their respective successors
and permitted assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed in Chicago, Illinois, and delivered by
their proper and duly authorized officers as of the date set forth
above.
BORROWER:
ENVIRODYNE INDUSTRIES, INC.,
a Delaware corporation
By:
-------------------------
Title:
AGENT:
BT COMMERCIAL CORPORATION,
as Agent
By:
Senior Vice President
LENDERS:
BT COMMERCIAL CORPORATION
By:
Senior Vice President
ANNEX 1
TO
CREDIT AGREEMENT
DATED AS OF JUNE 1, 1998
List of Lenders; Commitment Amounts;
and Applicable Lending Offices
1. BT COMMERCIAL CORPORATION
000 Xxxxx Xxxxxx
Xxxxx 0000 - Xxxxx Xxxxx
Xxxxxxx, XX 00000
Commitment Amount: $30,000,000
------------------
Domestic Lending Office: BT COMMERCIAL CORPORATION
----------------------- 000 Xxxxx Xxxxxx
Xxxxx 0000 - Xxxxx Xxxxx
Xxxxxxx, XX 00000
LIBOR Lending Office: BT COMMERCIAL CORPORATION
-------------------- 000 Xxxxx Xxxxxx
Xxxxx 0000 - Sears Tower
Xxxxxxx, XX 00000
Xxxxxxx, Xxxxxxxx
June 1, 1998
COUNTERPART SIGNATURE PAGE
Reference is hereby made to (a) that certain Amended and
Restated Credit Agreement dated as of June 1, 1998 (the "Credit
Agreement"), among ENVIRODYNE INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), BT COMMERCIAL CORPORATION, a Delaware
corporation ("BTCC") together with certain other financial
institutions from time to time parties thereto as lenders
(collectively, "Lenders") and BTCC, acting in its capacity as agent
thereunder (in such capacity, the "Agent") for itself and the other
Lenders, pursuant to which, among other things, the Lenders have
refinanced on the date hereof all of the Secured Obligations
constituting "Revolving Loans" (as defined in the Collateral Agency
Agreement referred to below); and (b) that certain Intercreditor
and Collateral Agency Agreement dated as of June 20, 1998 (the
"Collateral Agency Agreement"), among Borrower, BTCC, Agent,
Prudential and the First Priority Notes Indenture Trustee.
Capitalized terms used but not otherwise defined herein shall have
the respective meanings ascribed thereto in the Collateral Agency
Agreement.
Pursuant to Section 17(b) of the Collateral Agency Agreement,
the Agent hereby acknowledges and agrees that attachment by Agent
of this executed counterpart signature page to the copy of the
Collateral Agency Agreement attached hereto, and subsequent
delivery thereof by Agent to the Collateral Agent, the Agent, for
and on behalf of the Lenders, hereby (i) becomes a signatory to the
Collateral Agency Agreement and (ii) from and after the date set
forth above, (x) acknowledges and agrees to be bound by the
respective terms and provisions thereof and (y) assumes, in its
capacity as a Refinancing Person, the obligations of the Revolving
Lender thereunder with respect to the Revolving Loans refinanced by
the Lenders under the Credit Agreement.
BT COMMERCIAL CORPORATION,
as Agent
By:
-----------------------
Senior Vice President
TABLE OF CONTENTS
Page
SECTION 1A AMENDMENT AND RESTATEMENT OF ORIGINAL
CREDIT AGREEMENT; NO NOVATION
SECTION 1B NATURE OF REVOLVING LOANS AND THIS AGREEMENT
ARTICLE 1. DEFINITIONS
1.1 General Definitions
1.2 Accounting Terms and Determinations
1.3 Other Terms; Headings
ARTICLE 2. LETTERS OF CREDIT
2.1 Issuance of Letters of Credit
2.2 Terms of Letters of Credit
2.3 Notice of Issuance
2.4 Lenders' Participation
2.5 Payments of Amounts Drawn Under Letters of
Credit
2.6 Payment by Lenders
2.7 Nature of Issuing Bank's Duties
2.8 Obligations Absolute
2.9 Agent's Execution of Applications and Other
Issuing Bank Documentation; Reliance on
Credit Agreement by Issuing Bank
2.10 Additional Payments
ARTICLE 3. REVOLVING LOANS 36
3.1 Revolving Credit Commitments
3.2 Borrowing of Revolving Loans
3.3 Notice of Request for Lender Advances.
3.4 Periodic Settlement of Agent Advances;
Interest and Fees; Statements.
3.5 Sharing of Payments
3.6 Defaulting Lenders
ARTICLE 4. COMPENSATION, REPAYMENT AND
REDUCTION OF COMMITMENTS
4.1 Interest on Revolving Loans
4.2 Unused Line Fees.
4.3 Letter of Credit Fees
4.4 Interest After Event of Default
4.5 Expenses
4.6 Mandatory Payment; Reduction of
Commitments
4.7 Maintenance of Loan Account; Statements of
Account
4.8 Payment Procedures
4.9 Collection of Accounts
4.10 Distribution and Application of Collections
and other Amounts
4.11 Calculations
4.12 Special Provisions Relating to LIBOR Rate
Loans
ARTICLE 5. CONDITIONS PRECEDENT
5.1 Conditions Precedent to Initial Letter of
Credit
5.2 Conditions Precedent to all Letters of
Credit
ARTICLE 6. REPRESENTATIONS AND WARRANTIES
6.1 Organization
6.2 Power and Authority; Enforceability
6.3 Financial Statements
6.4 Actions Pending
6.5 Outstanding Debt
6.6 Title to Properties
6.7 Taxes
6.8 Conflicting Agreements and Other Matters
6.9 Use of Proceeds
6.10 ERISA
6.11 Governmental Consent and Other Third Party
Consents
6.12 Environmental Compliance
6.13 Disclosure
6.14 Regulatory Status
6.15 Permits and Other Operating Rights
6.16 Absence of Other Liens
6.17 Security Interest
6.18 Locations of Collateral
ARTICLE 7. AFFIRMATIVE COVENANTS
7.1 Financial Reporting
7.2 Collateral Reporting
7.3 Notification Requirements
7.4 Corporate Existence; Conduct of Business
7.5 Books and Records; Inspections
7.6 Insurance
7.7 Taxes
7.8 Compliance with Laws
7.9 Maintenance of Property
7.10 Guaranties
7.11 Further Assurances
ARTICLE 8. NEGATIVE COVENANTS
8.1 Certain Financial Covenants
8.2 Limitation on Restricted Payments and
Restricted Investments
8.3 Limitation on Indebtedness
8.4 Limitation on Liens
8.5 Limitation on Borrower Transfers, Mergers
and Consolidations
8.6 Limitation on Certain Asset Sales and
Subsidiary Mergers
8.7 Limitation on Payment Restrictions
Affecting Subsidiaries
8.8 Transactions with Affiliates
8.9 Limitations on the Sale of Stock and Debt
of Subsidiaries
8.10 Sale and Lease-Back Transactions
8.11 Sale or Discount of Receivables
8.12 Pension Plan Funding Deficiency
8.13 Limitation on Issuance and Sale of Capital
Stock of Subsidiaries
8.14 Limitation on Fiscal Year Changes
ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES
9.1 Events of Default
9.2 Acceleration, Termination of Commitments
and Cash Collateralization
9.3 Rescission of Acceleration
9.4 Remedies
9.5 Right of Setoff
9.6 Application of Proceeds; Surplus;
Deficiencies
ARTICLE 10. THE AGENT
10.1 Appointment of Agent
10.2 Nature of Duties of Agent
10.3 Lack of Reliance on Agent
10.4 Certain Rights of the Agent
10.5 Reliance by Agent
10.6 Indemnification of Agent
10.7 BTCC in its Individual Capacity
10.8 Successor Agent
10.9 Collateral Matters
10.10 Actions with Respect to Defaults
10.11 Protection of Collateral
ARTICLE 11. MISCELLANEOUS
11.1 GOVERNING LAW
11.2 SUBMISSION TO JURISDICTION
11.3 SERVICE OF PROCESS
11.4 JURY TRIAL
11.5 LIMITATION OF LIABILITY
11.6 Delays
11.7 Notices
11.8 Assignments and Participation
11.9 Confidentiality
11.10 Indemnification
11.11 Amendments and Waivers
11.12 Counterparts and Effectiveness
11.13 Severability
11.14 Maximum Rate
11.15 Entire Agreement; Successors and Assigns
ANNEXES
Annex I - List of Lenders and Commitment Amounts
EXHIBITS
Exhibit A - Form of Borrowing Base Certificate
Exhibit B - Form of Collateral Access Agreement
Exhibit C - Form of Guaranty Agreement
Exhibit D - Form of Intellectual Property Security
Agreement
Exhibit E-1 - Form of Mortgage
Exhibit E-2 - Form of Deed
Exhibit E-3 - Form of Leasehold Mortgage
Exhibit F - Form of Pledge Agreement
Exhibit G - Form of Revolving Note
Exhibit H-1 - Form of Company Security Agreement
Exhibit H-2 - Form of Subsidiary Security Agreement
Exhibit I - Form of Letter of Credit Request
Exhibit J - Form of Auditors' Privity Letter
Exhibit K - Form of Compliance Certificate
Exhibit L - Form of Assignment and Assumption
Agreement
SCHEDULES
Schedule A - Closing Document List
Schedule B - Permitted Account Concentrations
Schedule C, Part 6.1 - Ownership of Subsidiaries
Schedule C, Part 8.2 - Permitted Investments
Schedule C, Part 8.3 - Permitted Debt
Schedule C, Part 8.4 - Permitted Liens
Schedule C, Part 8.7 - Permitted Payment Restrictions
